Solara Exploration Ltd.
TSX VENTURE : SAA.A
TSX VENTURE : SAA.B

Solara Exploration Ltd.

June 02, 2006 11:50 ET

Solara Exploration Announces First Quarter 2006 Financial and Operating Results

CALGARY, ALBERTA--(CCNMatthews - June 2, 2006) - Solara Exploration Ltd. (TSX VENTURE:SAA.A) (TSX VENTURE:SAA.B) ("Solara" or the "Company") is pleased to announce its unaudited financial and operating results for the three (3) month period ended March 31, 2006.

Highlights

- Participated in the drilling of 15 wells for two oil, nine gas and four dry
and abandoned wells.

- Invested $3.2 million in capital expenditures and future commitments.

- Negotiated the acquisition of a privately owned oil and gas company
producing 105 boe/d comprised of mostly oil.

- Entered into three joint venture agreements which provide for the drilling of up to six wells on Alberta prospects.

We are pleased to report that Solara accomplished several important objectives in the three months ended March 31, 2006. Through a combination of successful drilling activities and the negotiation of a corporate acquisition, the Company has added approximately 340,000 boe in proved and probable reserves. This estimate is based on management's estimates of reserve additions from recent drilling results and the GLJ Petroleum Consultant's evaluation at December 31, 2005 of the acquired company's reserves. Solara participated in the drilling of 15 wells resulting in two oil, nine gas and four dry and abandoned wells. The Company's production and reserves increased significantly upon the closing of the corporate acquisition on May 15, 2006 and will continue to increase once various tie-in activities are completed for wells previously drilling. The Company expects significant improvement in both financial and operating results as a result of its capital expenditure activities in the first quarter of 2006 and the subsequent corporate acquisition.

As at March 31, 2006, Solara reported working capital of $9,254,011. During the period, the Company had oil and gas production revenues of $127,976 and a net loss (before income taxes) of $159,171. Solara has filed its unaudited financial statements and management discussion and analysis for the three months ended March 31, 2006 with the Canadian securities regulatory authorities on SEDAR. This information may be accessed electronically at www.sedar.com.

Solara Exploration is an emerging junior oil and gas company focused on the exploration, development and acquisition of oil and natural gas in western Canada.

ADVISORY: Certain information regarding the Company including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserve estimates, environment risks, competition from other producers and ability to assess sufficient capital from internal and external source. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.

15,651,568 Class A Shares

1,044,000 Class B Shares

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

Contact Information

  • Solara Exploration Ltd.
    Donald R. Holding
    President and Chief Executive Officer
    (403) 537-0458
    (403) 537-0462 (FAX)
    Email: don_solaraexploration@shaw.ca
    or
    Solara Exploration Ltd.
    1800, 444 - 5th Avenue S.W.
    Calgary, Alberta T2P 2T8