BrazAlta Resources Corp.

BrazAlta Resources Corp.

November 28, 2007 13:08 ET

BrazAlta Resources Corp. Announces First Quarter Results

CALGARY, ALBERTA--(Marketwire - Nov. 28, 2007) - BrazAlta Resources Corp. (TSX VENTURE:BRX) ("BrazAlta" or the "Corporation") is pleased to announce that it has filed its unaudited consolidated financial statements for the three months ended September 30, 2007 ("Financial Statements") and related Management Discussion and Analysis ("MD&A"). Copies of the filed documents may be obtained via SEDAR at or on the Corporation's website at


- In the Reconcavo basin in Brazil, drilled, cased and completed 5 (2.4 net) new wells, of which 2 (FRB-05 and SA-42) are currently on long-term production tests; 1 (0.48 net) was wet and has been abandoned; and 2 (0.95 net) are still being evaluated.

- During the quarter Brazilian net production averaged 132 bbl/day and Canadian net production averaged 22 boe/day.

- Continued geological and geophysical interpretation of BrazAlta's vast onshore exploration blocks and continued to develop our detailed drilling campaign for exploration blocks, completing surface leases, permitting and infrastructure in preparation for drilling on numerous blocks.

- Our drilling services subsidiary, BCH Energy Services ("BCH"), expanded its fleet to a total of seven rigs comprised of six drilling rigs and one service rig by purchasing or contracting to purchase an additional four drilling rigs during the quarter. Two of the newly purchased rigs were mobilized to Brazil and the remaining two will be mobilized to Brazil in Q2.

- BCH also mobilized BCH-01 to the Espirito Santo region and BCH-02 to the Rio Grande de Norte region from Bahia, to begin work for Petroleo Brasiliero S.A. ("Petrobras") under two of the four multi-year drilling contracts. The rigs spudded their first wells for Petrobras in October.

- In order to service contracts with Petrobras, BCH established two new field bases during the quarter in Mossoro, Rio Grande de Norte and Sao Mateus, Espirito Santo complementing its main field office in Catu, Bahia and in-country head office in Rio de Janeiro.

- In August BCH, closed a senior secured medium term loan credit facility of $30.0 million US and during Q1 completed one draw on the facility for $13.7 million US to fund the expanding rig fleet and operations of BCH in the Brazilian oilfield services sector. Subsequent to the end of Q1, a second draw of $14.5 million US was taken bringing the total amount drawn on the facility to $28.2 million US.

- In August, BrazAlta and W.Washington jointly closed a reserves based $50.0 million US revolving line of credit facility. W.Washington entered into the credit agreement as the borrower and completed a first draw on the facility of $9.0 million US gross ($4.3 million US net for BrazAlta).

- The Corporation added $3.6 million to the balance sheet through the exercise of share purchase warrants in July.


Selected financial results outlined below should be read in conjunction with the BrazAlta's unaudited consolidated financial statements and related MD&A.

As at and for the Three Months Ended
September 30, 2007 2006
($000s), except share data
Petroleum and natural gas sales, net
Brazil 806 850
Canada 56 11
862 861
Drilling services revenue 1,003 121
Interest and other 122 250
1,987 1,232
Funds used in operations (1) (1,084) (940)
Per share - basic and diluted (0.01) (0.02)
Net loss and comprehensive loss (2,722) (1,073)
Per share - basic and diluted (0.03) (0.02)
Capital expenditures
Brazil 4,772 667
Canada 91 125
Northern Ireland - -
Brazil drilling services 18,800 383
23,663 1,175
Total assets 61,754 39,521
Total long-term liabilities 21,600 2,220
Weighted average shares outstanding
Basic and diluted (000s) 79,575 53,525

(1) "Funds used in operations" is not a measure that has a standardized
meaning prescribed by Canadian GAAP and is considered a non-GAAP
measure. Therefore, this measure may not be comparable to similar
measures presented by other issuers. This measure has been presented
above in order to provide shareholders and potential investors with
additional information regarding the Corporation's liquidity and its
ability to generate funds to finance its operations.

As at and for the Three Months Ended
September 30, 2007 2006
Production Brazil Canada Brazil Canada
Crude oil and NGLs (bbl/d) 132 1 134 4
Natural gas (mcf/d) - 125 - 30
Total (boe per day) 132 22 134 9

Average prices
Crude oil and NGLs ($/bbl) 78.70 40.56 77.74 42.32
Natural gas ($/mcf) - 7.15 - 6.32
Oil equivalent ($/boe) 78.70 42.82 77.74 40.07

Operating netback ($/boe)
Commodity revenue 78.70 42.82 77.74 40.07
Non-refundable sales taxes (6.88) - (2.40) -
Realized loss on financial derivatives (0.52) - - -
Royalties (5.13) (14.68) (5.17) (3.34)
Transportation & processing (13.00) - (12.01) -
Well workover & repair (7.43) - - -
Operating expenses (31.68) (15.70) (15.51) (13.07)
Netback (2) 14.06 12.44 42.65 23.66

(2) "Netback " per boe is calculated as revenues net of sales taxes and
royalties, less transportation & processing charges, well workover and
repair, operating expenses and then divided by boe produced. Netbacks
do not have a standard meaning prescribed by GAAP and therefore may not
be comparable to similar measures used by other companies.

BrazAlta is a publicly traded Canadian based international oil and gas corporation with operations in Brazil, Northern Ireland and Canada.

BCH is BrazAlta's drilling services subsidiary which provides drilling and workover services in Brazil.

W.Washington is BrazAlta's partner with respect to BrazAlta's Brazilian exploration and production operations in the Reconcavo, Sergipe and Tucano basins of Brazil.

This press release may contain statements within the meaning of safe harbour provisions as defined under Securities Laws and Regulations. The above statements are based on the current expectations and beliefs of BrazAlta's management and are subject to a number of risks and uncertainties that may cause the actual results to differ materially from those described above. BrazAlta does not undertake any responsibility with regard to the accuracy of this press release nor the obligation to update the abovementioned information.

This press release contains certain forward-looking statements within the meaning of applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation cannot assure that actual results will be consistent with these forward looking statements. They are made as of the date hereof and are subject to change and the Corporation assumes no obligation to revise or update them to reflect new circumstances, except as required by law. Prospective investors should not place undue reliance on forward looking statements. These factors include the inherent risks involved in the exploration for and development of crude oil and natural gas properties, the uncertainties involved in interpreting drilling results and other geological and geophysical data, fluctuating energy prices, the possibility of cost overruns or unanticipated costs or delays and other uncertainties associated with the oil and gas industry. Other risk factors could include risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities, and other factors, many of which are beyond the control of the Corporation. A barrel of oil equivalent (boe) is derived by converting gas to oil in the ratio of six thousand cubic feet of gas to oil and may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead, especially in various international jurisdictions.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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