Expedition Energy Inc.

Expedition Energy Inc.

May 30, 2006 17:31 ET

Expedition Announces Filing of 2006 First Quarter Report

CALGARY, ALBERTA--(CCNMatthews - May 30, 2006) - Expedition Energy Inc. ("Expedition" or "Corporation") (TSX VENTURE:XPD) announces that the Corporation's first quarter 2006 Financial Statements together with the related management's discussion and analysis have been filed. For a complete copy of the report please visit www.sedar.com or the Corporation's website at www.xpdenergy.com.

Highlights of the first quarter 2006 include:

- Q1 average production increased 271% to 434 boepd as compared to 117 boepd in Q1 2005 and a 29% increase over 336 boepd achieved in Q4 2005.

- Revenue net of royalties increased in Q1 to $1,453,792 compared to $313,758 in Q1 2005.

- Cash flow increased to $718,757 compared to $40,659 in Q1 2005.

- Net loss of ($123,400) in Q1 compared to a loss ($71,934) in the same period in 2005.

First Quarter and ongoing Operations

During the first quarter two wells were completed at Erskine and Cessford, AB. and a well at Ferrier, AB. was tied in. In late April the Erskine well was tied in and in early May the well at Cessford, AB. was tied in. These wells have added approximately 70 boepd net to Expedition's production. The completion at Erskine has also proved up shallow gas and CBM on the lands to add to inventory for future development. Gas plant turnaround and gathering system maintenance in the Central and W. Central Alberta area is expected to intermittently disrupt production during the last week of May through the first week of June 2006.

The first quarter reflects ongoing improvements in production as the Corporation's average increased to 434 boepd as compared to 117 boepd in Q1 2005 and 336 boepd in Q4 2005. Although production was higher in the first quarter, revenue and cashflow are lower on a quarter over quarter basis due predominantly to gas prices falling approximately 34% from $11.81 per mcf in Q4 2005 to $7.63 in Q1 this year. Current production is approximately 500 boepd including the additions from newly tied in wells. Production is now weighted approximately 78% gas, 6% light oil & NGLs, and 16% heavy oil.

The planned drilling of three wells in the first quarter was delayed due to rig availability and an early spring break up. After break up, one step out well was drilled at Kerrobert, SK., which was unsuccessful as a heavy oil well but has been cased for salt water disposal. We expect to have rigs available over the coming weeks for drilling a horizontal development oil well at Kerrobert, SK. and an exploratory oil well at Cessford, AB.

For the remainder of 2006, Expedition has firmed up numerous drilling locations from Ferrier to the Peace River Arch. These locations will target both light oil and conventional gas. In addition to actively working on its own lands, the Company has also entered into several farm-in and joint venture arrangements with other industry partners to enhance its prospect inventory. Wells are being planned for two new focus areas, Ante Creek and Niton, as well as for the existing core Ferrier area. Leases will be prepared so that we are 'drill ready' as rigs become available to carry out the remainder of our drilling program. One exploration well and two development wells will be drilled for oil in the program, success on any of these targets could add several oil locations to Expedition's drilling inventory.

As a result of lower gas prices and operational delays during Q1 and Q2, this year's budget will be affected. Q2 gas pricing has been reduced further at this point below our budget assumption of $7.50 per mcf; therefore Expedition's management is reviewing cashflow, debt and financing options to execute a reduced Cap-ex program. The Company will be issuing new guidance as to projected year end capital expenditures, production and cashflow in the coming weeks. These changes have been made to maximize our cashflow and to continue the growth of Expedition.

The term barrels of oil equivalent or boe may be misleading, particularly if used in isolation. The boe conversion ratio used by Expedition of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions herein are derived by converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil.

This information contains forward-looking statements (forecasts) under applicable securities laws. Forward-looking statements are necessarily based upon assumptions and judgments with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, and the regulatory and legal environment. Many of these factors can be difficult to predict. As a result, the forward-looking statements are subject to known or unknown risks and uncertainties that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements.

Expedition Energy Inc. is an emerging Alberta based public corporation actively engaged in the exploration, development and production of crude oil and natural gas in Western Canada. The Company continues to follow its strategy of internally developing prospects, securing land in core areas, and growing predominantly through drilling. Selective acquisitions that support core area growth are also considered. The company strives to maintain a high working interest and operate properties. Expedition's shares are listed for trading on the TSX Venture Exchange under the symbol XPD.

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

Contact Information

  • Expedition Energy Inc.
    Scott St. John
    President and CEO
    (403) 264-1699
    (403) 264-1499 (FAX)
    Expedition Energy Inc.
    725, 435 - 4th Avenue S.W.
    Calgary, Alberta T2P 3A8
    Website: www.xpdenergy.com
    QIS Capital Corp.
    Doren Quinton
    Investor Relations
    (250) 376-8989
    E-mail: info@qiscapital.com