Birchcliff Energy Ltd.
TSX : BIR

Birchcliff Energy Ltd.

August 26, 2005 09:00 ET

Birchcliff Reports Second Quarter Results

CALGARY, ALBERTA--(CCNMatthews - Aug. 26, 2005) -

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

Birchcliff Energy Ltd. (TSX:BIR) ("Birchcliff") announced today that it has mailed and filed its 2005 Second Quarter Report and it is now available at www.birchcliffenergy.com and at www.sedar.com.

Second Quarter Highlights:

- Birchcliff closed its $243.5 million Peace River Arch acquisition on May 31, 2005

- Average production for the month of June was 4,341 boe/d.

- Cash flow for the month of June was $3.5 million.

- Operating netback for the month of June was $29.13/boe.

- Achieved successful recompletion and reactivation results which increases confidence in the upcoming drilling program.

Current Update:

- Current production is approximately 4,400 boe/d with at least 300 boe/d behind pipe and expected to be on stream in 60 days.

- Commenced drilling operations with two rigs in mid-August.

- Birchcliff has increased its undeveloped land base to 148,000 gross (103,000 net) acres - all in the Peace River Arch area.

- Increased 2005 Capital Spending Program from $14 million to $33 million.

- Birchcliff moved on July 21, 2005 from the TSX Venture Exchange to the Toronto Stock Exchange.

Details of the Financial and Operational data for the periods ending June 30, 2005 are set forth below. It is important to note that only one month of production and revenue (for the month of June) from the Peace River Arch assets is included in this data.



FINANCIAL AND OPERATIONAL DATA

Month of 3 months ended 6 months ended
June, 2005 June 30, 2005 June 30, 2005
------------------------------------------------------------------------

OPERATING
Daily Average Production
Light Oil - barrels 753 248 125
Natural Gas - thousands
of cubic feet 20,681 6,966 3,502
NGLs - barrels 141 51 26
Total - barrels of oil
equivalent (6:1) 4,341 1,460 734
------------------------------------------------------------------------
Average Sales Price
($ Canadian)
Oil - per barrel 67.05 67.05 67.05
Natural Gas - per thousand
cubic feet 7.71 7.69 7.69
NGLs - per barrel 63.29 59.58 59.58
Total - per barrel of
oil equivalent (6:1) 50.42 50.15 50.15
------------------------------------------------------------------------
Undeveloped Land
Gross (acres) 140,623 140,623 140,623
Net (acres) 96,181 96,181 96,181
------------------------------------------------------------------------
------------------------------------------------------------------------

NETBACK AND COST
($ per barrel of oil
equivalent at 6:1)
Petroleum & natural
gas revenue 51.24 50.95 50.95
Royalties, net of ARTC (10.92) (10.84) (10.84)
Operating expense (10.04) (10.04) (10.04)
Transportation and
marketing expense (1.15) (1.13) (1.13)
------------------------------------------------------------------------
Netback 29.13 28.94 28.94
General & administrative
expense (2.75) (6.81) (11.82)
Interest expense (1.29) (1.26) (1.27)
Other income 1.94 2.75 5.23
Taxes (0.21) (0.23) (0.26)
------------------------------------------------------------------------
Cash Flow netback 26.82 23.39 20.82
Depletion and
depreciation (21.08) (21.96) (22.04)
Accretion (0.24) (0.24) (0.24)
Stock option compensation
expense (1.18) (2.90) (5.30)
Future income tax expense (2.88) (2.82) (2.82)
------------------------------------------------------------------------
Net Earnings (loss) 1.44 (4.53) (9.58)
------------------------------------------------------------------------
------------------------------------------------------------------------

FINANCIAL
Petroleum & Natural Gas
Revenue ($) 6,673,000 6,772,000 6,772,000
------------------------------------------------------------------------
Cash Flow from
Operations ($) 3,493,000 3,109,000 2,767,000
Per share - basic ($) 0.06 0.10 0.11
Per share - diluted ($) 0.06 0.09 0.11
------------------------------------------------------------------------
Net Earnings (loss) ($) 186,000 (601,000) (1,273,000)
Per share - basic ($) NIL (0.02) (0.05)
Per share - diluted ($) NIL (0.02) (0.05)
------------------------------------------------------------------------
Common Shares Outstanding
End of Period 56,365,347 56,365,347 56,365,347
Weighted Average for
Period - Basic 56,236,315 32,507,978 24,510,246
Weighted Average for
Period - Diluted 57,547,487 34,012,050 26,011,180

------------------------------------------------------------------------
Capital Expenditures,
net ($) 250,946,000 253,333,000
Working Capital
(Deficiency) ($) 911,000 911,000
Revolving Credit
Facility ($) 55,155,000 55,155,000
Total Debt ($) 54,244,000 54,244,000
------------------------------------------------------------------------
------------------------------------------------------------------------


The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. Per barrel of oil equivalent ("boe") amounts have been calculated using a 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 Exchange under the symbol "BIR".

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

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