Excelsior Energy Limited

Excelsior Energy Limited

November 28, 2008 18:36 ET

Excelsior Announces Third Quarter 2008 Results

CALGARY, ALBERTA--(Marketwire - Nov. 28, 2008) - Excelsior Energy Limited (TSX VENTURE:ELE) ("Excelsior" or the "Company") is pleased to report results for the three and nine month periods ended September 30, 2008. The financial statements and associated management's discussion and analysis can be found online at www.sedar.com. The Company continues to focus efforts on oil sands exploration and appraisal in the Hangingstone and West Surmont areas in the Athabasca oil sands region of Alberta. Excelsior's plans to submit a 10,000 bbl/d SAGD demonstration project application at Hangingstone ("the Project Application") in the summer of 2009.

"The Company continues to make good progress on its Project Application. We have high quality bitumen resource, in close proximity to infrastructure which will drive the project cycle-time and capital efficiency" said Dr. David Winter, Excelsior's President and Chief Executive Officer. "We look forward to a successful winter core and seismic program and we anticipate submitting our project application next summer. We will continue to be conservative and cautious in our capital deployment and we are fully funded through 2009 into 2010".

Third Quarter Highlights

- As announced on July 29, 2008, an independent engineering report on the Hangingstone asset was completed by McDaniel and Associates in July 2008, ("the Report"). The Report assigned 119 mmbbls of Contingent Resources which were further sub-classified as economic. The Report also assigned 1.58 billion barrels of Discovered Resource (Petroleum initially in place) and a further 86 mmbbls of Prospective Resource. The Report indicates that the Contingent Resources support an economically feasible commercial project.

- In August 2008 the Company announced an equity financing to fund the 2008/2009 winter drilling program. The financing was completed on September 3, 2008 for gross proceeds of $11,286,848. The proceeds from this financing contributed to working capital of $14,454,765 at September 30, 2008. The Company is fully funded for the Hangingstone seismic, drilling and Project Application related work. As a result Excelsior does not anticipate a requirement for financing over the next 12 months. Management will continue to monitor financial markets during this period to evaluate access to capital

- Excelsior commenced its planning and engineering studies to support its application for a 10,000 bopd demonstration project. A qualified environmental and engineering company has been contracted to assist in regulatory application and environmental assessments for the Project Application. Field work commenced in August 2008.

- The Company completed a 28 km infill seismic program in October in the focus area in support of winter core drilling operations. The 2D program was interpreted and integrated into mapping in November and used to target winter drilling locations.

Fourth Quarter Outlook

- Excelsior continues to progress its program to submit a 10,000 bopd Project Application to the Alberta Government targeted for the end of Q2 2009. Planning and engineering studies for the Project Application have commenced.

-- An Environmental Consultant and Submission Coordinator has been engaged to complete an environmental impact assessment at Hangingstone. The environmental work commenced in August and will continue through the winter and spring. Constraint mapping was completed in October for the proposed site of the SAGD central processing facility.

-- A water source has been identified within the focus area and mapped using well and seismic data. Existing well data indicates that the water is saline and likely available for industrial use. The water source aquifer will be flow tested in December 2008 as part of the winter drilling program.

-- A cap rock integrity evaluation has commenced with an evaluation of wellbore image logs across the seal formation. This work indicates that the cap rock shales are thick (50 - 70 meters) with very few natural fractures indicating cap rock integrity to be high. This will be confirmed by core tests which will be obtained in December as part of the drilling program.

-- Excelsior has engaged an engineering company with extensive oil sands and SAGD experience to prepare the front end engineering and design for the development project application. This contractor expects to finalize the Project Application in Q2 2009 when the results of the 2008/2009 drilling program have been evaluated.

-- Active consultation with all stakeholders has begun. Excelsior will continue to fulfill its obligations regarding stakeholders consultation as operations progress.

- Alberta Energy Resources Conservation Board has approved the Company's Exploration Activities Permit and Excelsior has commenced operations for the 2008/2009 winter drilling program to delineate the focus area identified for the Project Application in the south eastern portion of the Hangingstone asset.

The following information should be read in conjunction with the management discussion and analysis and unaudited interim consolidated financial statements for the three and nine months ended September 30, 2008, available online at www.sedar.com.

Selected Information

Nine Months Nine Months Three Months Three Months
Ended Ended Ended Ended
($'s except weighted Sept 30, Sept 30, Sept 30, Sept 30,
average shares) 2008 2007 2008 2007
Gas sales 97,520 76,357 15,408 16,537
Royalties (15,531) (16,830) (3,070) (2,894)
Operating expenses (26,225) (10,721) (8,159) (2,456)
Net gas sales 55,764 48,806 4,179 11,187
Interest and other
income 243,335 243,021 51,388 188,683
General and
administrative expense 1,111,375 811,834 407,453 316,607
Net loss and
comprehensive loss (2,078,999) (3,654,264) (666,845) (3,303,554)
Loss per share (basic
and diluted) (0.02) (0.07) (0.01) (0.03)
Capital expenditures
Petroleum and natural
gas properties - cash 11,659,794 28,412,026 403,090 19,457,407
Cash flows
Cash flows from (used in)
operations (686,336) (763,217) (396,652) (190,641)
Cash flows used in
investing (12,942,898) (25,088,095) (601,375) (16,209,836)
Cash flows from
financing 12,589,426 37,039,800 10,477,701 1,192,624
Change in cash and
cash equivalents (1,039,808) 11,188,488 (9,479,674) (15,207,853)
Cash and cash
equivalents, beginning
of period 15,848,648 3,965,957 5,329,166 30,362,298
Cash and cash
equivalents, end of
period 14,808,840 15,154,445 14,808,840 15,154,445
Weighted average number
of shares outstanding 112,251,793 54,812,486 119,244,452 93,971,291

About Excelsior Energy

Excelsior is active in oil sands exploration and appraisal in the Hangingstone and West Surmont areas near Fort McMurray, Alberta and will hold a 75% working interest in 58 contiguous sections on completion of its farm-in obligations. The Company also indirectly holds a 75% working interest in Blocks 16/1a and 16/6c in the UK North Sea and a minor interest in gas production in Alberta. Excelsior's strategy is to capture oil and gas appraisal and development opportunities where we can leverage Management's diverse international experience and field development expertise. This includes heavy oil reservoir engineering and development of complex fields.

Forward Looking Statements

This press release contains forward-looking statements. Management's assessment of future plans and operations, expected production levels, operating costs, capital expenditures, the nature of capital expenditures, methods of financing capital expenditures, future engineering reports and the timing of increases in production may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could effect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward looking statements contained in this press release are made as at the date of this press release and the Company does not undertake any obligation to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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

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