Caribou Resources Corp.
TSX VENTURE : CBU

Caribou Resources Corp.

June 13, 2007 15:56 ET

Caribou Resources Corp. Provides Update and Issues Q1 Report

CALGARY, ALBERTA--(Marketwire - June 13, 2007) - Caribou Resources Corp. (TSX VENTURE:CBU):

JED Oil Inc. has completed the first step in its previously announced offer to Caribou Resources Corp. to acquire all of its shares and settle with its creditors. JED closed the acquisition of the debt and security position held by Caribou's major secured creditor for approximately $29 million. JED and Caribou have also been negotiating the final details of the formal agreements. It is the goal of JED and Caribou that formal documents for both the arrangements with Caribou's other creditors and Caribou's shareholders and optionholders will be finalized in time to be presented at the next scheduled hearing in the Court of Queen's Bench of Alberta in Calgary, on Thursday, June 14.

Caribou releases its Q1 Report as detailed below

The materials filed to date in the CCAA proceedings are available on the Monitor's website of www.deloitte.ca under the Insolvency and Restructuring link (the "Website") or by contacting the Monitor directly at (403) 267-0505 or by email at caribou@deloitte.ca.

CARIBOU RESOURCES CORP.

March 31, 2007

Management's Discussion and Analysis

Management's Discussion & Analysis ("MD&A") is intended to assist in the understanding of the trends and significant changes in the financial condition and results of operations of Caribou. The following information has been prepared by management and should be read in conjunction with the unaudited interim financial statements for the three month period ended March 31, 2007, as well as the audited financial statements and MD&A for the years ended December 31, 2006 and 2005 together with the notes related thereto. All data are presented in Canadian dollars. The calculation of barrels of oil equivalent ("boe") is based on a conversion ratio of six thousand cubic feet of natural gas to one barrel of oil to estimate relative energy content and does not represent a value equivalency at the wellhead. Boes may be misleading, particularly if used in isolation. Additional information relating to Caribou is available at www.sedar.com.

Non-GAAP measurements

The MD&A contains the term funds flow from operations which should not be considered an alternative to, or more meaningful than, cash flow from operating activities or net earnings as determined in accordance with Canadian Generally Accepted Accounting Principles ("GAAP") as an indicator of Caribou's performance. Caribou's determination of funds flow from operations may not be comparable to that reported by other companies. The reconciliation between net earnings and cash flow from operations, (which is also called "funds flow from operations") can be found in the statements of cash flows. The Company also presents funds flow per share, whereby funds flow from operations is divided by the weighted average number of shares outstanding to determine per share amounts. This measure does not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies. In addition, management uses Netback, a non-GAAP term, to analyze operating performance. Netback is calculated as total revenue less royalties, operating costs and transportation calculated on a boe basis.

Forward looking statements

Statements throughout this report that are not historical facts may be considered "forward looking statements." These forward looking statements sometimes include words to the effect that management believes or expects a stated condition or result. All estimates and statements that describe the Company's objectives, goals or future plans are forward looking statements. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to any number of factors, including such variables as new information regarding recoverable reserves, changes in demand for, and commodity prices of crude oil and natural gas, legislative, environmental and other regulatory or political changes, competition in areas where the Company operates and other factors discussed in this report.

The Company

Caribou Resources Corp. ("Caribou" or the "Company") is a full cycle exploration and development company primarily focused on exploring for oil and natural gas in Northern and Central Alberta. The following discussion and analysis is dated June 11, 2007, and is management's assessment of Caribou's three months ended March 31, 2007 ("Q1") operating and financial results, compared to the corresponding periods for 2006.

On January 30, 2007, the Company obtained creditor protection under the Companies' Creditors Arrangement Act (Canada), ("CCAA") pursuant to an Order from the Alberta Court of Queen's Bench (the "Court"). CCAA protection stays creditors and others from enforcing claims against Caribou and affords Caribou the opportunity to restructure its financial affairs. The Court initially granted CCAA protection for a period of 30 days, expiring February 28, 2007, which was subsequently extended to May 3, 2007. By Court Order granted on May 3, 2007 the CCAA protection was extended until midnight on May 25, 2007. On May 25, 2007 Caribou requested and was granted an extension of the stay of proceedings contained in the intial order until Miidnight on Thursday May 31, 2007.

On May 31, 2007, Caribou applied for and was granted an extension of the stay of proceedings contained in the Initial Order until midnight on Thursday June 14, 2007. The stay extension will provide Caribou with an opportunity to enter into negotiations with JED Oil Inc. ("JED") in respect of JED's offer to Caribou dated May 23, 2007 (the "JED Offer") and the Plan of Arrangement transaction contemplated therein. While under CCAA protection, the Board of Directors maintains its usual role and management of Caribou remains responsible for the day-to-day operations of the Company, under the supervision of a Court-appointed monitor who is responsible for reviewing Caribou's ongoing operations, assisting with the development and filing of a Plan of Arrangement ("Plan"), liaising with creditors and other stakeholders and reporting to the Court. The Board of Directors and management are primarily responsible for formulating the Plan for restructuring Caribou's affairs.

Operations

During Q1 , 2007 Caribou partcipated in the abandonment of nine (4.4 net) Northern Area wells as part of EUB regulatory requirements. In addition the Company carried out routine workover operations on eight (4.5 net) wells in its Redwater core area. Caribou's Q1, 2007 average production was 1,053 boe/d consisting of 378 bbl/d of oil and liquids and 4,042 mcf/d of gas (64% gas). This compares to Q1 , 2006 average production of 1,450 boe/d consisting of 499 bbl/d of oil and liquids and 5,704 mcf/d of gas (66% gas).



Net loss and funds flow

Three months ended March 31
$ 2007 2006
----------------------------------------------------------------------------
Net loss (3,851,946) (775,399)
Per share - basic (0.10) (0.02)
Per share - diluted (0.10) (0.02)
Funds flow from operations (617,894) 3,367,288
Per share - basic (0.02) 0.10
Per share - diluted (0.02) 0.10
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Net loss increased and funds flow from operations were significantly reduced in 2007, principally due to incurring substantial costs in relation to the CCAA process. These costs included a one time financing fee of $770,000, default interest of $234,000, $ 174,000 of legal fees and $ 681,000 of CCAA administrative costs. Prior to deducting these costs, cash flow of $375,000 per month was achieved, despite the 27% reduction in production.



Oil and natural gas revenues

Three months ended March 31
$ 2007 2006
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Oil and liquids 2,229,106 2,851,068
Per barrel 65.43 63.45
Natural gas 2,896,893 3,800,824
Per mcf 7.96 7.40
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For the quarter ended March 31, 2007, total oil and gas revenue decreased 23%, primarily reflecting a 27% decline in production volume, when compared to the corresponding quarter in 2006, offset by a 6% increase in product prices, as determined on a per boe basis.



