Cyries Energy Inc.
TSX : CYS

Cyries Energy Inc.

March 13, 2007 08:00 ET

Cyries Energy Production Increases 88 Per Cent in 2006

CALGARY, ALBERTA--(CCNMatthews - March 13, 2007) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Donald Archibald, Chairman & CEO of Cyries Energy Inc. ("Cyries") (TSX:CYS) announces today its financial and operational results for the period ending December 31, 2006.



2006 Highlights

Year Year
ended ended
December December %
(000s, except as indicated) 31, 2006 31, 2005 Change
--------------------------------------------------------------------------

Petroleum and natural gas sales 139,161 96,415 44

Net earnings 9,356 14,832 (37)
Per share basic 0.23 0.46 (50)
Per share diluted 0.21 0.41 (49)

Funds generated from operations 69,726 50,864 37
Per share basic 1.70 1.58 8
Per share diluted 1.55 1.40 11

Capital expenditures 151,937 101,591 50
Acquisitions 55,474 125,229 (56)

Bank debt and working capital deficiency 111,934 73,220 53

Weighted average shares outstanding
Basic 41,015 32,286 27
Diluted 44,995 36,416 24

Average Sales Price
Oil $/bbl 68.16 64.22 6
Natural gas $/mcf 6.99 10.17 (31)
NGL $/bbl 56.76 55.23 3
--------------------------------------------------------------------------
Total $/boe 47.09 61.28 (23)

Average Daily Production
Oil bbl 1,324 772 72
Natural gas mcf 37,772 19,905 90
NGL bbl 476 221 115
--------------------------------------------------------------------------
Total boe 8,096 4,311 88

Production expenses $/boe 8.24 7.62 8

Operating netback $/boe 26.31 36.93 (29)

Undeveloped land
gross acres 606,165 230,833 163
net acres 391,407 172,497 127
Farm-in acreage net acres - 26,800 (100)

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Operations

Average production in 2006 increased 88 per cent to 8,096 barrels of oil equivalent per day ("boe per day"), compared with 4,311 boe per day during 2005. Production per diluted share increased 53 per cent during the same period.

Fourth quarter 2006 production averaged 8,613 boe per day, compared with 6,522 in the fourth quarter of 2005, an increase of 32 per cent. Production per diluted share increased 19 per cent for the same period.

Current production is 10,500 boe per day with another 2,000 boe per day expected to come on stream in the next 60 days. Approximately 400 boe per day will come from a previously announced acquisition, expected to close imminently and 1,500 boe per day of additional production which will come from the Gold Creek Halfway oil pool; Cyries' application for G.P.P. for this pool has been approved by the Alberta Energy and Utilities Board. As a result, Cyries expects to reach over 12,500 boe per day in production in the second quarter of 2007.

Current production has grown about 900 per cent since the inception of the company in July 2004.

Approximately 78 per cent of Cyries' production in 2006 was natural gas, however, with several new oil projects to come on stream in 2007 we expect oil production to increase to about 30 per cent of total production in 2007.

The company drilled 61 gross wells (48.7 net) during 2006, resulting in 42 gas wells (34.9 net) and 12 oil wells (8.9 net).

Undeveloped land increased to approximately 391,000 net acres, an increase of approximately 127 per cent from December 31, 2005.

Reserves

Proved reserves at December 31, 2006 were 19.6 million barrels of oil equivalent, compared with 15.1 million barrels of oil equivalent at December 31, 2005, an increase of 30 per cent.

Proved plus probable reserves at December 31, 2006 were 26.1 million barrels of oil equivalent, compared with 21.1 million barrels of oil equivalent at December 31, 2005, an increase of 24 per cent.

In 2006 production was replaced 2.5 times on a proved basis and 2.7 times on a proved plus probable basis.

About 85 per cent of proved reserves are currently producing and 75 per cent of probable reserves are associated with reserves that are currently producing.

The reserves data set forth below (the "Reserve Data") is based upon an evaluation by GLJ Petroleum Consultants ("GLJ") with an effective date of December 31, 2006 and dated March 6, 2007 ("GLJ Report") in accordance with National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities. The Reserves Data summarizes our crude oil, natural gas liquids and natural gas reserves and the net present values of future net revenue for these reserves using constant prices and costs and forecast prices and costs.



