Storm Exploration Inc.
TSX : SEO

Storm Exploration Inc.

May 11, 2006 22:22 ET

Storm Exploration Inc.: First Quarter Report 2006

CALGARY, ALBERTA--(CCNMatthews - May 11, 2006) - Storm Exploration Inc. (TSX:SEO) is pleased to announce its financial and operating results for the three months ended March 31, 2006.



Three Three
Months Ended Months Ended
Highlights - March 31, March 31,
in $CDN except volumetric amounts 2006 2005
------------------------------------------------------------------------

Financial

Gas sales 15,771,000 8,791,000
NGL sales 1,517,000 2,163,000
Oil sales 2,473,000 1,743,000
Royalty Income 243,000 271,000
--------------------------
Production Revenue 20,004,000 12,968,000
--------------------------

Cash flow from operations 11,310,000 6,718,000
Per share - basic 0.29 0.17
Per share - diluted 0.28 0.17

Net income 4,861,000 3,073,000
Per share - basic 0.12 0.08
Per share - diluted 0.12 0.08

Capital expenditures, net of dispositions 15,681,000 10,339,000

Debt, including working capital deficiency 36,103,000 32,846,000

Weighted average common shares outstanding
Basic 39,254,000 38,673,000
Diluted 41,074,000 39,983,000

Common shares outstanding
Basic 39,942,000 38,673,000
Fully Diluted 42,053,000 41,719,000

Operations

Oil Equivalent (6:1)
Barrels of oil equivalent 361,000 264,000
Barrels of oil equivalent per day 4,009 2,933
Average selling price ($CDN per BOE) $ 54.77 $ 48.09
Royalties 24.3% 25.5%

Gas production
Thousand cubic feet 1,798,000 1,214,000
Thousand cubic feet per day 19,974 13,492
Average selling price ($CDN mcf) $ 8.77 $ 7.24


NGL Production
Barrels 24,000 33,000
Barrels per day 262 371
Average selling price ($CDN per barrel) $ 64.24 $ 64.80

Oil Production
Barrels 38,000 28,000
Barrels per day 417 314
Average selling price ($CDN per barrel) $ 65.84 $ 61.72


Wells drilled
Gross 11.0 5.0
Net 5.7 3.0


Highlights for the Quarter Ended March 31, 2006

- Production averaged 4,009 Boe per day in the first quarter, a 37% increase from production of 2,933 Boe per day in the same period one year ago and a 9% increase from production of 3,665 Boe per day in the fourth quarter of 2005.

- Drilled 13 wells (6.8 net) with a 77% success rate resulting in 7 gas wells (3.3 net) and 3 oil wells (2.1 net).

- Successful wells drilled in the first quarter commencing production in April have resulted in production growing to a current rate of approximately 4,500 Boe per day.

- Four (2.3 net) wells drilled as part of Storm's winter program in the Peace River Arch remain to be completed and tied in during the second and third quarters.

- Cash flow totaled $11.3 million or $0.28 per share fully diluted, an increase of 65% from cash flow of $0.17 per share in the year earlier period.

- Net income increased to $4.9 million or $0.12 per share diluted, an increase of 50% from net income of $0.08/per share in the first quarter of last year.

- Storm's field net back increased to $33.85 per Boe in the first quarter, an improvement of 22% from the prior year period.

- Maintained focus on capital efficiency with first quarter capital expenditures of $15.7 million leaving debt and working capital deficiency at $36.1 million at the end of the quarter, resulting in a debt to annualized cash flow ratio of 0.8 times.

- Storm's credit facility was recently increased to $55 million leaving considerable flexibility to fund acquisitions or to expand the drilling program in the second half of 2006.

- Recorded 110 square kilometers of proprietary 3-D seismic in the Peace River Arch and Cabin-Kotcho-Junior core areas, which will result in additional locations being added to Storm's drilling inventory once the data has been analyzed.

Core Area Review

Peace River Arch, North West Alberta and North East British Columbia

The Peace River Arch is the largest of Storm's core areas, with current net production of approximately 2,625 Boe per day. During the first quarter, Storm recorded 30 square kilometers of 3-D seismic and drilled 3 wells resulting in two gas wells (0.9 net) and one dry hole (0.3 net). Both gas wells were drilled late in the quarter and will be completed in June and tied in during the third quarter. Two workovers were also successful with the completion of a second zone in a producing gas well (1.0 net) adding 400 mcf per day and the completion of a new zone in a suspended gas well (0.8 net), testing 400 mcf per day with tie-in to be completed by the end of May.

Second quarter production from this area will be affected by a third party plant turnaround which will result in 1.5 mmcf per day of Storm's gas production being shut-in for 22 days in June.

A significant amount of activity is planned in this core area during the remainder of 2006 including:

- Drilling 28 wells with 13 wells (9.8 net) at Parkland, six wells (3.7 net) at Teepee, six wells (4.0 net) at Pouce Coupe and three wells (1.5 net) at Buick Creek.

- Installing a second 1,000 horsepower compressor at Parkland and twinning part of the existing gathering system to increase the gross capacity from nine mmcf per day to 18 mmcf per day.

Cabin-Kotcho-Junior, North East British Columbia

As a result of first quarter drilling success, net production from this area has grown to current rates of approximately 1,000 Boe per day.

To date in 2006, Storm has participated in the following activities:

- Recorded two 3-D seismic programs covering 80 square kilometers.

- Drilled three wells (1.2 net) targeting the high impact Slave Point formation with 100% success.

- All three new wells have been tied in and are producing 2.3 mmcf per day of sales gas net to Storm.

Two of the new wells are each producing at gross rates of 1.5 mmcf per day. The third well (0.5 net), which began producing in late April, is being rate restricted to a gross rate 3.5 mmcf per day.

Next winter's drilling plans, which will be finalized by mid-year, are expected to include the drilling of up to five wells consisting of two step-outs in the same pool as the highest rate well drilled in the first quarter, two step-outs targeting pool extensions on the recently recorded 3-D surveys, and one well targeting a potential new pool.

Third quarter production from this area will be affected by an outage at the Fort Nelson Gas Plant which will result in all of Storm's gas production from this area being shut-in for 18 days in July.

Red Earth, Alberta

As a result of recent drilling success, current net production from this area has grown to 275 Boe per day. During the first quarter, Storm drilled 6 wells with 67% success resulting in three oil wells (2.1 net), one gas well (0.55 net), and two dry holes (1.1 net). One oil well (0.55 net) was not completed in the Slave Point formation due to access constraints and will be completed next winter.