Royalties

Three months ended March 31
$ (except %) 2007 2006
----------------------------------------------------------------------------
Royalties, net of ARTC 501,717 440,224
Per boe 5.30 3.37
% of revenue 9.8% 6.6%
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The royalties consisting of crown, gross overriding and freehold royalties were higher for the first quarter of 2007, reflecting an increase due to lower gas cost allowance credits. Caribou estimates the total value of these recoveries over 10 years to be approximately $8 million at a 10% NPV discount rate.



Operating and transportation

Three months ended March 31
$ 2007 2006
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Operating 2,034,395 1,466,541
Per boe 21.49 11.24
Transportation 133,227 182,129
Per boe 1.41 1.39
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Total 2,167,622 1,738,266
Per boe 22.90 13.32
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Operating costs have risen by 39% since the first quarter of 2006 and by 70% on a per boe basis. In addition, prior period adjustments on non-operated properties added $2.35 per boe to Q1 2007 operating costs. Upon implementation of a successful plan of arrangement, any potential further adjustments arising earlier than January 31, 2007 are disentitled. Current period costs also are impacted by a 92% increase in processing fee rates at Larne and Bistcho, and on a per boe basis reflect the impact of reduced volumes on the fixed cost element.



Netbacks

Three months ended March 31
$/boe 2007 2006
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Revenue 54.14 50.97
Royalties, net of ARTC 5.30 3.37
Operating and transportation 22.90 13.32
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Operating netback 25.94 34.28
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General and administrative 8.32 4.97
CCAA adminstration costs 7.19 -
Interest 16.96 3.37
Taxes - 0.14
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Cash netback (6.53) 25.80
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Operating netbacks were 32% lower on a per boe basis in Q1 2007. Although per boe revenue was marginally higher, this was offset by an increase in effective royalty rate and considerably higher operating costs.

Cash netbacks were further impacted by higher interest costs associated with increased bank indebtness, the one time costs associated with short-term bridge facility, CCAA administrative costs and higher G & A costs due to legal fees.



General and administrative ("G&A")

Three months ended March 31
$ 2007 2006
----------------------------------------------------------------------------
General and administrative 787,739 647,935
Per boe 8.32 4.97
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General and administrative expense increased in the first quarter of 2007 compared to first quarter of 2006 due to the inclusion of $ 173,646 in legal fees for services provided immediately prior to the petition for CCAA protection. The increase is even greater on a per boe basis due to the reduced level of production.



CCAA adminstrative costs

Three months ended March 31
$ 2007 2006
----------------------------------------------------------------------------
CCAA adminstrative costs 680,851 -
Per boe 7.19 -
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CCAA administrative costs include professional fees billed by the Company's legal counsel, the Court appointed Monitor and the Monitor's counsel.



Stock-based compensation

Three months ended March 31
$ 2007 2006
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Stock-based compensation 107,986 229,966
Per boe 1.14 1.76
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Stock-based compensation expense reflects the value attributed to stock options granted to employees, officers and directors of the Company. During the first quarter of 2007, the Company granted no options compared to 320,000 options in the first quarter of 2006. The stock-based compensation decreased, reflecting the expiration of options related to staff reduction.



Interest and other financing charges

Three months ended March 31
$ 2007 2006
----------------------------------------------------------------------------
Interest and other financing charges 1,605,962 439,669
Per boe 16.96 3.37
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The increased loan carrying costs reflect higher levels of principal/subordinated debt carried by the Company, higher interest rates, and one-time financing charges with reviewing and increasing the bridge facility. Specifically the Company incurred a financing fee of $770,000 in January when the bank facility was replaced by an increased bridge facility. The CCAA process also triggered an additional 5% default interest rate, amounting to $ 234,000 over the quarter.



Depletion, depreciation and accretion ("DD&A")

Three months ended March 31
$ 2007 2006
----------------------------------------------------------------------------
Depletion and depreciation 3,020,062 4,106,472
Per boe 31.90 31.47
Accretion 106,004 97,491
Per boe 1.12 0.75
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Depletion and depreciation was lower compared to Q1 2006 due to the lower production volume. However, since the 2006 ceiling test write down reduced reserves in proportion to the reduction in depletable base, the rate of depletion is essentially unchanged on a per boe basis.



Taxes

Three months ended March 31
$ 2007 2006
----------------------------------------------------------------------------
Capital taxes - 18,510
Future income tax (recovery) - (291,242)
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The Company recorded no future tax recovery for the first quarter of 2007 compared to a future tax recovery of $ 291,242 for Q1 2006. Future income tax reflects the difference between the underlying tax value and carrying value of the Company's assets and liabilities.

The Company has estimated that available tax pools to reduce future taxable income are approximately $92.2 million. The Company has a further $5.7 million CEE to incur by December 31, 2007 in order to honor the commitments of the June 2006 flow-through share issue.

Liquidity and capital resources

The Company entered 2007 with current liabilities of $47.8 million, offset by $4.8 million of current assets.

The Company had a revolving credit facility in the amount of $13 million with a Canadian chartered bank, bearing interest at prime plus 0.25% per annum. The facilities were secured by a $35 million demand debenture with a first floating charge (with a right to fix) over all the present and future property acquisitions. A short-term development bridge facility was obtained during the fourth quarter of 2005 from an independent Canadian lending company. The effective interest rate is at bank prime plus three percent and the maturity date was December 31, 2006. At December 31, 2006, the outstanding balance of this bridge facility was $14.5 million. The bridge facility was subordinated to the above revolving credit facility.

In January 2007, the Company closed the $13 million revolving credit facility, and simultaneously increased the short-term bridge facility to $28 million. The short-term bridge facility is a demand loan and bears interest at bank prime plus three percent, maturing March 30, 2007, and is secured by a $35 million demand debenture with a first fixed charge over all the present and future property acquisitions. Subsequent to March 30, 2007, the maturity date of the bridge facility was extended pending the outcome of the CCAA process. For the duration of the CCAA process, this facility bears default interest at an additional 5%.

On January 30, 2007, the Company obtained creditor protection under the Companies' Creditors Arrangement Act (Canada), ("CCAA") pursuant to an Order from the Alberta Court of Queen's Bench (the "Court"). CCAA protection stays creditors and others from enforcing claims against Caribou and affords Caribou the opportunity to restructure its financial affairs. The Court initially granted CCAA protection for a period of 30 days, expiring February 28, 2007, which was subsequently extended to May 3, 2007. By Court Order granted on May 3, 2007 the CCAA protection was extended until midnight on May 25, 2007. On May 25, 2007 Caribou requested and granted an extension of the stay of proceedings contained in the initial order until Midnight on Thursday May 31, 2007.

