Zapata Energy Corporation
TSX VENTURE : ZCO

Zapata Energy Corporation

November 26, 2008 09:00 ET

Zapata Announces Third Quarter Results-Achieved $10.1 Million Cash Flow in Q3

CALGARY, ALBERTA--(Marketwire - Nov. 26, 2008) - Zapata Energy Corporation (TSX VENTURE:ZCO) is pleased to report its financial and operational results for the third quarter and nine months ended September 30, 2008. The Corporation's financial performance reached all time highs during the period and has resulted in record quarterly profits and cash flow and increased production. Highlights of the period are summarized as follows:

- Record cash flow of $10.1 million ($0.59/share) for the third quarter of 2008

- Record cash flow of $26.3 million ($1.54/share) for the first three quarters of 2008

- Record net income of $5.6 million ($0.33/share) for the third quarter of 2008

- Record net income of $8.2 million ($0.48/share) for the first three quarters of 2008

- Average daily production of 3,052 up 11% from 2,757 boe/d in second quarter of 2008

- Significant drilling continuing in fourth quarter of 2008



---------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
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2008 2007 Change 2008 2007 Change
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FINANCIAL
(Thousands
unless
otherwise
noted)
Gross revenue $ 21,282 $ 13,266 60% $ 55,202 $ 40,747 35%
---------------------------------------------------------------------------
Cash flow from
operations 10,081 5,186 94% 26,350 15,488 70%
Per share
(basic) 0.59 0.30 98% 1.54 0.89 73%
Per share
(diluted) 0.58 0.30 97% 1.53 0.88 74%
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Net income 5,649 47 11,907% 8,182 1,356 503%
Per share
(basic) 0.33 0.00 12,148% 0.48 0.08 513%
Per share
(diluted) 0.33 0.00 12,097% 0.47 0.08 516%
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Capital
expenditures 8,669 3,697 134% 23,845 11,440 108%
Bank debt 36,500 38,350 (5%) 36,500 38,350 (5%)
Bank debt and
working capital
deficit 42,053 42,077 - 42,053 42,077 -
---------------------------------------------------------------------------
Shares
outstanding
(weighted
average)
Basic 17,049 17,391 (2%) 17,134 17,406 (2%)
Diluted 17,251 17,523 (2%) 17,246 17,606 (2%)
---------------------------------------------------------------------------
OPERATIONAL
Natural gas
sales (mcf/d) 9,932 8,363 19% 9,049 9,298 (3%)
Average sales
price ($/mcf) 7.79 6.67 17% 8.36 7.23 16%
Field netback
($/mcf) 3.30 2.69 23% 4.26 3.02 41%
---------------------------------------------------------------------------
Oil sales
(bbls/d) 1,099 1,228 (11%) 1,117 1,253 (11%)
Average sales
price ($/bbl) 103.12 63.49 62% 91.62 57.15 60%
Field netback
($/bbl) 57.04 34.41 66% 50.37 30.39 66%
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NGL sales
(bbls/d) 297 176 68% 216 184 17%
Average sales
price ($/bbl) 125.97 59.32 112% 103.54 56.21 84%
Field netback
($/bbl) 90.78 40.53 124% 76.41 38.71 97%
---------------------------------------------------------------------------
Total sales
(boe/d 6:1) 3,052 2,798 9% 2,841 2,987 (5%)
Average sales
price ($/boe) 75.81 51.53 47% 70.90 49.96 42%
Field netback
($/boe) 41.16 25.69 60% 39.55 24.55 61%
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Zapata has filed its 2008 Third Quarter Report, comprised of the Management's Discussion and Analysis ("MD&A") and financial statements for the three and nine months ended September 30, 2008 with the securities commissions. These reports can be viewed and downloaded from www.sedar.com and the Corporation's website www.zapata.ca.

Driven by high commodity prices and higher production, Zapata's revenues, cash flow from operations and net income were all at their highest levels ever in the third quarter of 2008. These results were achieved in spite of the world wide slow down that started part way through the third quarter.

Production averaged 3,052 boe/d in the third quarter, nine percent higher than the 2,798 boe/d achieved in 2007 and up 11 percent from the 2,757 boe/d in the second quarter of 2008.

In the third quarter of 2008, Zapata drilled nine (8.0 net) wells resulting in three (3.0 net) oil wells, four (3.0 net) gas wells, one net injection well and one net abandonment.

On November 10, 2008 Zapata Energy Corporation announced that it had received a license to drill its deep 4100m exploratory well. The well was spudded on November 22, 2008. Drilling is expected to take 45 to 60 days. This well has the potential to add significant reserves.

The Corporation has drilled three (2.5 net) oil wells in the fourth quarter, completed a 3D seismic survey in SE Alberta and is continuing its waterflood project in the Provost area.

Zapata is a junior oil and gas production company operating in western Canada and trades on the TSX Venture Exchange under the symbol "ZCO."

This press release may include forward-looking statements which are statements other than of historical fact, such as information regarding drilling potential and production forecasts. Factors that could cause actual results to differ materially from our expectations include exploration and development risks, commodity prices and operating hazards. A barrel of oil equivalent (boe), derived by converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil, may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.

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