Redcliffe Exploration Inc.
TSX VENTURE : RXI.A
TSX VENTURE : RXI.B

Redcliffe Exploration Inc.

October 22, 2007 09:30 ET

Redcliffe Announces Successful Completion Results, Updates Q4 Drilling Program and Production Tie-Ins

CALGARY, ALBERTA--(Marketwire - Oct. 22, 2007) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. PERSONS.

Redcliffe Exploration Inc. (TSX VENTURE:RXI.A) (TSX VENTURE:RXI.B) ("Redcliffe" or the "Company") provides the following activity update:

Completion Activities

Redcliffe is pleased to announce that is has successfully completed and tested its new Wapiti exploratory well (37.5% W.I.), in the Peace River Arch that was drilled over the summer. The flow test resulted in gas production of 2,600 mcf/d gross plus an estimated 20 bbl/mmcf of liquids from two zones. The well is close to existing infrastructure and is currently being tied-in; it is expected to commence production in December 2007.

Q4 Drilling Program

Redcliffe previously announced the initiation of its fall drilling program, pursuant to which the Company expects to drill a minimum of 7 wells, 4-5 in the Pembina area and 3 on the Gold Creek property prior to year-end. During the first quarter of 2008 an additional 4-5 wells are anticipated to be drilled in these two core areas.

At Pembina, Redcliffe will operate the drilling of 4 wells as the first step in our 6 well commitment within the previously announced 67 section block farm-in, offsetting successful gas wells at Crystal and our existing Pembina acreage. These wells will target multi-zone, liquids-rich gas up to 2,100 meters in depth. Site preparation for the Pembina wells is in progress and the first well commenced drilling on the weekend. In addition, Redcliffe has commenced the completion and testing of 4 existing wells within this farm in project. As a result of a recently acquired operating interest in a gas processing facility in the area, successful Pembina activity is expected to translate into production increases this winter.

In the Gold Creek Wapiti area located on the southern flank of the Peace River Arch. Redcliffe has working interests ranging from 30% to 100% in 30 sections of land. Based on the result of the five wells drilled to date on these lands, geologic mapping, and 3-D seismic, Redcliffe has identified an additional 10 drilling locations following up the two major gas/liquids discoveries made in late 2006. The initial three well (one net) drilling program at Gold Creek has commenced. Leases for two wells (0.7 net) are under construction, and a drilling rig has been contracted with the first well expected to spud by the end of October. With success, tie-in of these wells into the newly expanded gathering and processing system is anticipated to require approximately two months following completion, with production on stream before spring breakup.

Production Tie-ins

Over the course of 2007, Redcliffe has been delayed in bringing production on stream due primarily to third party plant and transportation issues. Over the past several weeks, production has commenced from two of the Company's shut-in wells. Redcliffe's current production is approximately 540 boe/d (2,650 mcf/d of natural gas and 95 bbl/d of oil and natural gas liquids). The Company expects further 2007 production increases estimated at 360 boepd from one shut-in oil well in the Pembina area, tie-in of the Wapiti gas discovery, and commencement of full production from the Gold Creek 13-25 discovery. In addition, the testing and tie-in of up to 4 wells in the Pembina farm-in area, as well any drilling success achieved in our Q4 drilling program, may add to the Company's production capability in Q4 2007. Redcliffe's target production capability at year-end is 1,000 boe/d. In addition, the previously announced business combination with Redcliffe Energy Ltd., completion of which is expected before year-end, will add approximately 250-300 boe/d of production.

Tie-in of the 2006 Gold Creek 13-25 gas well (WI 30%) had been delayed pending the acquisition of sufficient processing capacity. During the summer, Redcliffe, along with partners, entered into an agreement with the current operator of the gathering and compression facilities to acquire a working interest in the compression facilities by paying to increase the compression and through put capability of the facility. Redcliffe is pleased to announce completion of the tie-in operations. One of the zones from this well is now on production at a gross rate of 500 mcfpd and 45 bbl/mmcf of associated liquids. The well is choked back due to limited capacity available pending completion of the compression facilities.

The expansion of the compression facilities at Gold Creek is progressing smoothly and is on schedule for completion during November. Upon completion of the expansion, Redcliffe and partners will own gathering and compression facilities sufficient to process 12.5 million cubic feet per day of raw gas from its current and future wells in the Gold Creek area. Redcliffe anticipates bringing onto production an incremental net 200 boe/d once the expansion is complete with additional capacity remaining for production from new wells being drilled in the area.

Redcliffe's strategy is to build shareholder value through internally generated exploration and development drilling, and through selective acquisitions. Redcliffe explores for liquid-rich, multi- zone gas at depths of 1,500 - 2,800 meters in the Pembina and Peace River Arch areas of western Alberta.

Forward-Looking Statements: This news release contains certain forward-looking statements, which include assumptions with respect to production and future capital expenditures. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, 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, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, that the Company will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news 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. In addition, the term "BOE" may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead.

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

Contact Information

  • Redcliffe Exploration Inc.
    Daryl H. Connolly
    President & CEO
    (403) 539-8440
    (403) 539-8433 (FAX)
    Email: dconnolly@redcliffe.ca
    or
    Redcliffe Exploration Inc.
    George Gramatke
    Vice President, Finance & CFO
    (403) 539-8442
    (403) 539-8433 (FAX)
    Email: ggramatke@redcliffe.ca