Oil and Gas Reserves
Based on Constant Prices and Costs

Light,
Medium and Natural Gas
Heavy Oil Natural Gas Liquids Total (mboe)
---------------------------------------------------------
Gross Net Gross Net Gross Net Gross Net
(mbbl) (mbbl) (mmcf) (mmcf) (mbbl) (mbbl) (mbbl) (mbbl)
---------------------------------------------------------

Proved Developed
Producing 3,483 3,094 69,553 50,772 1,158 778 16,234 12,333
Proved Developed
Non-Producing 795 518 10,024 7,582 165 112 2,630 1,894
Proved Undeveloped 78 70 3,760 2,680 20 12 725 529
---------------------------------------------------------
Total Proved 4,356 3,682 83,337 61,034 1,343 902 19,589 14,756
Total Probable 1,189 1,029 29,328 22,047 397 266 6,474 4,970
---------------------------------------------------------
Total Proved Plus
Probable 5,545 4,711 112,665 83,081 1,740 1,168 26,063 19,726
---------------------------------------------------------
---------------------------------------------------------


Net Present Values of Future Net Revenue
Based on Constant Prices and Costs

Before Deducting Income Taxes
Discounted At

--------------------------------------------
0% 5% 10% 15% 20%
($000) ($000) ($000) ($000) ($000)
--------------------------------------------
Proved Developed Producing 369,819 300,720 255,835 224,254 200,735
Proved Developed Non-Producing 63,269 53,739 47,089 42,165 38,349
Proved Undeveloped 7,856 6,006 4,625 3,569 2,744
--------------------------------------------
Total Proved 440,944 360,465 307,549 269,988 241,828
Total Probable 141,172 91,002 66,341 51,991 42,662
--------------------------------------------
Total Proved Plus Probable 582,116 451,467 373,890 321,979 284,490
--------------------------------------------
--------------------------------------------

After Deducting Income Taxes
Discounted At

---------------------------------------------
0% 5% 10% 15% 20%
($000) ($000) ($000) ($000) ($000)
---------------------------------------------
Proved Developed Producing 339,958 278,309 238,164 209,810 188,608
Proved Developed Non-Producing 43,436 36,965 32,462 29,136 26,562
Proved Undeveloped 5,403 3,895 2,785 1,946 1,297
--------------------------------------------
Total Proved 388,797 319,169 273,411 240,892 216,467
Total Probable 98,640 62,874 45,506 35,449 28,925
--------------------------------------------
Total Proved Plus Probable 487,437 382,043 318,917 276,341 245,392
---------------------------------------------
---------------------------------------------


Oil and Gas Reserves
Based on Forecast Prices and Costs

Light,
Medium and Natural Gas
Heavy Oil Natural Gas Liquids Total (mboe)
---------------------------------------------------------
Gross Net Gross Net Gross Net Gross Net
(mbbl) (mbbl) (mmcf) (mmcf) (mbbl) (mbbl) (mbbl) (mbbl)
---------------------------------------------------------
Proved Developed
Producing 3,429 3,043 69,925 51,102 1,161 780 16,244 12,340
Proved Developed
Non-Producing 789 512 10,033 7,591 164 112 2,625 1,890
Proved Undeveloped 78 70 3,777 2,696 20 12 728 531
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Total Proved 4,296 3,625 83,735 61,389 1,345 904 19,597 14,761
Total Probable 1,170 1,012 29,564 22,262 398 267 6,496 4,989
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Total Proved Plus
Probable 5,466 4,637 113,299 83,651 1,743 1,171 26,093 19,750
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---------------------------------------------------------


Net Present Values of Future Net Revenue
Based on Forecast Prices and Costs

Before Deducting Income Taxes
Discounted At

--------------------------------------------
0% 5% 10% 15% 20%
($000) ($000) ($000) ($000) ($000)
--------------------------------------------
Proved Developed Producing 461,261 365,847 306,934 266,856 237,673
Proved Developed Non-Producing 77,659 64,524 55,690 49,346 44,548
Proved Undeveloped 11,863 9,284 7,381 5,937 4,815
--------------------------------------------
Total Proved 550,783 439,655 370,005 322,139 287,036
Total Probable 205,728 122,527 85,683 65,625 53,121
--------------------------------------------
Total Proved Plus Probable 756,511 562,182 455,688 387,764 340,157
--------------------------------------------
--------------------------------------------

