BlackPearl Resources Inc. - Reserves/Resources

Overview Core Properties

Reserves/Resources

The following tables summarize certain information contained in the independent reserves report prepared by Sproule Associates Unconventional Limited ("Sproule") as of December 31, 2010. The report was prepared in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Additional reserve information as required under NI 51-101 will be included in the Company's Annual Information Form which will be filed on SEDAR by March 31.

Summary of Oil and Gas Reserves -- Forecasted Prices and Costs

(Company interest, before royalties)	Oil&NGL Reserves	Natural Gas Reserves	2010 BOE ⁽¹⁾	2009 BOE ⁽¹⁾
	(Mbbls)	(MMcf)	(Mboe)	(Mboe)

Proved developed producing	4,459	1,846	4,767	3,482
Proved developed non-producing	360	13	363	1,080
Proved undeveloped	6,527	310	6,578	7,013
Total proved	11,346	2,169	11,708	11,573
Probable	12,912	1,307	13,130	12,071
Total proved plus probable	24,258	3,476	24,838	23,645

Notes:

(1) BOE's may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio of 6 Mcf: 1barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Net Present Value of Reserves -- Forecasted Prices and Costs

Net Present Values of Before Tax Future Net Revenue Discounted at
	0%	5%	8%	10%	12%	15%	20%
($000's)
Proved
Developed producing	173,864	163,756	158,387	155,058	151,909	147,495	140,858
Developed non-producing	7,812	6,668	6,093	5,747	5,429	4,995	4,371
Undeveloped	157,468	130,379	117,259	109,511	102,439	92,919	79,422
Total proved	339,145	300,803	281,739	270,317	259,778	245,409	224,652
Probable	397,635	278,904	234,469	211,170	191,516	167,172	136,221
Total proved plus probable	736,780	579,707	516,209	481,487	451,293	412,581	360,873

Net Present Values of After Tax Future Net Revenue Discounted at
	0%	5%	8%	10%	12%	15%	20%
($000's)
Proved
Developed producing	173,864	163,756	158,387	155,058	151,909	147,495	140,858
Developed non-producing	7,812	6,668	6,093	5,747	5,429	4,995	4,371
Undeveloped	149,517	123,479	110,900	103,481	96,701	87,614	74,728
Total proved	331,194	293,903	275,380	264,286	254,037	240,104	219,958
Probable	306,959	213,017	177,803	159,357	143,887	124,629	100,351
Total proved plus probable	638,152	506,920	453,183	423,643	397,845	364,732	320,308

Notes:
Columns may not add due to rounding

Reconciliation of Changes in Reserves

The following table summarizes the changes in the Company's share of oil and natural gas reserves (before royalties) from December 31, 2009 to December 31, 2010.

	Oil & NGLs			Natural gas			BOE
	Proved	Probable	Total	Proved	Probable	Total	Total
	(Mbbls)	(Mbbls)	(Mbbls)	(MMcf)	(MMcf)	(MMcf)	(Mboe)
Balance, Dec 31, 2009	10,754	11,795	22,549	4,914	1,659	6,573	23,645
Production	(2,327)	-	(2,327)	(1,261)	-	(1,261)	(2,537)
Extensions	3,242	1,624	4,866	36	10	46	4,874
Technical revisions	1,841	42	1,883	773	407	1,181	2,080
Improved recovery	128	31	159	-	-	-	159
Acquisitions	154	253	407	43	15	58	417
Dispositions	(2,489)	(944)	(3,434)	(2,327)	(782)	(3,110)	(3,952)
Economic factors	42	113	155	(8)	(2)	(10)	153
Balance, Dec 31, 2010	11,347	12,912	24,259	2,170	1,307	3,477	24,838

The pricing assumptions used in the Sproule evaluation are summarized below.

Pricing Assumptions -- Forecast Prices and Costs

Year	WTI Cushing 40° API	Edmonton Par Price 40° API	Western Canadian Select 20.5° API	Alberta AECO-C Spot	Inflation rate	Exchange rate
	(US$/bbl)	(CDN$/bbl)	(CDN$/bbl)	(CDN$/MMBtu)	(%/yr)	(US$/Cdn$)
2011	88.40	93.08	80.04	4.04	1.5	.932
2012	89.14	93.85	80.71	4.66	1.5	.932
2013	88.77	93.43	78.48	4.99	1.5	.932
2014	88.88	93.54	76.70	6.58	1.5	.932
2015	90.22	94.95	77.86	6.69	1.5	.932
2016	91.57	96.38	79.03	6.80	1.5	.932
2017	92.94	97.84	80.23	6.91	1.5	.932
2018	94.34	99.32	81.44	7.02	1.5	.932
2019	95.75	100.81	82.67	7.14	1.5	.932
2020	97.19	102.34	83.92	7.26	1.5	.932
Escalation rate of 1.5% thereafter

Notes:

(1) The pricing assumptions were provided by Sproule Associates Unconventional Limited
(2) None of the Company's future production is subject to a fixed or contractually committed price.

