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

Redcliffe Exploration Inc.

January 24, 2008 09:30 ET

Redcliffe Updates Drilling Activity and Production Rates

CALGARY, ALBERTA--(Marketwire - Jan. 24, 2008) -

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

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

Q4/07 Drilling and Completion Activity

Redcliffe previously announced the initiation of its fall drilling program, pursuant to which the Company expected to drill 11-13 wells. A total of 12 (5.23 net) wells were spud between mid October and year-end, of which 5 (1.86 net) were drilled in the Peace River Arch and 7 (3.37 net) in the general Pembina area of central Alberta. All net well calculations are based upon revenue interests unless the well was plugged and abandoned. In addition, Redcliffe undertook the re-completion of 4 (3.07 net) wells in the Pembina area. Redcliffe operated 69% of this activity. Results from the drilling program and associated completion operations to date have yielded 8 gas wells (3.47 net), 2 oil wells (1.22 net) and 2 dry holes (0.54 net) for an overall success rate of 83%. Some of these wells, however, are not fully tested at this time. On the re-completion program the Company was 100% successful with 3 gas wells (2.57 net) and 1 oil well (0.50 net).

In the Gold Creek/Wapiti area located on the southern flank of the Peace River Arch, Redcliffe participated in the drilling of 5 wells resulting in 3 (1.00 net) potential gas wells, 1 (0.72 net) potential oil well and 1 (0.14 net) dry hole. The 3 potential gas wells were 13-24 (WI 30%) at Gold Creek, 4-14 (WI 25%) at Elmworth and a non-operated well (WI 45%) in the Gold Creek area. The non-operated well at Gold Creek has been completed and tested. This well tested over 4,000 mcfpd from two zones and is anticipated to be placed on production in early February. The well was drilled at no cost to Redcliffe and 2-3 potential offsets are proposed for 2008. The potential oil well at 7-3 is scheduled to be completed and tested by Redcliffe during the first half of February. The operator is currently completing the 13-24 gas well in three zones. The non-operated 4-14 potential gas well is expected to be completed and tested in February.

In the Pembina area Redcliffe operated 6 of the 7 wells drilled during this period. The non-operated 10-12 well (WI 50%) was drilled, completed and tested at rates of 1,500 mcfpd. This well will be placed on production in February. Of the 6 operated wells, 4 (1.97 net) were cased as potential gas wells, 1 (0.50 net) as a potential oil well and 1 (0.40 net) was plugged and abandoned. All of these wells are currently being completed and tested.

On the re-completion front Redcliffe enjoyed very good success. In the Pembina area, four wells (3.07 net) were acquired in 2007 through various transactions. New zones were completed and tested in each of these wells. The 3 gas wells 16-21 (WI 100%), 7-1 (WI 100%) and 10-14 (WI 56.7%) were placed on production in January at a combined rate of 2,500 mcfpd plus liquids. The 9-27 oil well (WI 50%) has also been recently placed on production at approximately 30 bopd.

Production Update

Redcliffe is currently producing approximately 4,100 mcfpd and 190 bopd (880 boepd). Near term non-operated compressor and facility construction in the Peace River Arch area during early February is anticipated to add an additional 300 - 400 boepd from existing completed wells. Additional production volumes are anticipated from wells currently in the completion planning process in the Wapiti and Elmworth areas during the first quarter. Redcliffe anticipates announcing its drilling and capital program for 2008 at the end of February once these production and facility operations are completed.

On December 21, 2007 Redcliffe announced, pursuant to the policies of the TSX Venture Exchange and the Company's stock option plan, the granting of 2,316,000 options to purchase Class A shares at an exercise price of $0.40 per share to certain officers, directors, employees and consultants for a period of 5 years. Subsequently, the Board of Directors has resolved to amend these options increasing the exercise price to $0.45 per share and to reduce the option grant to an aggregate of 2,251,000 options, of which 1,556,000 will be granted to officers and directors. Following the completion of this option grant, the Company will have 5,514,583 options outstanding at an average exercise price of $0.48 per share.

Redcliffe also announces the resignation of their Controller. The Vice-President of Finance will assume this responsibility until a new Controller is hired.

Redcliffe's strategy is to build shareholder value through internally generated exploration and development drilling, and through selective acquisitions. Since inception in late 2006, Redcliffe has explored for liquid-rich, multi- zone gas at depths of 1,500 - 2,800 meters in the Pembina and Peace River Arch areas of northwestern Alberta. In 2008 our strategy will be to focus on drilling existing prospects and expanding our deep exploration opportunities in the Peace River Arch area. Redcliffe currently has outstanding 54,405,507 Class A shares and 1,493,831 Class B shares.

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