During the remainder of 2006, Storm expects to drill four more wells (2.2 net) targeting the light oil Granite Wash formation and two wells (2.0 net) targeting a shallow gas zone. Notably, two of the Granite Wash locations to be drilled this summer are step-outs offsetting a well that was drilled in the fourth quarter of 2005 which is currently producing 300 barrels of oil per day (165 barrels of oil per day net to Storm).

Brazeau-Pembina, West Central Alberta

Storm's net production from this area is currently 500 Boe per day. Storm participated in drilling and casing one gas well (0.5 net) during the first quarter. This well was completed in the Notikewin formation and commenced production in late April at a gross rate of 2.5 mmcf per day.

During the remainder of 2006, Storm plans to participate in the drilling of one infill (0.5 net) offsetting the first quarter Notikewin discovery. Another well will be drilled targeting the Nisku formation on lands that were farmed out in the Lodgepole area with the operator paying 100% of drilling and completion costs to earn a 60% working interest after payout.

Storm Ventures International Inc.

Storm owns 16% of the common shares of Storm Ventures International ("SVI"), a Calgary based, private energy company focused on international exploration and exploitation opportunities.

In the North Sea, SVI's 50% owned affiliate, Silverstone Energy Limited, has drilled the first well as part of its Viking Fields farm-in. This well discovered a new gas pool and the data from this well is being evaluated to determine the pool's potential. Once the technical data from the discovery well has been fully analyzed, a decision regarding a development plan will be generated. The second exploration prospect on this farm-in is expected to be drilled in the late fall.

Outlook

With current production having grown to approximately 4,500 Boe per day, mainly as a result of drilling success over the last 15 months, Storm is well positioned to meet its original guidance consisting of investing $50 million to drill 47 wells (30 net) and achieving a production rate of 5,000 Boe per day by the end of 2006. Our capital program is expected to be funded with cash flow and a modest increase in debt.

The recent reduction in gas prices has reduced cash flow and this has combined with escalating operating and capital costs to create a more challenging business environment. However, Storm's continuing focus on maximizing capital efficiency, our growing portfolio of opportunities, and our large undeveloped land base has left us well positioned for continued success in 2006 and beyond. We are excited about our future growth prospects and look forward to reporting our results to you, our shareholders, as the year progresses.


Respectfully,



Brian Lavergne,
President and Chief Executive Officer
May 11, 2006


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL AND OPERATING RESULTS FOR THE QUARTER ENDED MARCH 31, 2006

Set out below is management's discussion and analysis of financial and operating results for Storm (or the "Company") for the quarter ended March 31, 2006. It should be read in conjunction with the unaudited interim financial statements for the quarter ended March 31, 2006 included in this quarterly report, and the audited financial statements for the year ended December 31, 2005. This management's discussion and analysis is dated May 8, 2006.

Introduction and Limitations:

Basis of Presentation - The financial data presented below has in part been derived from the Company's unaudited financial statements for the quarter ended March 31, 2006, which have been prepared in accordance with Canadian Generally Accepted Accounting Principles ("GAAP") and in accordance with specific accounting policies as set out in footnote 2 to the Company's audited financial statements for the year ended December 31, 2005. The reporting and the measurement currency is the Canadian dollar.

Forward-Looking Statements - Certain information set forth in this document, including management's assessment of Storm's future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company's control, including the effect of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are advised that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Storm's actual results, performance or achievement, could differ materially from those expressed in, or implied by, these forward-looking statements. Storm disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Boe Presentation - For the purpose of calculating unit costs, natural gas is converted to a barrel of oil equivalent ("Boe") using six thousand cubic feet of natural gas as being equal to one barrel of oil unless otherwise stated. Barrels of oil equivalent ("Boe") may be misleading, particularly if used in isolation. A Boe conversion ratio of six mcf to one barrel ("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 in this report are derived by converting natural gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil.

Non-GAAP Measurements - Within Management's discussion and analysis, references are made to terms having widespread use in the oil and gas industry in Canada. Funds from operations and funds from operations per share are not defined by GAAP in Canada and are correspondingly regarded as non-GAAP measures. Measurement of funds from operations is detailed on the Statement of Cash Flows. Funds from operations per share is calculated based on the weighted average number of common shares outstanding consistent with the calculation of net income per share. Netbacks equal total revenue less royalties, transportation and operating costs, calculated on a Boe basis. Total Boe is calculated by multiplying the daily production by the number of days in the quarter.

PRODUCTION AND REVENUE

Average Daily Production



------------------------------------------------------------------------
Three Months Three Months Three Months
Ended March 31, Ended March 31, Ended December 31,
Period 2006 2005 2005
------------------------------------------------------------------------
Natural gas (Mcf/d) 19,974 13,492 18,338
------------------------------------------------------------------------
Natural gas liquids
(Bbls/d) 262 371 299
------------------------------------------------------------------------
Crude oil (Bbls/d) 417 314 310
------------------------------------------------------------------------

Total (Boe/d) 4,009 2,933 3,665
------------------------------------------------------------------------
------------------------------------------------------------------------


For the three months ended March 31, 2006 the Company's production averaged 4,009 Boe per day, an increase of 37% over average production for the three months ended March 31, 2005 and an increase of 9% over the three months ended December 31, 2005. The quarter-on-quarter increases in production came from the Company's successful drilling and exploitation programs throughout 2005 and into the first quarter of 2006. Production per million shares outstanding in the first quarter of 2006 averaged 102 Boe per day, an increase of 34% compared to 76 Boe per day for the first quarter of 2005, and an increase of 9% from 94 Boe for the final quarter of 2005.

Production as of the date of this report approximated 4,500 Boe per day. This represents growth of 400% since inception of oil and gas operations in July 2004.

