Birchcliff Energy Ltd.

Birchcliff Energy Ltd.

July 05, 2005 06:00 ET

Birchcliff More Than Doubles 2005 Capital Budget to CDN $33 Million

CALGARY, ALBERTA--(CCNMatthews - July 5, 2005) -

This press release is not for distribution to United States Newswire Services or for dissemination in the United States.

Birchcliff Energy Ltd. ("Birchcliff") (TSX Venture:BIR) is pleased to announce that it has increased its 2005 capital budget from $14 million to $33 million. The capital program is allocated as follows:

Drilling, completions and tie-ins $22.5 million
Land & Seismic $8.0 million
Miscellaneous Capital $2.5 million

Currently, Birchcliff estimates that in 2005 it will drill or participate in at least 34 gross wells (22 net). The wells have multi-zone potential and are targeted as follows:

1. 12% are expected to be shallow wells (up to 600 meters) with the primary zones of interest in the Dunvegan and Notikewin.

2. 36% of the wells are expected to be medium depth wells (up to 1,600 meters) with the primary zones of interest in the Bluesky, Gething, Cadomin, Baldonnel and Boundary Lake.

3. 52% of the wells are expected to be deeper tests (up to 2,400 meters) with the primary zones of interest in the Halfway, Doig, Montney and Kiskatinaw.

Birchcliff expects to operate 24 of the 34 wells (approximately 80%). All of the wells are in the Peace River Arch Area of Alberta, the majority of which are targeted for natural gas.

The 2005 capital expenditure program will be funded out of cash flow and Birchcliff's credit facilities.

The increased capital budget provides significant momentum for 2006. With drilling success, there are numerous follow-up drilling locations for 2006 and 2007.

The production results of the increased capital program will not be realized until 2006 and accordingly, Birchcliff continues to expect its 2005 exit production rate to be approximately 4,500 to 5,000 boe per day.

Birchcliff is enthusiastic about its prospects and growing list of opportunities including its drilling inventory of organic development and exploration prospects, which grows on a daily basis. Birchcliff is also committed to its strategy of continuing to add to its land base, to build its infrastructure and where possible add to and consolidate its working interests.

Birchcliff continues to remain clearly focused in the Peace River Arch. All of the cash flow generated from our properties is reinvested in those same Peace River Arch areas.

The term barrels of oil equivalent ("boe") may be misleading, particularly used in isolation. Per barrel of oil equivalent ("boe") amounts have been calculated using conversion rate of six thousand cubic feet of natural gas to one barrel of oil ("6:1"). A boe conversion ratio of 6:1 is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Birchcliff is a publicly traded company that trades on the TSX Venture Exchange under the symbol "BIR".

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

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