On May 31, 2007, Caribou applied for and was granted an extension of the stay of proceedings contained in the Initial Order until midnight on Thursday June 14, 2007. The stay extension will provide Caribou with an opportunity to enter into negotiations with JED Oil Inc. ("JED") in respect of JED's offer to Caribou dated May 23, 2007 (the "JED Offer") and the Plan of Arrangement transaction contemplated therein. While under CCAA protection, the Board of Directors maintains its usual role and management of Caribou remains responsible for the day-to-day operations of the Company, under the supervision of a Court-appointed monitor who is responsible for reviewing Caribou's ongoing operations, assisting with the development and filing of a Plan of Arrangement ("Plan"), liaising with creditors and other stakeholders and reporting to the Court. The Board of Directors and management are primarily responsible for formulating the Plan for restructuring Caribou's affairs.

This Plan will describe how Caribou proposes to restructure its affairs. The Plan requires approval by the Court and the requisite number and value of the affected stakeholders.



Capital expenditures

Three months ended March 31
$ 2007 2006
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Seismic and geological evaluation (1,795) 612,983
Land acquisition and retention 6,257 4,008,866
Well drilling, completion, equipping and
pipelining 1,632,411 20,651,347
Disposition -
Office equipment - 13,552
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Total 1,636,873 25,286,748
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With the Company in the CCAA process, no winter drilling was undertaken in Q1 2007. Virtually all of the capital expenditures during the quarter were directed towards abandonment and reclamation as part of EUB regulatory requirements.

Risk management program

Caribou has implemented a risk management program consisting of both fixed price contracts as well as costless collars which will help to mitigate commodity price volatility, provide both downside protection and the opportunity to share in the upside if energy prices move upwards. These contracts are as follows:



Product Volume Period Contract Price
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Nov 1/06 -
Natural gas 1,200 GJ/day Oct 31/07 Fixed $7.14/GJ AECO

Jan 1/07 -
Natural gas 1,280 GJ/day Dec 31/07 Fixed $7.70/GJ AECO

Jan 1/08 - Costless
Natural gas 1,758 GJ/day Dec 31/08 collar $7.00/GJ to $9.60/GJ AECO

Jan 1/09 - Costless
Natural gas 1,192 GJ/day Dec 31/09 collar $7.00/GJ to $8.35/GJ AECO

Jan 1/07 -
Oil 123 bbls/day Dec 31/07 Fixed US$64.50/bbl WTI

Jan 1/07 -
Oil 123 bbls/day Dec 31/07 Fixed US$64.80/bbl WTI

Jan 1/08 - Costless US$65.00/bbl to
Oil 81 bbls/day Dec 31/08 collar US$70.50/bbl WTI

Jan 1/08 - Costless US$65.00/bbl to
Oil 81 bbls/day Dec 31/08 collar US$71.46/bbl WTI

Jan 1/09 - Costless US$65.00/bbl to
Oil 58 bbls/day Dec 31/09 collar US$70.35/bbl WTI

Jan 1/09 - Costless US$65.00/bbl to
Oil 58 bbls/day Dec 31/09 collar US$71.46/bbl WTI
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Related party transactions

The following transactions with related parties were done on a fair value basis defined as the amounts that would be agreed upon in an arm's length transaction between knowledgeable, willing parties, who are under no compulsion to act.

For the quarter ended March 31, 2007, the Company's legal counsel invoiced $ 271,038 (2006 -$285) for legal work charged. The Company's former Corporate Secretary is a partner in the legal firm. Included in accounts payable a March 31, 2007 is $155,063 (2006 -Nil) due to the Company's legal counsel.

Off-Balance Sheet obligations

The Company has no off-balance sheet obligations.

Business risks

The oil and natural gas industry inherently has many risks associated with it. The risks can be summarized in terms of economic, financial, cost of capital, environmental and human resource risk. Economic risk is the risk of finding and producing reserves at a cost which produces an economic return. Financial risk consists of marketing production at a reasonable price given market conditions. Cost of capital is the risk associated with Caribou's ability to obtain capital to fund its activities at a reasonable cost. Environmental risk is the risk of carrying out operations with potential for adverse impact upon the environment. Finally, human resource risk is the risk of having access to expertise which will allow Caribou to grow and prosper.

Critical accounting estimates

The preparation of the financial statements under Canadian GAAP requires management personnel to make estimates and assumptions for many financial statement items based on their estimate and judgment. The amounts recorded for depletion, depreciation of property and equipment, stock-based compensation, and the provision for asset retirement obligations are based on estimates. The ceiling test is based on estimates of oil and natural gas reserves, production rates, oil and gas prices, future costs and other relevant assumptions. The calculation of future income tax is based on assumptions, which are subject to uncertainty as to timing and which tax rates temporary differences are expected to reverse. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant.

The Company follows the full cost method of accounting for oil and natural gas properties as prescribed by the Canadian Institute of Chartered Accountants (CICA) in Accounting Guideline 16. Under this method all costs associated with the acquisition of, exploration for and the development of oil and natural gas reserves are capitalized. These capitalized costs are depleted or depreciated on the unit-of-production method based on the estimated proved reserves. A revision to the estimate for proved reserves can have a significant impact on earnings as proved reserves are a key component in the calculation of depreciation, depletion and amortization.

Costs related to unproved properties are excluded from capitalized costs being amortized through depletion and depreciation expense. These costs are excluded from the depletion and depreciation calculation until proved reserves are found or until it is determined that the costs are impaired. Including these costs in the calculation could have a significant impact on depletion and depreciation expense for the year. Proceeds on disposal of properties are generally deducted from capitalized costs without recognition of gain or loss except where such disposal constitutes a significant portion of the Company's reserves.

Under the full cost accounting method, a ceiling test is performed at least annually to ensure that the net capitalized costs do not exceed the undiscounted future net revenues from proved plus probable reserves, plus the cost of unproved properties. Any excess capitalized costs will be written off as an expense and charged to earnings; however, future depletion and depreciation expense would be reduced.

The Company retains McDaniel & Associates Consultants Ltd., an independent petroleum engineering firm, to evaluate the Company's proved plus probable oil and gas reserves. The estimation of reserves is subjective. Forecasts are based on engineering data, future prices, expected future rates of production and the timing of capital expenditures, all of which are subject to uncertainties and interpretations. Reserve estimates will be revised upward or downward based on the results of future drilling, testing and production levels.

The Company recognizes a liability for the future retirement obligations associated with its oil and natural gas properties. The retirement obligation is initially measured at fair value, which is the discounted future value of the liability. This fair value is capitalized as part of the cost of the related asset and amortized to expense over its useful life. The liability accretes until the date of expected settlement of the retirement obligation. Factors that can affect this estimate include the number of wells drilled, well depths and area-specific environmental legislation.