On a net present value basis (10% discount, before tax), approximately 64% of the value of reserves were attributable to the Onion Lake area and 31% was attributable to the Mooney area. No reserves were assigned to the Blackrod project.

Definitions:

(a) "Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
(b) "Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
(c) "Developed" reserves are those reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would involve a low expenditure (e.g. when compared to the cost of drilling a well) to put the reserves on production.
(d) "Developed Producing" reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.
(e) "Developed Non-Producing" reserves are those reserves that either have not been on production, or have previously been on production, but are shut in, and the date of resumption of production is unknown.
(f) "Undeveloped" reserves are those reserves expected to be recovered from know accumulations where a significant expenditure (for example, when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves classification (proved, probable, possible) to which they are assigned.
(g) The Net Present Value (NPV) is based on Sproule Forecast Pricing and costs. The estimated NPV does not necessarily represent the fair market value of our reserves. There is no assurance that forecast prices and costs assumed in the Sproule evaluations will be attained, and variances could be material.

Contingent Resources

The following tables summarize certain information contained in the contingent resource evaluations prepared by Sproule as of December 31, 2010. The reports were independently prepared in accordance with definitions, standards and procedures contained in the COGE Handbook.

It should not be assumed that the estimates of recovery, production, and net revenue presented in the tables below represent the fair market value of the Company's contingent resources. There is no assurance that the forecast prices and cost assumptions will be realized and variances could be material. The recovery and production estimates of the Company's contingent resources provided herein are only estimates and there is no guarantee that the estimated contingent resources will be recovered or produced. Actual contingent resources may be greater than or less than the estimates provided here. The contingencies which currently prevent the classification of these contingent resources as reserves consist of further delineation drilling, regulatory applications, preparation of firm development plans and corporate approvals to proceed with development. Once all regulatory and corporate approvals are received and any other contingencies are removed, the resources may then be reclassified as reserves. There is no certainty that it will be commercially viable for the Company to produce any portion of the contingent resources on any of its properties.

Summary of Best Estimate (P50) Contingent Resource -- By Property ⁽¹⁾⁽³⁾

Project	Gross⁽²⁾ Heavy Oil//Bitumen	Net Present Values of Before Tax Future Net Revenue as of December 31, 2010 Contingent Resources -- Best Estimate Discounted at
		0%	5%	8%	10%	12%	15%	20%
	(MMboe)	($million)

Blackrod	619	14,882	5,041	2,854	2,011	1,447	912	453
Onion Lake	80	3,307	1,551	1,044	817	647	465	276
Mooney	40	998	474	325	257	205	148	87
Total	739	19,187	7,066	4,223	3,085	2,299	1,525	816

Project	Gross⁽²⁾ Heavy Oil//Bitumen	Net Present Values of After Tax Future Net Revenue as of December 31, 2010 Contingent Resources -- Best Estimate Discounted at
		0%	5%	8%	10%	12%	15%	20%
	(MMboe)	($million)

Blackrod	619	11,132	3,700	2,065	1,438	1,020	627	294
Onion Lake	80	2,414	1,117	742	574	449	314	173
Mooney	40	749	352	239	188	148	105	59
Total	739	14,295	5,169	3,046	2,200	1,617	1,046	526

Notes:

(2) Contingent Resources are defined in the COGE Handbook as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. It is also appropriate to classify as Contingent Resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage.
(3) Best estimate (P50) is a classification of estimated resources described in the COGE Handbook as being considered to be the best estimate of the quantity that will be actually recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50% probability that the quantities actually recovered will equal or exceed the best estimate.
(4) The estimates of contingent resources (best estimate) and future net revenue for individual properties may not reflect the same confidence levels as estimates of contingent resources (best estimate) and future net revenues for all properties, due to the effects of aggregation.
(5) "Gross" means the Company's working interest share in the contingent resources of bitumen and heavy oil before deducting royalties. The Company has a 100% working interest at Blackrod and Mooney, and a 87.5% working interest at Onion Lake.
(6) The amounts included in these tables do not include the volume and value of BlackPearl's proved and probable reserves previously assigned by Sproule to these properties.