Production Profile and Per Unit Prices



------------------------------------------------------------------------
Three Months Ended Three Months Ended
March 31, 2006 March 31, 2005
------------------------------------------------------------------------
Average Selling Average Selling
Price Per Unit Price Per Unit
Percentage Before Percentage Before
of Total Boe Transportation of Total Boe Transportation
Period Production Costs Production Costs
------------------------------------------------------------------------
Natural gas 83% $ 7.62 77% $ 7.24
------------------------------------------------------------------------
Natural gas
liquids 7% $64.24 17% $64.80
------------------------------------------------------------------------
Crude oil 10% $65.83 6% $61.72
------------------------------------------------------------------------
Per Boe $49.05 $48.09
------------------------------------------------------------------------
------------------------------------------------------------------------


------------------------------------------------------------------------
Three Months Ended
December 31, 2005
------------------------------------------------------------------------
Average Selling
Price Per Unit
Percentage Before
of Total Boe Transportation
Period Production Costs
------------------------------------------------------------------------
Natural gas 84% $11.71
------------------------------------------------------------------------
Natural gas liquids 8% $66.80
------------------------------------------------------------------------
Crude oil 8% $67.90
------------------------------------------------------------------------
Per Boe $69.78
------------------------------------------------------------------------
------------------------------------------------------------------------


The Company's production base is largely natural gas and associated liquids. For the three months ended March 31, 2006, the AECO C spot price for natural gas averaged Cdn$7.59 per Mmbtu, compared to Cdn$6.84 for the three months ended March 31, 2005. However the average price for the first quarter of 2006 was 34% lower than the price for the fourth quarter of 2005, which averaged $11.41. The Company's realized price is greater than industry averages as Storm generally produces higher heat content gas, which receives a premium price. For crude oil, the Edmonton par price averaged Cdn$69.04 per barrel for the quarter ended March 31, 2006, compared to Cdn$61.41 for the quarter ended March 31, 2005, an increase of 12%. The Edmonton par price averaged $71.12 for the quarter ended December 31, 2005. The above per unit realized prices do not include the benefit of a fixed price natural gas sales contract in place during the quarter ended March 31, 2006 which resulted in a gain of $1.15 per Mcf.



Production by Area - Boe per Day

------------------------------------------------------------------------
Three Three Three
Months Ended Months Ended Months Ended
March 31, March 31, December 31,
Period 2006 2005 2005
------------------------------------------------------------------------
Peace River Arch 2,803 1,833 2,532
------------------------------------------------------------------------
Cabin-Kotcho-Junior 671 462 693
------------------------------------------------------------------------
Red Earth 229 48 31
------------------------------------------------------------------------
Brazeau-Pembina 306 590 409
------------------------------------------------------------------------
Total 4,009 2,933 3,665
------------------------------------------------------------------------
------------------------------------------------------------------------


The above sets out the average production from each of the Company's core areas and the evolution of the Company's production base over the year to March 31, 2006.

Production Revenue



------------------------------------------------------------------------
Three Three Three
Months Ended Months Ended Months Ended
March 31, March 31, December 31,
Period 2006 2005 2005
------------------------------------------------------------------------
Natural gas $13,708,000 $8,791,000 $19,758,000
------------------------------------------------------------------------
Natural gas liquids 1,517,000 2,163,000 1,836,000
------------------------------------------------------------------------
Crude oil 2,473,000 1,743,000 1,934,000
------------------------------------------------------------------------
Gain on fixed price sales
contract 2,063,000 - -
------------------------------------------------------------------------
Revenue from product sales 19,761,000 12,697,000 23,528,000
------------------------------------------------------------------------
Royalty income 243,000 271,000 205,000
------------------------------------------------------------------------
Total Production Revenue $20,004,000 $12,968,000 $23,733,000
------------------------------------------------------------------------
------------------------------------------------------------------------


In the three months ended March 31, 2006, revenue from product sales before royalty income increased by 56% over the three months to March 31, 2005. Of this increase, volume increases represented 37%; price increases 3%; and hedging gains 16%.

Royalty income for each of the periods above is derived from ownership of overriding royalties, largely in the Peace River Arch.



ROYALTIES

------------------------------------------------------------------------
Three Three Three
Months Ended Months Ended Months Ended
March 31, March 31, December 31,
Period 2006 2005 2005
------------------------------------------------------------------------
Charge for period $4,305,000 $3,272,000 $6,395,000
------------------------------------------------------------------------
Royalties as a percentage
of revenue from product
sales before hedging gains
-Crown 22.0% 21.9% 23.3%
-Overriding 2.4% 3.6% 3.8%
------------------------------------------------------------------------
Total 24.4% 25.5% 27.1%
------------------------------------------------------------------------
------------------------------------------------------------------------
Per Boe $ 11.93 $ 12.39 $ 18.97
------------------------------------------------------------------------
------------------------------------------------------------------------


The increase in the total royalty charge is due to higher production volumes. The reduction in Crown royalty rate for the quarter ended March 31, 2006 in comparison to the quarter ended March 31, 2005, is attributable to royalty holidays on new wells.



PRODUCTION COSTS

------------------------------------------------------------------------
Three Three Three
Months Ended Months Ended Months Ended
March 31, March 31, December 31,
Period 2006 2005 2005
------------------------------------------------------------------------
Charge for period $2,717,000 $1,812,000 $2,576,000
------------------------------------------------------------------------
Percentage of production
revenue before hedging
gains 15.4% 14.3% 10.8%
------------------------------------------------------------------------
Per Boe $ 7.53 $ 6.86 $ 7.64
------------------------------------------------------------------------
------------------------------------------------------------------------


Total production costs for each period have increased due to growing product sales. In common with most producers, the Company has been faced with increasing per unit operating costs which resulted in higher charges in both the first quarter of 2006 and the final quarter of 2005. The increase in production costs as a percentage of revenue in the first quarter of 2006 compared to the final quarter of 2005 is attributable to lower per unit revenues realized in 2006.

Storm's cash costs which comprise operating, general and administrative costs, interest and large corporations tax, amounted to $9.96 for the first quarter of 2006 compared to $9.07 for the first quarter of 2005 and $10.97 for the final quarter of 2005.



TRANSPORTATION COSTS

------------------------------------------------------------------------
Three Three Three
Months Ended Months Ended Months Ended
March 31, March 31, December 31,
Period 2006 2005 2005
------------------------------------------------------------------------

Charge for period $773,000 $548,000 $756,000
------------------------------------------------------------------------
Percentage of production
revenue before hedging gains 4.4% 4.3% 3.2%
------------------------------------------------------------------------
Per Boe $ 2.14 $ 2.07 $ 2.24
------------------------------------------------------------------------
------------------------------------------------------------------------


Increased volumes have resulted in increases in total transportation costs, and, as a result of lower product prices, transportation costs also increased as a percentage of production revenue in the quarter ended March 31, 2006 when compared to the quarter ended December 31, 2005.