Changes in accounting policies and practices

Details outlining Caribou's accounting policies are contained in the notes to the financial statements. There were no changes in the Company's accounting policies and practices in 2006, compared to the previous year.

Disclosure controls and procedures

The Vice Chairman & CEO and Vice President & CFO evaluated the effectiveness of the Company's disclosure controls and procedures as at the financial year ended December 31, 2006. Based on that evaluation, the Vice Chairman & CEO and Vice President & CFO concluded that the design and operation of these disclosure controls and procedures were effective as at December 31, 2006 to provide reasonable assurance that material information relating to the Company would be made known to them by others within the entity.

Internal Controls over Financial Reporting

The discussion and conclusion with respect to the Company's internal over financial reporting included in the December 31, 2006 MD&A remain unchanged as at March 31, 2007.

New Canadian Accounting Pronouncements

Effective January 1, 2007, the Company adopted five new accounting standards issued by the Canadian Institute of Chartered Accountants ("CICA"): Handbook Section 3855"Financial Investments -Recognition and Measurement", Section 3861 "Financial Instruments -Disclosure and Presentation", Section 3865 "Hedges", Section 1506 "Accounting Changes", Section 1530 "Comprehensive Income" and Section 3251 "Equity". The adoption of these new standards and no impact of the Comany's financial statements.

Outstanding share data

The Company's authorized share capital consists of an unlimited number of common shares without nominal or par value and an unlimited number of preferred shares issued in series. There were 38,529,540 common shares outstanding at March 31, 2007, and the same amount of common shares outstanding as at the date of this report. As at March 31, 2007 there were 109,973 share purchase warrants outstanding.

The Company's stock option plan provides for granting of options to directors, employees and consultants. At March 31, 2007 a total of 2,657,500 options were outstanding.



Summary of quarterly operating and financial results
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2007 2006
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First Full Year Fourth Third Second First
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Operating
Natural gas (mcf/day) 4,045 5,647 4,572 5,009 7,323 5,704
Price ($/mcf) 7.96 6.53 7.14 5.90 5.93 7.40
Oil and NGL's
(bbls/day) 379 515 463 582 514 499
Price ($/bbl) 65.43 65.24 55.83 70.83 69.15 63.45
Barrels of oil
equivalent (per day) 1,053 1,456 1,225 1,417 1,735 1,450

Financial ($000's,
except per share
amounts)
----------------------------------------------------------------------------
Oil and natural gas
revenues 5,126 25,738 5,384 6,512 7,190 6,652
Royalties, net of
ARTC (502) (2,155) (909) (484) (322) (440)
Interest and other
revenue - 7 7 - - -
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Net revenues 4,624 23,590 4,482 6,028 6,868 6,212
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Operating expenses 2,033 11,091 3,625 3,214 2,695 1,557
Transportation 133 754 163 194 215 182
General and
administrative 788 3,173 740 600 1,185 648
Stock-based
compensation 108 689 246 27 186 230
Depletion and
depreciation 3,020 22,561 7,754 5,307 5,394 4,106
Interest 1,606 3,072 1,086 775 771 440
Writedown of goodwill - 2,607 2,607 - - -
Writedown of petroleum
and natural gas
properties - 52,393 52,393 - - -
CCAA adminstrative
cost 681 - - - - -
Accretion 106 403 104 102 100 97
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Total expenses 8,475 96,743 68,718 10,219 10,546 7,260
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Income (loss) before
income taxes (3,851) (73,153) (64,236) (4,191) (3,678) (1,048)
Capital taxes - (40) (41) - 19 (18)
Future income taxes - 12,928 9,933 291 2,413 291
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Net income (loss) for
the period (3,851) (60,265) (54,344) (3,900) (1,246) (775)
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Income (loss) per
share (basic and
diluted) (0.06) (1.63) (1.41) (0.10) (0.03) (0.02)
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Funds flow ($000's) (618) 5,459 (1,173) 1,245 2,020 3,367
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Funds flow per share
(basic) (0.02) 0.15 (0.03) 0.03 0.06 0.10
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Netbacks ($/boe)
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Oil and natural gas
revenues 54.14 48.43 47.76 49.95 45.54 50.97
Royalties, net of
ARTC and GCA 5.30 4.05 8.06 3.71 2.04 8.29
Operating expenses 22.90 22.29 33.59 26.14 18.44 8.40
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Operating netback 25.94 22.09 6.11 20.10 25.06 34.28
General and
administrative 8.32 5.97 6.57 4.60 7.50 4.97
CCAA adminstrative
cost 7.19
Interest 16.96 5.78 9.63 5.94 4.88 3.37
Capital taxes - 0.08 (0.37) - (0.12) 0.14
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Cash netback (6.53) 10.42 (9.72) 9.56 12.80 25.80
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Total assets ($000's) 70,888 69,332 69,332 139,590 144,433 138,511
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2005
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Full Year Fourth Third Second First
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Operating
Natural gas (mcf/day) 4,846 6,391 4,672 4,814 3,569
Price ($/mcf) 9.28 11.36 9.47 7.18 7.23
Oil and NGL's (bbls/day) 698 638 700 671 778
Price ($/bbl) 63.04 63.44 70.37 61.51 57.90
Barrels of oil equivalent (per
day) 1,506 1,703 1,479 1,473 1,373

Financial ($000's, except per
share amounts)
----------------------------------------------------------------------------
Oil and natural gas revenues 32,484 10,590 8,618 6,900 6,376
Royalties, net of ARTC (5,470) (1,831) (1,554) (941) (1,144)
Interest and other revenue - - - - -
----------------------------------------------------------------------------
Net revenues 27,014 8,759 7,064 5,959 5,232
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Operating expenses 5,712 1,809 1,201 1,386 1,316
Transportation 1,688 424 353 459 452
General and administrative 2,362 469 619 593 681
Stock-based compensation 878 298 302 141 137
Depletion and depreciation 17,405 4,417 4,424 4,511 4,053
Interest 1,132 367 538 123 104
Writedown of goodwill - - - - -
Writedown of petroleum and
natural gas properties - - - - -
CCAA adminstrative cost - - - - -
Accretion 287 93 67 65 62
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Total expenses 29,464 7,877 7,504 7,278 6,805
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Income (loss) before income
taxes (2,450) 882 (440) (1,319) (1,573)
Capital taxes (97) (49) (22) (14) (12)
Future income taxes 1,254 443 100 362 349
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Net income (loss) for the
period (1,293) 1,276 (362) (971) (1,236)
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Income (loss) per share (basic
and diluted) (0.04) 0.04 (0.01) (0.03) (0.04)
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Funds flow ($000's) 16,024 5,642 4,329 3,386 2,667
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Funds flow per share (basic) 0.53 0.16 0.15 0.12 0.09
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Netbacks ($/boe)
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Oil and natural gas revenues 59.09 67.59 63.34 51.48 51.62
Royalties, net of ARTC and GCA 9.95 15.04 11.42 7.02 9.26
Operating expenses 13.46 10.89 11.42 13.77 14.31
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Operating netback 35.68 41.66 40.49 30.69 28.05
General and administrative 4.30 2.99 4.55 4.42 5.52
CCAA adminstrative cost
Interest 2.06 2.34 3.96 0.92 0.83
Capital taxes 0.18 0.31 0.16 0.10 0.11
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Cash netback 29.15 36.02 31.82 25.25 21.59
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Total assets ($000's) 119,683 119,683 110,341 94,180 98,003
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Caribou Resources Corp.
Balance Sheets
As at March 31, 2007 and December 31, 2006
(unaudited)