After Deducting Income Taxes
Discounted At

--------------------------------------------
0% 5% 10% 15% 20%
($000) ($000) ($000) ($000) ($000)
--------------------------------------------
Proved Developed Producing 403,409 323,629 273,936 239,845 214,838
Proved Developed Non-Producing 53,290 43,976 37,729 33,258 29,888
Proved Undeveloped 8,166 6,152 4,680 3,572 2,716
--------------------------------------------
Total Proved 464,865 373,757 316,345 276,675 247,442
Total Probable 143,141 84,650 58,865 44,856 36,133
--------------------------------------------
Total Proved Plus Probable 608,006 458,407 375,210 321,531 283,575
--------------------------------------------
--------------------------------------------


Summary of Pricing and Inflation Rate

Light and Medium Crude Oil Natural Gas
---------------------------------------------------------

Edmonton
WTI Par Price Cromer Medium AECO
Cushing 40 degrees 29.3 degrees C-Spot Gas
Oklahoma API API Price
Period ($US/bbl) ($Cdn/bbl) ($Cdn/bbl) ($Cdn/bbl)

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2003 31.07 43.66 37.55 6.66
2004 41.38 52.96 45.75 6.88
2005 56.58 69.11 56.62 8.58
2006 (estimate) 66.22 73.16 62.24 7.02
2007 Q1 62.00 70.25 61.25 7.00
2007 Q2 62.00 70.25 61.25 6.95
2007 Q3 62.00 70.25 61.25 6.95
2007 Q4 62.00 70.25 61.25 7.85

2007 Full Year 62.00 70.25 61.25 7.20

2008 60.00 68.00 59.25 7.45
2009 58.00 65.75 57.25 7.75
2010 57.00 64.50 56.00 7.80
2011 57.00 64.50 56.00 7.85
2012 57.50 65.00 56.50 8.15
2013 58.50 66.25 57.75 8.30
2014 59.75 67.75 59.00 8.50
2015 61.00 69.00 60.00 8.70
2016 62.25 70.50 61.25 8.90
2017 63.50 71.75 62.50 9.10
2018 +2%/yr +2%/yr +2%/yr +2%/yr

Natural Gas
Liquids Inflation Rate Exchange Rate
-----------------------------------------------

Edmonton
Pentanes Plus
Period ($Cdn/bbl) %/year $US/$Cdn

---------------------------------------------------------------------------

2003 44.23 2.8 0.721
2004 54.07 1.8 0.768
2005 69.47 2.2 0.825
2006 (estimate) 75.69 2.1 0.882
2007 Q1 71.75 2.0 0.870
2007 Q2 71.75 2.0 0.870
2007 Q3 71.75 2.0 0.870
2007 Q4 71.75 2.0 0.870

2007 Full Year 71.75 2.0 0.870

2008 69.25 2.0 0.870
2009 67.00 2.0 0.870
2010 65.75 2.0 0.870
2011 65.75 2.0 0.870
2012 66.25 2.0 0.870
2013 67.50 2.0 0.870
2014 69.00 2.0 0.870
2015 70.50 2.0 0.870
2016 72.00 2.0 0.870
2017 73.25 2.0 0.870
2018 +2%/yr 2.0 0.870


Reconciliation of
Reserves by Principal Product Type
Based on Forecast Prices and Costs

Light, Medium and Conventional Natural Gas
Heavy Oil and Coal Bed Methane
---------------------------------------------------------

Proved
Plus Net Net Net
Proved Probable Probable Proved Probable Proved
(mbbl) (mbbl) (mbbl) (mmcf) (mmcf) (mmcf)
---------------------------------------------------------
At December 31,
2005 2,681 1,104 3,785 69,180 27,071 96,251
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---------------------------------------------------------