FIELD NETBACKS

Details of field netbacks per commodity unit are as follows:

------------------------------------------------------------------------
Period Quarter Ended March 31, 2006
------------------------------------------------------------------------
Natural
Crude Gas Natural
Oil Liquids Gas Total
($ Bbl) ($ Bbl) ($ Mcf) ($ Boe)
------------------------------------------------------------------------
Product sales $65.84 $64.24 $ 7.62 $49.05
------------------------------------------------------------------------
Royalty income 1.14 0.98 0.10 0.67
------------------------------------------------------------------------
Gain on fixed price sales contract - - 1.15 5.72
------------------------------------------------------------------------
Royalties (5.84) (17.60) (2.04) (11.93)
------------------------------------------------------------------------
Production costs (6.66) - (1.37) (7.53)
------------------------------------------------------------------------
Transportation (1.42) (1.64) (0.38) (2.14)
------------------------------------------------------------------------
Field netback $53.06 $45.98 $ 5.08 $33.85
------------------------------------------------------------------------
------------------------------------------------------------------------


------------------------------------------------------------------------
Period Quarter Ended March 31, 2005
------------------------------------------------------------------------
Natural
Crude Gas Natural
Oil Liquids Gas Total
($ Bbl) ($ Bbl) ($ Mcf) ($ Boe)
------------------------------------------------------------------------
Product sales $61.72 $64.80 $ 7.24 $48.09
------------------------------------------------------------------------
Royalty income 1.50 0.20 0.18 1.02
------------------------------------------------------------------------
Royalties (5.03) (24.73) (1.90) (12.39)
------------------------------------------------------------------------
Production costs (5.94) - (1.35) (6.86)
------------------------------------------------------------------------
Transportation (1.27) (1.28) (0.39) (2.07)
------------------------------------------------------------------------
Field netback $50.98 $38.99 $ 3.78 $27.79
------------------------------------------------------------------------
------------------------------------------------------------------------


------------------------------------------------------------------------
Period Quarter Ended December 31, 2005
------------------------------------------------------------------------
Natural
Crude Gas Natural
Oil Liquids Gas Total
($ Bbl) ($ Bbl) ($ Mcf) ($ Boe)
------------------------------------------------------------------------
Product sales $67.90 $66.80 $11.71 $69.78
------------------------------------------------------------------------
Royalty income 3.39 0.12 0.06 0.61
------------------------------------------------------------------------
Royalties (13.26) (25.10) (3.16) (18.97)
------------------------------------------------------------------------
Production costs (6.67) - (1.41) (7.64)
------------------------------------------------------------------------
Transportation (1.80) (1.91) (0.39) (2.24)
------------------------------------------------------------------------
Field netback $49.56 $39.91 $ 6.81 $41.54
------------------------------------------------------------------------
------------------------------------------------------------------------


Production costs for natural gas liquids are included with natural gas costs.

Average revenue per Boe increased marginally in the three months ended March 31, 2006 when compared to the quarter ended March 31, 2005. However in comparison to the three months ended December 31, 2005, average revenue per Boe for the first quarter of 2006 fell by 29%, consistent with the reduction in the average gas price for the quarter. Included in the field netback measurement for the three months ended March 31, 2006 is a gain from a fixed price natural gas sales contract totalling $5.72. Excluding this amount, field netbacks per Boe for the first quarters of both 2005 and 2006 were largely the same. However, average netback per Boe for the first quarter of 2006 was 19% less than average netback for the quarter ended December 31, 2005, again consistent with lower gas prices received in the first quarter of 2006.



INTEREST

------------------------------------------------------------------------
Three Three Three
Months Ended Months Ended Months Ended
March 31, March 31, December 31,
Period 2006 2005 2005

------------------------------------------------------------------------
Charge for period $238,000 $290,000 $240,000
------------------------------------------------------------------------
Per Boe $ 0.66 $ 1.10 $ 0.71
------------------------------------------------------------------------
------------------------------------------------------------------------


Interest is paid on the Company's revolving bank facility. Average bank debt for the first quarter of 2006 amounted to $25.3 million; the first quarter of 2005 to $24.7 million; and for the fourth quarter of 2005 to $24.2 million.



GENERAL AND ADMINISTRATIVE COSTS

Total costs:

------------------------------------------------------------------------
Three Three Three
Months Ended Months Ended Months Ended
March 31, March 31, December 31,
Period 2006 2005 2005
------------------------------------------------------------------------
Gross general and
administrative costs $1,302,000 $887,000 $1,319,000
------------------------------------------------------------------------
Capital and operating
recoveries (519,000) (499,000) (386,000)
------------------------------------------------------------------------
Net general and
administrative costs 783,000 388,000 933,000
------------------------------------------------------------------------
Stock based compensation
costs (144,000) (80,000) (98,000)
-----------------------------------------------------------------------
Cash general and
administrative costs $ 639,000 $308,000 $ 835,000
------------------------------------------------------------------------
------------------------------------------------------------------------


Costs per Boe:

------------------------------------------------------------------------
Three Three Three
Months Ended Months Ended Months Ended
March 31, March 31, December 31,
Period 2006 2005 2005
------------------------------------------------------------------------
Gross general and
administrative costs $3.53 $3.36 $3.92
------------------------------------------------------------------------
Capital and operating
recoveries (1.36) (1.89) (1.14)
------------------------------------------------------------------------
Net general and
administrative costs 2.17 1.47 2.78
------------------------------------------------------------------------
Stock based compensation costs (0.40) (0.30) (0.29)
------------------------------------------------------------------------
Cash general and
administrative costs per Boe $1.77 $1.17 $2.49
------------------------------------------------------------------------
------------------------------------------------------------------------


Gross general and administrative costs for the three months ended March 31, 2006 increased by 47% when compared to the three months ended March 31, 2005. Increases were primarily due to additions to staff, increased compensation levels in response to market conditions, and increased accommodation costs. Cash general and administrative costs per Boe for future quarters should be lower, due to higher capital and operating recoveries and an increased production base. Nevertheless, although Storm's general and administrative costs are low, the Company faces industry - wide pressures on many components of its cost structure.

The Company does not capitalize general and administrative or exploration overhead.