2007 2006
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ASSETS
Current assets
Cash $ 3,388,336 $ -
Accounts receivable 3,883,868 4,613,091
Prepaid expenses 463,099 182,907
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7,735,303 4,795,998
Property, plant and equipment (note 3) 63,152,978 64,536,166
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$ 70,888,281 $ 69,332,164
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank indebtedness (note 4) $ - $ 10,828,923
Short-term bridge facility (note 4) 28,000,000 14,500,000
Accounts payable and accrued liabilities 25,053,777 22,530,781
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53,053,777 47,859,704
Asset retirement obligations (note 5) 5,008,091 4,902,087
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58,061,868 52,761,791
----------------------------------------------------------------------------

SHAREHOLDERS' EQUITY
Share capital (note 7) 77,187,692 77,187,692
Warrants (note 7c) 208,767 208,767
Contributed surplus (note 8) 3,118,891 3,010,905
Deficit (67,688,937) (63,836,991)
----------------------------------------------------------------------------
12,826,413 16,570,373
----------------------------------------------------------------------------
$ 70,888,281 $ 69,332,164
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Going concern (note 2). Commitments (note 11).
See accompanying notes to Financial Statements


Approved by the Board of Directors:

(signed) (signed)
Christina M. Fehr Stephen J.A. Fagan
Director Director


Caribou Resources Corp.
Statements of Operations and Deficit
For the three months ended March 31, 2007 and 2006
(unaudited)

Three months ended March 31
2007 2006
----------------------------------------------------------------------------
REVENUES
Oil and natural gas $ 5,125,997 $ 6,651,892
Less: Royalties, net of GCA (501,717) (440,224)
----------------------------------------------------------------------------
4,624,280 6,211,668
----------------------------------------------------------------------------
EXPENSES
Operating 2,034,395 1,466,541
Transportation 133,227 271,725
General and administrative 787,739 647,935
CCAA administrative costs 680,851 -
Stock-based compensation (note 7f) 107,986 229,966
Interest and other financing charges 1,605,962 439,669
Accretion (note 5) 106,004 97,491
Depletion and depreciation 3,020,062 4,106,472
----------------------------------------------------------------------------
8,476,226 7,259,799
----------------------------------------------------------------------------
(3,851,946) (1,048,131)
----------------------------------------------------------------------------
Capital taxes - (18,510)
Future income tax recovery (note 6) - 291,242
----------------------------------------------------------------------------
- 272,732
----------------------------------------------------------------------------

NET LOSS FOR THE PERIOD (3,851,946) (775,399)
Deficit, beginning of period (63,836,991) (3,570,863)
----------------------------------------------------------------------------
Deficit, end of period $(67,688,937) $ (4,346,262)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net loss per share (note 7e)
Basic $ (0.10) $ (0.02)
Diluted $ (0.10) $ (0.02)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Weighted average common shares outstanding
Basic 38,529,540 34,849,924
Diluted 38,529,540 34,923,780
Outstanding shares 38,529,540 34,849,924
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Going Concern (note 2).
See accompanying notes to Financial Statements


Caribou Resources Corp.
Statements of Cash Flows
For the three months ended March 31, 2007 and 2006
(unaudited)

Three months ended March 31
2007 2006
----------------------------------------------------------------------------
Cash provided by (used in):

OPERATING
Net loss for the period $ (3,851,946) $ (775,399)
Add (deduct) items not affecting cash:
Depletion and depreciation 3,020,062 4,106,472
Non-controlling interest - -
Stock-based compensation 107,986 229,966
Accretion 106,004 97,491
Future income taxes - (291,242)
----------------------------------------------------------------------------
Funds flow from operations (617,894) 3,367,288
Change in non-cash working capital 2,998,716 17,575,191
----------------------------------------------------------------------------
2,380,822 20,942,479
----------------------------------------------------------------------------

FINANCING
Bank debt (10,828,923) 5,017,259
Proceeds from bridge financing 13,500,000 -
----------------------------------------------------------------------------
2,671,077 5,017,259
----------------------------------------------------------------------------

INVESTING
Property, plant and equipment, net of
dispositions (1,636,874) (25,286,748)
Change in non-cash working capital (26,689) (672,990)
----------------------------------------------------------------------------
(1,663,563) (25,959,738)
----------------------------------------------------------------------------
Increase in cash 3,388,336 -
Cash, beginning of period - -
----------------------------------------------------------------------------
Cash, end of period $ 3,388,336 $ -
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Cash is defined as cash and cash equivalents
See accompanying notes to Financial Statements


Caribou Resources Corp.
Notes to the Financial Statements
For the three months ended March 31, 2007 and 2006
(unaudited)


Note 1 : Basis of Presentation

These financial statements have been prepared using Canadian generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and settlement of liabilities in the normal course of business as they come due.

These interim financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles consistent with those used in preparation of the audited financial statements at December 31, 2006. Accordingly, these interim financial statements should be read in conjunction with the notes contained in the Company's audited December 31, 2006 financial statements.

Effective January 1, 2007, the Company adopted Canadian Institute of Chartered Accountants "CICA") Handbook Section 1530, Comprehensive Income, CICA Handbook Section 3855, Financial Instruments -Recognition and Measurement and CICA Handbook Section 3865, Hedges. These new Handbook Sections provide Comprehensive requirements for the recognition measurement of financial measurements, as well as standards on when and how hedge accounting may be applied. Handbook section 1530 also introduces a new component of equity referred to as accumulated other comprehensive income.

Under these new standards, all financial instruments derivatives, included on the balance sheet are either classified as held for trading, held-tomaturity investments, loans and receivables or available-for-sale categories and are measured either at fair market value or, in limited circumstances, at cost or amortized cost. After initial recognition, the financial instruments are measured at their fair values, except for held-tomaturity investments loaned and receivables and other financial liabilities, which are measured at amortized costs. The gain or loss arising from change in the fair value of a financial asset or financial liability classified as held for trading is included in earnings for the period in which it arises.