Extensions 1,038 152 1,190 20,834 5,438 26,272
Improved Recovery 7 2 9 1,272 233 1,505
Technical Revisions (101) (370) (471) 8 (5,854) (5,846)
Discoveries - - - 963 320 1,283
Acquisitions (net
of dispositions) 1,142 278 1,420 6,149 3,006 9,155
Economic factors 12 5 17 31 27 58
Production (483) - (483) (13,787) - (13,787)
---------------------------------------------------------
At December 31,
2006 4,296 1,171 5,467 84,650 30,241 114,891
---------------------------------------------------------
---------------------------------------------------------

Natural Gas Liquids Total
---------------------------------------------------------

Proved Proved
Plus Plus
Proved Probable Probable Proved Probable Probable
(mbbl) (mbbl) (mbbl) (mbbl) (mbbl) (mbbl)
---------------------------------------------------------
At December 31,
2005 908 397 1,305 15,119 6,013 21,132
---------------------------------------------------------
---------------------------------------------------------
Extensions 595 107 702 5,105 1,166 6,271
Improved Recovery 20 3 23 239 43 282
Technical Revisions (108) (141) (249) (207) (1,488) (1,695)
Discoveries 28 9 37 189 63 252
Acquisitions (net
of dispositions) 76 23 99 2,092 690 2,782
Economic factors - - - 17 9 26
Production (174) - (174) (2,955) - (2,955)
---------------------------------------------------------
At December 31,
2006 1,345 398 1,743 19,599 6,496 26,095
---------------------------------------------------------
---------------------------------------------------------


Reserve Addition Costs

Finding,
Change in Development
Future and
Capital Development Total Reserve Acquisition
(000's) Costs Costs Costs Additions Costs
---------------------------------------------------------------------------
Including the effect
of acquisitions
Proved 207,411 3,882 211,293 7,439 28.40
Proved plus probable 207,411 2,451 209,862 7,924 26.48

Excluding the effect
of acquisitions
Proved 144,604 1,835 146,439 5,289 27.69
Proved plus probable 144,604 (346) 144,258 5,069 28.46
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Reserve addition costs for 2006 (including the change in future development capital) were $28.40 per barrel of oil equivalent proved and $26.48 per barrel of oil equivalent proved plus probable. Excluding changes in future development capital, reserve addition costs were $27.88 per barrel of oil equivalent proved and $26.17 per barrel of oil equivalent proved plus probable.

Financial

Revenue for the year ended December 31, 2006, was $139.2 million, a 44 per cent increase compared with $96.4 million during the prior year.

Funds generated from operations were $69.7 million ($1.55 per share diluted) compared with $50.9 million ($1.40 per share diluted) for the prior year. This represents a 37 per cent increase and a 11 per cent increase on a per share basis.

Operating netbacks were $26.31 per boe in 2006 compared to $36.93 in 2005.

Net earnings for the year were $9.4 million (21 cents per share diluted), compared with $14.8 million (41 cents per share diluted) for the prior year.

Capital expenditures were $207.4 million in 2006 compared with $226.8 million in 2005. Approximately $144.6 million was spent on the exploration and development program, including $10.0 million on land and $40.8 million on facilities. Approximately $62.8 million was spent on acquisitions.

Total debt including working capital was $112.0 million at December 31, 2006, compared with $73.2 the prior year.

Exploration

In 2006 approximately 62 per cent of Cyries' drilling program was concentrated in the Deep Basin/Peace River Arch area of northwestern Alberta. Thirty-eight (38) gross (27.0 net) wells were drilled in this area.

The Deep Basin and Peace River Arch continue to be the main drilling focus of the company. The company is attracted to the area due to its characteristics of having medium-depth drilling target, multi-zone nature and primarily natural gas potential. The company's technical expertise allows it to exploit its large existing undeveloped land base of over 124,000 net acres.

One of Cyries' highlights in this area in 2006/07 is the Gold Creek Halfway oil pool. Through a combination of drilling and acquisitions, Cyries has built this pool from virtually no production in 2005 to an approved waterflood and with anticipated production of over 2,000 boe of production by April 2007. Reserves assigned to the pool at year end were about 1.7 million barrels of light oil, we expect to have additional reserves assigned to the pool in future as the recovery factor increases due to the waterflood program. We have received Good Production Practice and expect to have increased production from this pool in April, 2007.