DEPLETION DEPRECIATION AND ACCRETION

------------------------------------------------------------------------
Three Three Three
Months Ended Months Ended Months Ended
March 31, March 31, December 31,
Period 2006 2005 2005
------------------------------------------------------------------------
Depletion and depreciation
charge for period $4,642,000 $3,519,000 $4,465,000
------------------------------------------------------------------------
Accretion charge for period 79,000 46,000 75,000
------------------------------------------------------------------------
Total $4,721,000 $3,565,000 $4,540,000
------------------------------------------------------------------------
Total per Boe $ 13.08 $ 13.50 $ 13.50
------------------------------------------------------------------------
------------------------------------------------------------------------


The increase in the total charge for depletion, depreciation and accretion for the quarter ended March 31, 2006 compared to amounts reported for prior quarters results from higher production volumes as the depletion component of the charge is based on a cost per Boe. The generally uniform charge per Boe indicates that the Company has been able to increase its reserve base during 2005 and into the first quarter of 2006 at a cost largely consistent with prior periods, in spite of industry wide increases in costs of equipment and services. Accretion represents the increase for the reporting period in the present value of the Company's asset retirement obligation which is discounted using an interest rate of 8%.

INCOME AND OTHER TAXES

At March 31, 2006, the Company had resource pools and operating tax losses carried forward estimated to be $145 million. In addition, the Company has a capital tax loss in the amount of $10 million available for application against future capital gains. Through application of operating losses carried forward, the expected provisions for future income taxes on the Company's income for the quarters ended March 31, 2005 and December 31, 2005 in the amounts of $1.2 million and $3.7 million respectively have been eliminated. However, in the quarter ended March 31, 2006, the Company has recorded a provision for future income taxes of $1.6 million, which indicates that the Company's inventory of accumulated tax losses upon commencement of oil and gas operations in July 2004 has been largely used up. Correspondingly, deferral of cash taxes into future periods will be subject to the amount and quality of the Company's resource pools. Nevertheless, subject to commodity pricing, the Company does not expect to pay cash taxes in 2006 and 2007.

NET INCOME AND NET INCOME PER SHARE

Net income for the quarter ended March 31, 2006 increased by 58% to $4.9 million or $0.12 per diluted share, when compared to the quarter ended March 31, 2005. However in comparison to the quarter ended December 31, 2005, income for the first quarter of 2006 was lower by $8.6 million or $0.21 per diluted share. Net income for the quarter December 31, 2005 included non recurring gains of $5.3 million or $0.13 per diluted share. The provision for future income taxes for the quarter ended March 31, 2006 amounted to $0.04 per diluted share. Excluding these amounts, net income for the first quarter of 2006 fell by $0.04 in comparison to the final quarter of 2006.

FUNDS FROM OPERATIONS

Funds from operations increased by 69% to $11.3 million for the three months ended March 31, 2006, or $0.28 per diluted share, compared to $6.7 million, or $0.17 per diluted share, for the three months to March 31, 2005. In comparison the three months ended December 31, 2005, funds from operations for the first quarter of 2006 fell by $1.6 million or $0.04 per diluted share.
The reduction in cash flow is directly attributable to the 35% fall in average natural gas prices in the first quarter of 2006 when compared to the final quarter of 2005.

INVESTMENT AND FINANCING

Working Capital

Receivables comprise production revenue receivables, receivables in respect of operating and capital costs and net receivables in respect of cash calls issued to partners regarding capital projects. Prepaid costs include unamortized insurance premiums, unamortized bank commitment fees and deposits.

Accounts payable include operating, administrative and capital costs payable. Estimates of amounts owing but not yet invoiced to the Company have been included in accounts payable.

The Company had a working capital deficiency of $11.5 million at March 31, 2006 compared to $12.1 million at March 31, 2005 and $7.7 million at December 31, 2005. The increase in the working capital deficiency at March 31, 2006 when compared to December 31, 2005 is due to the seasonal expansion in the scale of the Company's operations. The Company's working capital deficiency is normally highest at the end of the first quarter each year as a result of higher activity levels in winter months.



Property and Equipment

Capital costs incurred were as follows:

------------------------------------------------------------------------
Three Three Three
Months Ended Months Ended Months Ended
March 31, March 31, December 31,
Period 2006 2005 2005
------------------------------------------------------------------------
Land and lease $ 1,761,000 $ 404,000 $ 1,197,000
------------------------------------------------------------------------
Seismic 3,104,000 953,000 397,000
------------------------------------------------------------------------
Drilling and completions 7,816,000 3,691,000 9,683,000
------------------------------------------------------------------------
Facilities and equipment 5,879,000 8,163,000 1,375,000
------------------------------------------------------------------------
Property acquisitions - - 2,974,000
------------------------------------------------------------------------
Property dispositions (2,879,000) (2,872,000) (329,000)
------------------------------------------------------------------------
Total $15,681,000 $10,339,000 $15,297,000
------------------------------------------------------------------------
------------------------------------------------------------------------


Bank Debt, Liquidity and Capital Resources

The Company has a revolving borrowing base bank credit facility of $55 million. The amount drawn on this facility at March 31, 2006 amounted to $24.5 million. Debt including working capital deficiency at March 31, 2006 amounted to $36.1 million, resulting in a debt to annualized quarterly cash flow of 0.8:1.0.

The Company funds its field capital programs through cash flow and bank borrowings. Acquisitions are funded by a combination of debt and, if required, equity. Field capital programs tend to be concentrated in the winter months, with the result that capital expenditures in the first and fourth quarters of the year will exceed cash flow, which is compensated by lower capital expenditures in the second and third quarters. In quarters of high field activity, the Company operates with a substantial working capital deficit, which is paid down in quarters of lower field activity.

Investment

At March 31, 2006 the Company's investment in Storm Ventures International Inc. ("SVI") represented a 16% ownership position. The carrying amount of the investment on the Company's balance sheet represents the transfer value of the investment in SVI to the Company under a Plan of Arrangement completed effective July 2004, a subsequent investment, plus the dilution gain accruing to Storm as a result of a private placement by SVI during 2005. This carrying amount should not be regarded as representative of the value of Storm's investment in SVI. Late in 2005, SVI completed a well in the Ghadames basin in southern Tunisia. Hydrocarbons were encountered but not in commercial volumes, although the well confirmed the extension over much of SVI's permit area of an existing producing zone. Additional prospects have been identified in the Ghadames basin and other opportunities are being evaluated in southern Tunisia and in SVI's offshore block in northeast Tunisia. In addition, a UK based affiliate of SVI, as operator, has recently drilled an offshore well in the Viking Fields area in the southern North Sea. The well encountered a new gas accumulation and is currently being evaluated.