If a financial instrument is classified as available-for-sale, the gain or loss is recognized in other comprehensive income until the financial instrument is derecognized and the cumulative gains or losses are then recognized in earnings. This accounting change had no impact in the financial statements of the Company.

Transaction costs, related to financial assets and liabilities are accounted for as financial expenses. An embedded derivative is a component of a hybrid instrument that also includes a non-derivative host contract, with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. If certain conditions are met, an embedded derivative is separated from the host contract and accounted for as a derivative in the balance sheet, at its fair value. The Company has elected to recognize embedded derivatives in its balance sheet, if applicable. This accounting change had no impact in the financial statements of the Company. Derivatives that qualify as hedging instruments must be designated as either a "cash flow hedge" when the hedged item is a future cash flow, or a "fair value hedge'" when the hedged item is the fair value of a recognized asset or liability. The effective portion of the unrealized gains and looses related to a cash flow hedge are included in other comprehensive income. For a fair value hedge, both the derivative and hedged item are recorded at fair value in the balance sheet.

The adoption of these new standards had no impact on the Company's financial statements.

Note 2 : Going concern

As at March 31, 2007, the Company had a working capital deficiency, excluding bank indebtedness and short-term bridge facility (see Note 3), of $17,318,474 and a deficit of $ 66,974,462. The working capital deficiency primarily consists of accounts payable and accrued liabilities incurred during the Company's capital expenditure programs.

On January 30, 2007, the Company obtained creditor protection under the Companies' Creditors Arrangement Act (Canada), ("CCAA") pursuant to an Order from the Alberta Court of Queen's Bench (the "Court"). CCAA protection stays creditors and others from enforcing claims against Caribou and affords Caribou the opportunity to restructure its financial affairs. The Court initially granted CCAA protection for a period of 30 days, expiring February 28, 2007, which was subsequently extended to May 3, 2007. By Court Order granted on May 3, 2007 the CCAA protection was extended until midnight on May 25, 2007. On May 25, 2007 Caribou requested and granted, an extnesion of the stay of proceedings contained in the intial order until Miidnight on Thursday May 31, 2007.

On May 31, 2007, Caribou applied for and was granted an extension of the stay of proceedings contained in the Initial Order until midnight on Thursday June 14, 2007. The stay extension will provide Caribou with an opportunity to enter into negotiations with JED Oil Inc. ("JED") in respect of JED's offer to Caribou dated May 23, 2007 (the "JED Offer") and the Plan of Arrangement transaction contemplated therein. While under CCAA protection, the Board of Directors maintains its usual role and management of Caribou remains responsible for the day-to-day operations of the Company, under the supervision of a Court-appointed monitor who is responsible for reviewing Caribou's ongoing operations, assisting with the development and filing of a Plan of Arrangement ("Plan"), liaising with creditors and other stakeholders and reporting to the Court. The Board of Directors and management are primarily responsible for formulating the Plan for restructuring Caribou's affairs.

This Plan will describe how Caribou proposes to restructure its affairs. The Plan requires approval by the Court and the requisite number and value of the affected stakeholders.

Although CCAA protection enables Caribou to continue with its day-to-day operations until its CCAA status changes, the implications for the Caribou shareholders are less clear. At the end of the restructuring process, realizable value left for shareholders will depend upon the terms of the Plan approved by the affected stakeholders. If the Plan is not approved, Caribou will likely be placed into receivership or bankruptcy.

The actual outcome of future events may differ from these plans. In particular, there can be no assurance that the Company will be able to successfully access debt financing objectives. These financial statements have been prepared on the basis that the Company will continue to realize its assets and discharge its obligations in the ordinary course of business and do not reflect adjustments that would be necessary if the going concern assumption was not valid. Such adjustments, if necessary, may be material.



Note 3 : Property, plant and equipment

March 31, December 31,
$ 2007 2006
----------------------------------------------------------------------------
Oil and natural gas properties, plant and
equipment 163,184,566 161,547,692
Office equipment and computers 134,651 134,651
----------------------------------------------------------------------------
163,319,217 161,682,343
Less accumulated depletion and depreciation (100,166,239) (97,146,177)
----------------------------------------------------------------------------
63,152,978 64,536,166
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Unproved oil and gas properties amounting to $9.7 million (2006 -$9.7 million) were excluded from the depletion and depreciation calculation. Future development costs on proved undeveloped reserves of $6.1 million (2006 -$6.1 million) are included in the depletion calculation. No ceiling test write-down was required on March 31, 2007.

During the quarter, Caribou capitalized approximately $334,468 (2006 -$278,000) of general and administrative expenses directly related to exploration and development activities.



Note 4 : Loans
March 31, December 31,
$ 2007 2006
----------------------------------------------------------------------------
Bank indebtedness - 10,828,923
Short-term bridge facility 28,000,000 14,500,000
----------------------------------------------------------------------------


Until January 2007, the Company had a revolving credit facility in the amount of $13 million with a Canadian chartered bank, bearing interest at prime plus 0.25% per annum. The facility was secured by a $35 million demand debenture with a first floating charge (with a right to fix) over all the present and future property acquisitions.

The short-term development bridge facility was obtained during the fourth quarter of 2005 from an independent Canadian lending company. The effective interest rate is at bank prime plus three percent with a maturity date being March 30, 2007.

In January 2007, the Company closed the $13 million revolving credit facility, and simultaneously increased the short-term bridge facility to $28 million. The short-term bridge facility is a demand loan and bears interest at bank prime plus three percent, maturing March 30, 2007, and is secured by a $35 million demand debenture with a first fixed charge over all the present and future property acquisitions. Subsequent to March 30, 2007, the maturity date of the bridge facility was extended pending the outcome of the CCAA process. For the duration of the CCAA process, this facility bears default interest at an additional 5%.



Note 5 : Asset retirement obligations

March 31, December 31,
$ 2007 2006
----------------------------------------------------------------------------
Balance, beginning of period 4,902,087 4,459,585
Liabilities incurred - 39,972
Accretion 106,004 402,530
----------------------------------------------------------------------------
Balance, end of period 5,008,091 4,902,087
----------------------------------------------------------------------------
----------------------------------------------------------------------------


The Company's asset retirement obligations result from net ownerships in petroleum and natural gas assets including well sites, gathering systems and processing facilities. The Company estimates the total undiscounted amount of cash flows required to settle its asset retirement obligations is $7.3 million, (2006 -$7.3 million) which will be incurred between 2007 and 2019. The majority of the costs will be incurred between 2010 and 2016. An inflation rate of 2% was used to inflate the costs, and a credit-adjusted risk-free rate of 8.5% was used to calculate the fair value of the asset retirement obligations.

