Eagle Rock Exploration Ltd.

Eagle Rock Exploration Ltd.

November 27, 2007 18:47 ET

Eagle Rock Announces Third Quarter 2007 Results

CALGARY, ALBERTA--(Marketwire - Nov. 27, 2007) - Eagle Rock Exploration Ltd. ("ERX" or the "Company") (TSX VENTURE:ERX) is pleased to announce it has filed on SEDAR its unaudited financial statements for the third quarter ended September 30, 2007 together with the accompanying management's discussion and analysis.

Selected quarterly information

The following table provides a summary of key quarterly operational and
fiscal results.

$000's except Q3 Q2 Q1 Q4 Q3 Q2 Q1
production and 2007 2007 2007 2006 2006 2006 2006
per share amounts $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's
Average daily
production - boed 584 549 563 464 202 225 82
Petroleum and natural
gas revenue 3,455 2,887 2,652 2,127 1,086 1,249 340
Total revenues net
of royalties 2,857 2,421 2,232 1,905 832 892 294
Cash flow from
operations 1,720 1,174 808 540 345 515 (1)
Loss for the period (217) (412) (785) (626) (63) (46) (211)
Basic and diluted
loss per share (0.005) (0.010) (0.020) (0.017) (0.003) (0.002) (0.015)
Capital expenditures 2,313 4,193 2,308 7,904 1,924 1,993 1,068
Total assets 32,312 31,966 28,952 29,929 29,230 13,462 6,802
Net debt (6,483) (9,222) (6,203) (4,710) 2,650 7,042 1,282
equity 18,902 19,094 19,394 21,949 22,654 12,109 5,211
Common shares
- basic 39,662 39,662 39,662 39,636 38,686 26,021 20,501
Common shares
- fully diluted 43,259 43,339 43,059 43,057 41,801 28,131 22,356
Weighted average
common shares
outstanding 39,662 39,662 39,662 25,750 21,221 17,733 13,910

Q3 2007 Highlights

The Company's operational and financial status continued to improve during the third quarter of 2007. Average daily production rates have increased by 120 boed from 464 boed at year end 2006 to 584 boed at the end of Q3 2007, an increase of 25%.

- Q3 2007 average daily production increased to 584 boed, an increase of 382 boed (189%) over Q3 2006 average daily production of 202 boed

- Q3 2007 revenues (net of royalties) increased to $2,857,000 from $832,000 in Q3 2006, an increase of $2,025,000 (243%)

- cash flow from operations increased to $1,720,000 in Q3 2007, an increase of $1,375,000 (389%) over Q3 2006 cash flow from operations of $345,000

- cash flow per share doubled from $0.02/share in Q3 2006 to $0.04/share in Q3 2007

Q3 2007 Operational Update

On the operational front, ERX drilled a total of 2 gross wells (100%) in the Q3 2007 resulting in 1 dry hole and 1 oil well with initial production rates of approximately 50 bbls/d.

Update on Current Operations

In October, 2007 ERX closed a non-brokered flow-through financing by issuing 8.2 million common shares at a price of $0.50 per common share for gross proceeds of $4.1 million, such funds allocated to its 5 well drilling program and 3D seismic program.

During October 2007 the Company drilled 4 wells (4 net) in Alberta. One well has been abandoned and the others are oil wells in various stages of testing (dual zones), completion and tie-in. The Company plans to drill one additional well (1 net) in Saskatchewan in 2007.

All of ERX's current production is crude oil with the minor amounts of produced natural gas being used as fuel gas for ERX's field operations. Approximately 50% of ERX's production is from Alberta properties and the other 50% is from Saskatchewan properties. ERX estimates that the new Alberta royalty framework, to take effect in 2009, assuming the current mix of Alberta and non-Alberta production, will reduce ERX's overall cash flow from operations by no more than 5%.

The Company's current total production is approximately 625 boed.

About Eagle Rock

Eagle Rock Exploration Ltd. is a publicly traded energy company involved in the exploration and development of low to medium risk oil and gas properties in Western Canada.

Eagle Rock Exploration Ltd. trades on the TSX Venture Exchange under the symbol ERX.

For more information please visit us at www.eaglerockexploration.com

Forward-looking Information

This press release includes forward-looking statements and assumptions respecting ERX's strategies, future operations, expected financial results, financial sources, commodity prices, costs of production and quantum of oil and natural gas reserves and discusses certain issues, risks and uncertainties that can be expected to impact on any of such matters. By their nature, forward-looking statements are subject to numerous risks and uncertainties that can significantly affect future results. Actual future results may differ materially from those assumed or described in such forward-looking statements as a result of the impact of issues, risks and uncertainties whether described herein or not, which ERX may not be able to control. The reader is therefore cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof and ERX undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement. In addition, the term BOE or BOE's may be misleading, particularly if used in isolation. A BOE (barrel of oil equivalent) conversion ratio of 6 Mcf per one (1) BOE is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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

Contact Information

  • Eagle Rock Exploration Ltd.
    Jim Silye
    President and Chief Executive Officer
    (403) 269-4040
    (403) 261-1978 (FAX)
    Email: jimsilye@eagler.ca
    Eagle Rock Exploration Ltd.
    Steven J. Glover
    Vice-President, Finance, and Chief Financial Officer
    (403) 269-4040
    (403) 261-1978 (FAX)
    Email: sglover@eagler.ca