Storm has no financing or other obligations to SVI, although certain administrative services are provided on a fee basis.

Future Income Taxes

The future income tax asset is made up of the excess of the accounting amounts over the related tax bases of property and equipment transferred to the Company under the Plan, less the tax value of share issue costs and the provision for future income taxes for the first quarter of 2006.



Details of the Company's tax assets are as follows:

------------------------------------------------------------------------
As at Maximum
March 31, Annual
2006 deduction
------------------------------------------------------------------------
Canadian oil and gas property expense $ 72,310,000 10%
------------------------------------------------------------------------
Canadian development expense 18,685,000 30%
------------------------------------------------------------------------
Canadian exploration expense 6,983,000 100%
------------------------------------------------------------------------
Undepreciated capital cost 38,234,000 20 - 100%
------------------------------------------------------------------------
Total $136,212,000
------------------------------------------------------------------------
------------------------------------------------------------------------
Operating losses $ 8,852,000
------------------------------------------------------------------------
------------------------------------------------------------------------
Capital losses $ 10,508,000
------------------------------------------------------------------------
------------------------------------------------------------------------


Asset Retirement Obligation

The Company's asset retirement obligation represents the present value of estimated future costs to be incurred to abandon and reclaim the Company's wells and facilities. Changes in amount of the obligation between March 31, 2006 and December 31, 2005 comprise the present value of additional obligations accruing to the Company as a result of field activity during the quarter ended March 31, 2006, less costs paid in settlement of abandonment obligations, plus the quarter-by-quarter increase in the present value of the obligation. The discount rate used to establish the present value is 8%. Future costs to abandon and reclaim the Company's properties are based on an evaluation conducted by an external environmental consulting firm.



Share Capital

Details of outstanding share capital and dilutive elements:

------------------------------------------------------------------------
March 31, December 31,
As at 2006 2005
------------------------------------------------------------------------
Common shares outstanding
- end of period 39,942,000 39,184,000
------------------------------------------------------------------------
Share purchase warrants 957,000 1,715,000
------------------------------------------------------------------------
Performance warrants 231,000 240,000
------------------------------------------------------------------------
Stock options 923,000 873,000
------------------------------------------------------------------------
Fully diluted common shares
- end of period 42,053,000 42,012,000
------------------------------------------------------------------------
------------------------------------------------------------------------


Share purchase warrants are exercisable at a price of $2.00 on or before June 30, 2006. Outstanding performances warrants total 341,325 and are convertible into common shares using a formula based on the market price on the date of conversion. Stock options outstanding are exercisable over five years on various dates beginning September 2005 at prices ranging from $2.60 to $6.70.



QUARTERLY RESULTS

Set out below are summarized results by quarter for the Company since
oil and gas operations began in July 2004:

------------------------------------------------------------------------
March 31, December 31, September 30, June 30,
Quarter Ended 2006 2005 2005 2005
------------------------------------------------------------------------
Production revenue -
($000s) 20,004 23,733 17,694 15,951
------------------------------------------------------------------------
Funds from operations -
($000s) 11,310 12,866 10,317 8,701
Per share
- basic $0.29 $0.33 $0.27 $0.21
- diluted $0.28 $0.32 $0.25 $0.20
------------------------------------------------------------------------
Net income - ($000s) 4,861 13,507 6,310 3,643
Per share
- basic $0.12 $0.35 $0.16 $0.09
- diluted $0.12 $0.33 $0.15 $0.09
------------------------------------------------------------------------
Average daily production
- Boe 4,009 3,665 3,208 3,481
------------------------------------------------------------------------
Average field netback
per Boe $33.85 $41.54 $37.22 $27.50
------------------------------------------------------------------------
Capital expenditures
- net - $'000 15,681 15,297 12,680 4,261
------------------------------------------------------------------------
------------------------------------------------------------------------


------------------------------------------------------------------------
March 31, December 31, September 30,
Quarter Ended 2005 2004 2004
------------------------------------------------------------------------
Production revenue - ($000s) 12,968 7,405 4,009
------------------------------------------------------------------------
Funds from operations - ($000s) 6,718 3,453 1,661
Per share
- basic $0.17 $0.10 $0.05
- diluted $0.17 $0.09 $0.05
------------------------------------------------------------------------
Net income - ($000s) 3,073 5,586 911
Per share
- basic $0.08 $0.16 $0.03
- diluted $0.08 $0.16 $0.02
------------------------------------------------------------------------
Average daily production - Boe 2,933 1,727 1,005
------------------------------------------------------------------------
Average field netback per Boe $27.79 $24.45 $22.56
------------------------------------------------------------------------
Capital expenditures - net - $'000 10,339 47,882 9,668
------------------------------------------------------------------------
------------------------------------------------------------------------


CONTRACTUAL OBLIGATIONS

In the course of its business the Company enters into various contractual obligations, including the following:

- purchase of services

- royalty agreements

- operating agreements

- processing agreements

- right of way agreements

- lease obligations for accommodation, office equipment and automotive equipment.

All such contractual obligations reflect market conditions at the time of contract and none are with related parties.

Obligations with a fixed term are as follows:



------------------------------------------------------------------------
$(000's) 2006 2007 2008 2009
------------------------------------------------------------------------
Lease of premises 340 343 352 352
------------------------------------------------------------------------
Equipment leases 28 11 - -
------------------------------------------------------------------------
Total 368 354 352 352
------------------------------------------------------------------------
------------------------------------------------------------------------


CRITICAL ACCOUNTING ESTIMATES

Financial amounts included in the Company's Management's Discussion and Analysis and in the unaudited financial statements for the three months ended March 31, 2006 are based on accounting policies, estimates and judgement which reflect information available to management at the time of preparation. Information with respect to the accounting policies selected by the Company and its use of estimates is set out in the Company's annual report for the year ended December 31, 2005.

RISK ASSESSMENT

There are a number of risks facing participants in the Canadian oil and gas industry. Some of the risks are common to all businesses while others are specific to the sector and others are specific to Storm. Information with respect to such risks is set out in the Company's annual report for the year ended December 31, 2005.