Note 6 : Taxes

The difference between the expected income tax provision based on the combined federal and provincial statutory tax rate of 34.49% (2006 34.49%) and the amount actually provided for is as follows:



March 31, March 31,
$ 2007 2006
----------------------------------------------------------------------------
Tax expense (recovery) at 34.49% of net loss
before taxes (1,328,536) (373,344)
Non-deductible crown payments 48,740 135,219
Alberta Royalty Tax Credit - (28,941)
Stock-based compensation 37,244 81,914
Resource allowance (57,544) (125,462)
Non-deductible expenditures 1,886 2,046
Tax effect on flow-through share renunciation
(June 2006 issue) - -
Writedown of goodwill -
Writedown of future tax asset -
Other 216,615 -
Rate reduction 17,326
Timing adjustment on consolidation - -
----------------------------------------------------------------------------
Future income tax (recovery) (1,081,595) (291,242)
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Note 7 : Share capital

(a) Authorized

Unlimited number of common shares without nominal or par value and an
unlimited number of preferred shares issued in series.

(b) Common shares issued and outstanding

Number
of shares Amount
----------------------------------------------------------------------------
Balance, March 31, 2007 and December 31, 2006 38,529,540 $ 77,187,692
----------------------------------------------------------------------------
----------------------------------------------------------------------------


(c) Warrants

On February 28, 2003, the Company issued 152,786 share purchase warrants. Each warrant is exercisable into one common share at an exercise price of $1.75 per share until February 28, 2005, $2.00 per share until February 28, 2006, $2.50 per share until February 28, 2007, and $3.00 per share until February 28, 2008. As at December 31, 2006, 38,813 of these warrants had been exercised at $1.75 per share, and another 4,000 warrants at $2.00 per share, leaving a balance of 109,973 warrants outstanding.



Balance, Exercise Fair Balance,
December 31, 2006 price ($) value ($) Expiry Date March 31, 2007
----------------------------------------------------------------------------
109,973 2.50 208,767 February 28, 2008 109,973
----------------------------------------------------------------------------
----------------------------------------------------------------------------


The fair value of the above warrants was calculated using the Black-Scholes option pricing model with the following assumptions: dividend yield -nil; expected volatility -77%; risk-free interest rate -3.5%; weighted average expected life -1.26 years; and weighted average estimated value of underlying shares -$2.47 at that time. Each warrant entitles the holder to one common share of the Company.

(d) Flow-through shares

Under the terms of the Company's flow-through share agreements, the Company has committed to incur approximately $6.25 million (2006 -$6.25 million) of qualifying oil and natural gas Canadian Exploration Expenses ("CEE") between June 8, 2006 and December 31, 2007. Of this amount approximately $5.7 million is still to be incurred.



(e) Per share amounts

The following table summarizes the basis for the determination of basic and
diluted per share amounts:

Three months ended March 31
2007 2006
----------------------------------------------------------------------------
Weighted average common shares outstanding -
basic 38,529,540 30,254,873
Weighted average common shares outstanding -
diluted 38,529,540 30,343,760
----------------------------------------------------------------------------

Net loss per share:
Net loss for the period ($) (3,851,946) (1,292,942)
Basic ($/share) (0.10) (0.04)
Diluted ($/share) (0.10) (0.04)


(f) Stock-based compensation

The Company has a stock option plan that is described below.

Three months ended March 31
2007 2006
----------------------------------------------------------------------------
Fair value of options granted ($/option) 1.02 0.76
Expected life of options (years) 3.5 3.5
Expected volatility (%) 85 75
Risk free rate of return (%) 3.5 3.5
Expected dividend yield (%) Nil Nil
----------------------------------------------------------------------------
----------------------------------------------------------------------------


(g) Stock options

The Company's stock option plan provides for granting of options to directors, employees and consultants to a maximum of ten percent of the total issued and outstanding common shares of the Company. These options have a term of five years to expiry and vest 30% as of the date of grant, 20% on each of the first two anniversary dates and 15% on the third and fourth anniversary dates. The Company has reserved common shares for issuance under the stock option plan in the amount of the stock options outstanding from time to time. The following tables summarize the information about options to purchase common shares as at March 31, 2007 and 2006.



2007 2006
-------------------- --------------------
Weighted Weighted
average average
Number of exercise Number of exercise
options price options price
------------------------------------------------------ --------------------
($/share) ($/share)
Balance, beginning of period 2,742,500 2.17 2,937,500 2.17
Granted - 2.01 320,000 2.03
Terminated (85,000) 2.15 - -
Exercised for cash - - - -
------------------------------------------------------ --------------------
Balance, end of period 2,657,500 2.16 3,257,500 2.17
------------------------------------------------------ --------------------
------------------------------------------------------ --------------------
Exercisable, end of period 1,309,860 2.15 1,327,200 2.16
------------------------------------------------------ --------------------
------------------------------------------------------ --------------------


Outstanding Exercisable
options options
--------------------------------------------------------
Weighted
average Weighted
Number of remaining Number of average
Exercise options contractual exercisable exercise
price outstanding life options price
----------------------------------------------------------------------------
($/share) (years) ($/share)
1.95 120,000 3.98 36,000 1.95
2.00 20,000 3.19 6,000 2.00
2.02 35,000 4.03 10,500 2.02
2.03 320,000 3.85 96,000 2.03
2.04 5,000 4.34 1,500 2.04
2.05 740,000 2.61 518,000 2.05
2.10 120,000 3.06 36,000 2.10
2.12 7,500 4.37 2,250 2.12
2.20 35,000 3.59 10,500 2.20
2.25 541,300 2.22 358,910 2.25
2.31 28,700 1.60 28,700 2.31
2.33 645,000 3.46 193,500 2.33
2.50 40,000 2.96 12,000 2.50
----------------------------------------------------------------------------
2.16 2,657,500 3.01 1,309,860 2.15
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Note 8 : Contributed surplus

March 31, December 31,
$ 2007 2006
----------------------------------------------------------------------------

Opening balance 3,010,905 1,418,328
Expiration of 1,504,600 warrants (see Note 7c) - 902,761
Stock-based compensation 107,986 689,816
----------------------------------------------------------------------------
3,118,891 3,010,905
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Note 9 : Related party transactions

The following transactions with related parties were done on a fair value basis defined as the amounts that would be agreed upon in an arm's length transaction between knowledgeable, willing parties, who are under no compulsion to act.

During the three months ended March 31, 2007, the Company's legal counsel invoiced $ 332,372 (2006 -$285) for legal work charged. A partner of this legal firm was the Company's Corporate Secretary until January 29, 2007. Included in accounts payable at March 31, 2007 is $155,063 (2006 - Nil) due to the Company's legal counsel.

Note 10 : Financial instruments

The Company's financial instruments recognized in the balance sheet consist of accounts receivable, accounts payable and accrued liabilities, bank indebtedness, and short-term bridge facility.

