Admiral Bay Resources Inc.

Admiral Bay Resources Inc.

April 05, 2007 14:10 ET

Admiral Bay 2nd Quarter Financial Results-Revenue Increases by 74% Over Previous Quarter

CENTENNIAL, COLORADO--(CCNMatthews - April 5, 2007) - Admiral Bay Resources Inc. (TSX VENTURE:ADB) is pleased to announce results from operations for its most recently completed quarter ending January 31, 2007. Production and revenue continues to increase as new wells are connected to the pipeline and the dewatering process continues at the Company's projects in the Cherokee Basin in southeast Kansas.

Select operational and financial results in US dollars are outlined below and should be read in conjunction with the Company's unaudited interim consolidated financial statements and related MD&A which can be found on the company's website ( or on SEDAR (

During the period the Company reported gross revenue of $972,960 an increase of 74.8% over the previous quarter and an increase of 117% over Q2 in 2006. This was due to an 45.5% increase in production over Q1 and a 20% average commodity price increase in the quarter. Revenue for the first two quarters of 2007 was $1,529,635 an increase of 59.0% over the first two quarters of 2006. Operating expenses and G&A on a per unit basis will continue to decline as production volumes increase.

The table below summarizes some the financial and operational highlights
for the quarter.

Growth Growth
Q2 Q1 over Q2 over Q2
2007 2007 Q1 2006 2006
-------- ------- -------- -------- --------
Gross Revenue (1)
Total Gas & Oil Revenue 972,960 $556,675 74.8% $448,418 117%

Sales Volumes (1)
Natural Gas
Equivalents (Mcfe) 157,403 108,199 45.5% 50,873 209%

Daily Sales Volumes (1)
Natural Gas
Equivalents (Mcfe) 1,711 1,176 45.5% 553 209%

Realized Commodity Prices
Natural Gas (US$/Mcf) $6.18 $5.14 $8.81

(1) before royalties

"The results from this quarter demonstrate that the programs Management has instituted regarding development and well optimization are showing a very positive trend", commented Steve Tedesco, President and CEO. "Although we are not at the level of total production we thought we would be entering 2007, due to delays in getting new wells online, the level of production coming from wells currently connected to the pipeline is in line with our projections. Our near term challenge is to get the remaining wells drilled from our 2006 Development Program on line as quickly as possible. With the recent increases in production, we are now approaching a level of revenue that will cover our LOE, G&A and interest expense".

The Company had a net loss during the second quarter and first half of 2007 of $1,509,000 or $0.02 per share and $2,846,485 or $0.04 per share respectively compared to a net loss of $1,437,719 or $0.02 per share and $3,070,986 or $0.06 per share during the comparable periods of 2006. Revenues were $972,960 and $1,529,635 during the second quarter and first half of 2007 respectively compared to $448,418 and $961,936 during the comparable periods of 2006 due to higher production volumes.

Consolidated Statements of Operations

(Unaudited) Six month ended Three months ended
January 31 January 31
2007 2006 2007 2006
------ ------ ------ ------
($) ($) ($) ($)
Oil and gas sales 1,529,635 961,936 972,960 448,418
Royalties (240,242) (160,323) (153,268) (68,912)
Pipeline and gathering fees 32,754 -- 14,896 --
1,322,147 801,613 834,588 379,506

Lease operating expenses 953,410 1,452,860 618,792 471,390
Amortization of oil and
gas properties 389,215 168,542 232,446 132,766
1,342,652 1,621,402 851,238 604,156

Loss from operation (20,478) (819,789) (16,650) (224,650)

General and administrative 1,292,967 1,216,651 653,080 604,121
Property abandonment expense -- 61,723 -- --
Stock based compensation 304,386 623,220 (82,128) 619,847
1,597,353 1,901,594 570,952 1,223,968

Net loss from operations (1,617,831) (2,721,383) (587,602) (1,448,618)

Admiral Bay Resources Inc. ( is an emerging unconventional gas production company focused on the development of projects in the Cherokee Basin in southeast Kansas and the Appalachian Basin in Pennsylvania. Admiral Bay is listed on the TSX Venture Exchange under the symbol ADB.

Statements in this release that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned that any such statements are not guarantees of future performance and that actual developments or results may vary materially from those in these "forward-looking statements".

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

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