ADDITIONAL INFORMATION

Additional information relating to the Company can be viewed at or on the Company's website at www.stormexploration.com. Information can also be obtained by contacting the Company at Storm Exploration Inc., 3250, 205 - 5th Avenue, SW, Calgary, Alberta, T2P 2V7.



Storm Exploration Inc.
Balance Sheets

Unaudited
March 31, 2006 December 31, 2005
-------------------------------------

ASSETS

Current
Accounts receivable $ 10,041,000 $ 12,683,000
Prepaid expenses 1,561,000 1,012,000
-------------------------------------
11,602,000 13,695,000

Property and Equipment
- Net (Note 2) 127,405,000 116,051,000

Investments 8,275,000 8,275,000

Future Income Taxes (Note 3) 7,384,000 8,968,000
-------------------------------------
$ 154,666,000 $ 146,989,000
-------------------------------------
-------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current
Accounts payable and accrued
liabilities $ 23,167,000 $ 21,420,000
-------------------------------------
23,167,000 21,420,000

Bank Indebtedness (Note 4) 24,538,000 25,523,000
Asset Retirement Obligation
(Note 5) 4,195,000 3,801,000
-------------------------------------
51,900,000 50,744,000
-------------------------------------

Shareholders' Equity (Note 6)
Share capital 64,278,000 62,762,000
Contributed surplus 598,000 454,000
Retained earnings 37,890,000 33,029,000
-------------------------------------
102,766,000 96,245,000
-------------------------------------
$ 154,666,000 $ 146,989,000
-------------------------------------
-------------------------------------


Storm Exploration Inc.
Statements of Income and Retained Earnings
Unaudited

Three Months Ended Three Months Ended
March 31, 2006 March 31, 2005
----------------------------------------
----------------------------------------
Revenue
Production revenue 20,004,000 12,968,000
Royalties (4,305,000) (3,272,000)
-------------------------------------
15,699,000 9,696,000
-------------------------------------

Expenses
Production 2,717,000 1,812,000
Transportation 773,000 548,000
Interest 238,000 290,000
General and administrative 783,000 388,000
Depletion, depreciation and
accretion 4,721,000 3,565,000
-------------------------------------
9,232,000 6,603,000
-------------------------------------

Income before the following: 6,467,000 3,093,000

Income and other taxes (Note 3)
Future income taxes (1,584,000) -
Capital taxes (22,000) (20,000)
-------------------------------------
(1,606,000) (20,000)
-------------------------------------

Net income for the period 4,861,000 3,073,000

Retained earnings, beginning
of period 33,029,000 6,496,000

-------------------------------------
Retained earnings, end of period 37,890,000 9,569,000
-------------------------------------
-------------------------------------

Net Income per share (Note 7)
- basic 0.12 0.08
- diluted 0.12 0.08


Storm Exploration Inc.
Statements of Cash Flows
Unaudited

Three Months Ended Three Months Ended
March 31, 2006 March 31, 2005
----------------------------------------
----------------------------------------

Operating activities
Net income for the period 4,861,000 3,073,000
Add non-cash items:
Depletion, depreciation and
accretion 4,721,000 3,565,000
Future income tax 1,584,000 -
Stock based compensation 144,000 80,000
----------------------------------------
Funds from operations 11,310,000 6,718,000
Net change in non-cash working
capital items 104,000 2,959,000
----------------------------------------
11,414,000 9,677,000
----------------------------------------

Financing activities
Issue of common shares
- net of expenses 1,516,000 -
Decrease in bank indebtedness (985,000) (2,898,000)
----------------------------------------
531,000 (2,898,000)
----------------------------------------

Investing activities
Additions to property and
equipment (18,560,000) (13,211,000)
Disposals of property and
equipment 2,879,000 2,872,000
Net change in non-cash working
capital items 3,736,000 3,560,000
----------------------------------------
(11,945,000) (6,779,000)
----------------------------------------

Change in cash during the period - -

Cash, beginning of period - -
----------------------------------------

Cash, end of period - -
----------------------------------------
----------------------------------------


STORM EXPLORATION INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH, 2006
(UNAUDITED)


1. SIGNIFICANT ACCOUNTING POLICIES

These interim unaudited financial statements of the Company have been prepared by management in accordance with accounting policies generally accepted in Canada, following the same accounting policies and methods of computation as those in the financial statements for the year ended December 31, 2005. The interim financial statement note disclosures do not include all of those disclosures applicable for annual financial statements. Accordingly, the interim financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Company's annual report for the year ended December 31, 2005.



2. PROPERTY AND EQUIPMENT

March 31, 2006 December 31, 2005
------------------------------------
Petroleum and natural gas
properties $150,549,000 $134,567,000
Furniture and equipment 364,000 350,000
------------------------------------
150,913,000 134,917,000
Accumulated depletion and
depreciation (23,508,000) (18,866,000)
------------------------------------
$127,405,000 $116,051,000
------------------------------------
------------------------------------


At March 31, 2006, the depletion calculation excluded unproved properties of $12,547,000 (December 31, 2005 - $12,207,000).

3. FUTURE INCOME TAXES

The future income tax asset is made up of the excess of the accounting amounts over the related tax bases of property and equipment of the Company, less the effect of tax deductions associated with share issue costs.

The Company has tax pools associated with property and equipment and operating tax losses (which generally expire in the period 2008 to 2011) of approximately $145 million as well as capital losses of approximately $10 million, which are not subject to expiry.

The provision for future income taxes is different from the amount computed by applying the combined statutory Canadian federal and provincial tax rates to pre-tax income for the period.



The differences are as follows:

March 31, 2006 March 31, 2005
------------------------------------

Statutory combined federal and
provincial income tax rate 35.31% 38.26%

Expected income taxes $2,284,000 $1,176,000
Add (deduct) the income tax effect of:
Non-deductible crown charges 476,000 698,000
Resource allowance (409,000) (624,000)
Benefit of losses not previously
recognized (695,000) (1,382,000)
Other (72,000) 132,000
------------------------------------
Future Income Tax 1,584,000 -

Large corporations tax 22,000 20,000
------------------------------------
$1,606,000 $ 20,000
------------------------------------
------------------------------------


4. BANK INDEBTEDNESS

The Company has an extendible revolving bank facility in the amount of $55,000,000 (December 31, 2005 - $37,000,000), based on the Company's producing reserves. The revolving facility is available to the Company until May 31, 2007, but may be extended at the Company's request until May 30, 2008, subject to the bank's review of the Company's reserve lending base. If the revolving facility is not renewed at the end of the current revolving phase, the facility moves into a term phase whereby the loan is to be retired with one payment on the 366th day following the last day of the revolving phase, in an amount equal to the outstanding principal. Interest is payable on the revolving facility at bank prime rate or banker's acceptance rates plus a stamping fee. Security comprises a floating charge demand debenture on the assets of the Company. Interest paid on the revolving facility in the period to March 31, 2006 amounted to $238,000 (2005-$290,000).