The estimated fair values of the financial instruments have been determined based on the Company's assessment of available market information and appropriate valuation methodologies; however, these estimates may not be necessarily indicative of the amounts that could be realized or settled in a current market transaction.

The carrying value of the Company's financial instruments approximate their fair market value due to their demand nature or relatively short periods to maturity. A substantial portion of the Company's accounts receivable are with customers and joint venture partners in the oil and natural gas industry and are subject to normal industry credit risks. The Company's bank indebtedness and short-term bridge facility are subject to floating interest rates.

Note 11 : Commitments

Under the terms of the Company's flow-through share agreements, the Company has committed to incur approximately $6.25 million (2005 $10.6 million) of qualifying oil and natural gas Canadian Exploration Expenses ("CEE") between June 8, 2006 and December 31, 2007. Of this amount approximately $5.7 million is still to be incurred.

At March 31, 2007 the Company has 12 months remaining on the lease of the office premises at $11.50 per square foot plus costs, or approximately $21,000 per month.

In conjunction with the CCAA process (see Note 1), the Company has committed to the payment of retention bonuses. The retention bonuses will be paid in the following instalments: (i) a sum representing 5% of the employees' salary if s/he continues to be actively employed with the Company at March 31, 2007 and at each month-end after June 1, 2007; and (ii) a sum representing 20% of the employees' salary if s/he continues to be actively employed with the Company up to and as of July 31, 2007 or upon implementation of a court-approved Plan of Arrangement under the CCAA proceedings, whichever occurs first.



In November 2006, the Company entered into the following hedging contracts:

Product Volume Period Contract Price
----------------------------------------------------------------------------
Nov 1/06 -
Natural gas 1,200 GJ/day Oct 31/07 Fixed $7.14/GJ AECO

Jan 1/07 -
Natural gas 1,280 GJ/day Dec 31/07 Fixed $7.70/GJ AECO

Jan 1/08 - Costless
Natural gas 1,758 GJ/day Dec 31/08 collar $7.00/GJ to $9.60/GJ AECO

Jan 1/09 - Costless
Natural gas 1,192 GJ/day Dec 31/09 collar $7.00/GJ to $8.35/GJ AECO

Jan 1/07 -
Oil 123 bbls/day Dec 31/07 Fixed US$64.50/bbl WTI

Jan 1/07 -
Oil 123 bbls/day Dec 31/07 Fixed US$64.80/bbl WTI

Jan 1/08 - Costless US$65.00/bbl to
Oil 81 bbls/day Dec 31/08 collar US$70.50/bbl WTI

Jan 1/08 - Costless US$65.00/bbl to
Oil 81 bbls/day Dec 31/08 collar US$71.46/bbl WTI

Jan 1/09 - Costless US$65.00/bbl to
Oil 58 bbls/day Dec 31/09 collar US$70.35/bbl WTI

Jan 1/09 - Costless US$65.00/bbl to
Oil 58 bbls/day Dec 31/09 collar US$71.46/bbl WTI
----------------------------------------------------------------------------


Note 12 : Subsequent events

On January 30, 2007, the Company obtained creditor protection under the Companies' Creditors Arrangement Act (Canada), ("CCAA") pursuant to an Order from the Alberta Court of Queen's Bench (the "Court"). CCAA protection stays creditors and others from enforcing claims against Caribou and affords Caribou the opportunity to restructure its financial affairs. The Court initially granted CCAA protection for a period of 30 days, expiring February 28, 2007, which was subsequently extended to May 3, 2007. By Court Order granted on May 3, 2007 the CCAA protection was extended until midnight on May 25, 2007. On May 25, 2007 Caribou requested and granted an extension of the stay of proceedings contained in the initial order until Midnight on Thursday May 31, 2007.

On May 31, 2007, Caribou applied for and was granted an extension of the stay of proceedings contained in the Initial Order until midnight on Thursday June 14, 2007. The stay extension will provide Caribou with an opportunity to enter into negotiations with JED Oil Inc. ("JED") in respect of JED's offer to Caribou dated May 23, 2007 (the "JED Offer") and the Plan of Arrangement transaction contemplated therein. While under CCAA protection, the Board of Directors maintains its usual role and management of Caribou remains responsible for the day-to-day operations of the Company, under the supervision of a Court-appointed monitor who is responsible for reviewing Caribou's ongoing operations, assisting with the development and filing of a Plan of Arrangement ("Plan"), liaising with creditors and other stakeholders and reporting to the Court. The Board of Directors and management are primarily responsible for formulating the Plan for restructuring Caribou's affairs.

This Plan will describe how Caribou proposes to restructure its affairs. The Plan requires approval by the Court and the requisite number and value of the affected stakeholders.

Although CCAA protection enables Caribou to continue with its day-to-day operations until its CCAA status changes, the implications for the Caribou shareholders are less clear. At the end of the restructuring process, the value of what is left for shareholders will depend upon the terms of the Plan approved by the affected stakeholders. If the affected stakeholders do not approve the Plan in the manner contemplated by law, Caribou will likely be placed into receivership or bankruptcy.



Caribou Resources Corp.
Corporate Information

Directors Officers
Stephen J.A. Fagan, MBA, Chairman Christina M. Fehr, BA, MSc
Calgary, Alberta Vice Chairman and CEO

Christina M. Fehr, BA, MSc Ross G. Robertson, P.Eng
Calgary, Alberta President and COO

Gordon A. Robertson, P.Geol (2) Giles Twogood, CA (SA)
Calgary, Alberta Vice President and CFO

Ross G. Robertson, P.Eng (1) Douglas Patterson, P.Land
Calgary, Alberta Vice President, Land

Donald J. Rowden, CA (1) (2) Corporate Office
Bend, Oregon 1545, 101 - 6th Avenue S.W.
Calgary, Alberta T2P 3P4
Gerald D. Sutton (1) (2) Phone: (403) 269-5218
Oakville, Ontario Fax: (403) 269-5221
Website: www.cariboures.com
(1) Member of the Audit Committee Contact: Christina M. Fehr
(2) Member of the Compensation Email: cmfehr@cariboures.com
Committee

Registrar and transfer agent Evaluation Engineers
Valiant Trust Company McDaniel & Associates Consultants Ltd.
Calgary, Alberta

Auditors Stock Exchange Listing
PricewaterhouseCoopers LLP TSX Venture Exchange
Calgary, Alberta Symbol: CBU

Banker Legal Counsel
Brookfield Bridge Lending Fund Inc. Blake, Cassels & Graydon LLP
Canadian Imperial Bank of Commerce
CCAA Monitor
Deloitte Touche LLP


Caution to the Reader

Certain information regarding the Company contained herein may constitute forward-looking statements under applicable securities laws. Such statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking statements. The risks, uncertainties and other factors that could influence actual results are described in the Company's annual reports to the shareholders and other documents filed with regulatory authorities.

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

Contact Information