5. ASSET RETIREMENT OBLIGATION

The estimated future asset retirement obligation is based on the Company's net ownership interest in wells and facilities, the estimated costs to abandon and reclaim the wells and facilities and the estimated timing of the costs to be incurred in future periods. The total undiscounted amount of the estimated cash flows required to settle the Company's asset retirement obligations is approximately $8.1 million (December 31, 2005 - $7.3 million), which is to be incurred over the next 15 years, with the majority of costs incurred between 2015 and 2020. A credit adjusted risk-free rate of eight percent was used to calculate the present value of the asset retirement obligations, amounting to $4,195,000 (December 31, 2005 - $3,801,000).



6. SHARE CAPITAL

Authorized

An unlimited number of non-voting common shares
An unlimited number of voting common shares
An unlimited number of preferred shares

Except for voting rights, non-voting and voting common shares are
identical.


Issued

Number of Shares Consideration
--------------------------------------

Balance as at December 31, 2005 39,184,000 $ 62,762,000

Common shares issued on
exercise of warrants 758,000 1,516,000
--------------------------------------
Balance as at March 31, 2006 39,942,000 $ 64,278,000
--------------------------------------
--------------------------------------


Common Share Issues


During the first quarter of 2006, 758,000 warrants were exercised and 758,000 common shares were issued for proceeds of $1,516,000 based on the exercise price of $2.00 per share.

Warrants

As part of a June 29, 2004 private placement of common shares, the Company issued warrants to acquire 2,100,000 common shares at a price of $2.00. A total of 957,000 (December 31, 2005 - 1,715,000) warrants are outstanding and are exercisable during the period from March 31, 2006 to June 30, 2006.

Stock Based Compensation Plans

(i) The Company has a performance warrant plan under which 512,500 warrants have been issued to employees to acquire common shares. The number of common shares issuable upon exercise of the warrants is the number of warrants held, multiplied by that percentage of a common share represented by the closing price of the share on the day immediately preceding the exercise date, less $2.00, divided by the closing price. The warrants are exercisable in three equal annual amounts commencing June 29, 2005. On June 29, 2005, 170,833 warrants were exercised resulting in 341,667 warrants outstanding as at March 31, 2006.

Using the Black-Scholes pricing model, the fair value of each warrant was estimated to be $0.51 using a risk-free interest rate of 4.25%, volatility of 40% and an expected average life of two years. The cost of the warrant thus determined is amortized over its expected life, the expense being included in general and administrative costs with an equivalent allocation to contributed surplus.

(ii) The Company has a stock option plan under which it may grant, at the Company's discretion, options to purchase common shares to directors, officers and employees. Under the stock option plan a total of 1,450,000 common shares has been reserved for issuance. Options to purchase 923,000 common shares issued to directors and employees of the Company were outstanding at the end of the period as follows:



Outstanding at December 31, 2005 873,000

Issued during first quarter of 2006 50,000

-----------------
Outstanding at March 31, 2006 923,000
-----------------
Weighted average exercise price $4.35
Average remaining life at March 31, 2006 4.14 years
Number exercisable at March 31, 2006 73,400
Option prices $2.60 - $ 6.70


Using the Black-Scholes pricing model, the weighted average fair value of the options granted in 2005 was estimated to be $1.48 (2004 - $0.93), using risk-free interest rates of 4.25% - 5.00%, volatility of 40% and an expected average life of 30 months. The amortized cost of the options is included in general and administrative costs with an equivalent allocation to contributed surplus.



7. PER SHARE AMOUNTS


Three Months ended Three Months ended
March 31, 2006 March 31, 2005
------------------------------------------

Basic

Net income per share $ 0.12 $ 0.08
Weighted average number of
shares outstanding ('000) 39,254 38,673

Diluted

Net income per share $ 0.12 $ 0.08
Weighted average number of
shares outstanding ('000) 41,074 39,983



The reconciling items between the basic and diluted average common
shares are the warrants, performance warrants and stock options
described in Note 6.

8. SUPPLEMENTAL CASH FLOW INFORMATION

Changes in non-cash working capital



Three Months ended Three Months ended
March 31, 2006 March 31, 2005
------------------------------------------

Accounts receivable $ 2,641,000 $ 461,000
Prepaid expenses (550,000) (56,000)
Accounts payable and
accrued liabilities 1,749,000 6,114,000
------------------------------------------
Change in non-cash working
capital $ 3,840,000 $ 6,519,000
------------------------------------------
------------------------------------------

Relating to:

Financing activities $ - $ -
Investing activities 3,736,000 3,560,000
Operating activities 104,000 2,959,000
------------------------------------------
$ 3,840,000 $ 6,519,000
------------------------------------------
------------------------------------------



Three Months ended Three Months ended
March 31, 2006 March 31, 2005
------------------------------------------
Income taxes paid during
the period $ - $ -
------------------------------------------
------------------------------------------


9. FINANCIAL INSTRUMENTS

The Company's financial instruments recognized on the balance sheet consist of cash and short-term investments, accounts receivable, accounts payable and accrued liabilities. The fair value of these financial instruments approximates their carrying amounts based on the short term to maturity.

A substantial portion of the Company's accounts receivable are concentrated with a limited number of purchasers of commodities and joint venture partners in the oil and gas industry and are subject to normal industry credit risk. Management considers these concentrations of credit risk to be minimal, as commodity purchasers are major industry participants, and receivables from partners are protected by effective industry standard legal remedies.





Contact Information

  • Storm Exploration Inc.
    Brian Lavergne
    President and Chief Executive Officer
    (403) 264-3520
    or
    Storm Exploration Inc.
    3250, 205 - 5th Avenue, SW
    Calgary, Alberta, T2P 2V7
    Website: www.stormexploration.com