Our drilling program in the Deep Basin for 2007 will continue to target high impact gas locations primarily in the Halfway, Falher, Gething and Charlie Lake horizons.

At our Rainbow Lake property we have pursued a winter drilling program targeting primarily Keg River oil locations and Bluesky gas locations. We have successfully completed 2 Keg River oil wells and 2 Bluesky gas wells and will bring them on production at rates of 30 -150 boe per day. Cyries' production at Rainbow will be complemented by a production acquisition which should close just prior to the second quarter. This acquisition will add about 400 boe per day of light oil and natural gas production, consolidating working interests in existing Cyries' wells. With positive results from winter drilling our activity is expected to increase at Rainbow in 2007.

At our Hotchkiss property we drilled 3 successful wells during the winter program, with the most significant coming on production in March at over 1 mmcf per day of gas. We expect to conduct a more significant development drilling program on this property in 2007/2008.

We also expect to drill 2 - 3 potentially high impact oil locations this summer at our Judy Creek property. A 3-D seismic program was shot and interpreted prior to the end of 2006, leading to 6 potential drilling locations, targeting the Swan Hills formation. Similar opportunities along this trend will be pursued in 2007.

Boundary Lake represents an emerging core area for Cyries. Opportunities developed here have multi zone potential and year round access. To date Cyries has participated in the drilling of 7 wells in the Boundary Lake area with a success rate of 85 per cent and currently has production of more than 550 boe per day. The Dual acquisition significantly added to our land base at Boundary. We expect to drill an additional 5 wells here prior to year end.

Acquisitions

On December 1, 2006 Cyries completed the acquisition of Dual Exploration. Dual's production at the time of the acquisition was about 1,000 boe per day.

The acquisition of Dual allowed Cyries to increase its working interest in the Halfway oil pool wells at Gold Creek, as well as consolidate working interests in several other pools. In the Halfway pool Cyries has a total of 7 wells capable of production, and is expected to increase production in April 2006 to rates of up to 2,000 barrels per day of high quality oil.

Outlook

We believe that Cyries is very well positioned for current market conditions. We will have consistent production growth over the first two quarters of this year. Cyries will grow production by approximately 15 per cent in each of the first and second quarters of 2007, with anticipated production of over 12,500 boe per day in the second quarter. Annual production is expected to average 12,000 boe per day with an exit range of over 13,000 - 13,500 boe per day.

Cyries has a strong balance sheet, we can execute on both property and corporate acquisitions as well as continue to internally fund a strong drilling program. We expect to spend between $140 - 160 million in capital in 2007, excluding acquisitions, which will be funded by cash flow and debt.

In addition, our view is that the opportunity base to fuel the growth of Cyries is stronger today than it has been in some time. Drilling costs are starting to decline and acquisition opportunities are more plentiful and less costly. In addition the capital markets have become more difficult for the oil and gas industry creating opportunity for well financed companies with experienced management teams like Cyries.

Conference Call

A conference call is scheduled to review the 2006 year-end results of Cyries Energy on Tuesday, March 13, 2007 at 9:00 a.m. (MT), 11:00 a.m. (ET). The conference call can be accessed by dialling in 15 minutes prior to the scheduled start at 1-866-507-1212 or 1-416-695-7848. A playback recording of the conference call will be available for seven days and can be accessed by calling 1-888-509-0081 or 1-416-695-5275 (password 641338). A live webcast will be provided on www.cyries.com.

Annual Meeting of Shareholders

The company's annual meeting of shareholders is scheduled for Monday, May 14, 2007 at 3:00 pm to be held in the Devonian Room at the Calgary Petroleum Club, 319 - 5th Avenue SW., Calgary, Alberta.

Cyries Energy Inc. is a publicly traded Canadian energy company involved in the exploration, development and production of natural gas and crude oil in western Canada. Its common shares trade on the TSX under the symbol "CYS".

This news release shall not constitute an offer to sell or the solicitation of any offer to buy securities in any jurisdiction. The Cyries common shares have not been nor will be registered under the United States Securities Act of 1933, and they may not be offered or sold in the United States absent registration or an exemption from registration.

This news release contains forward-looking statements. Forward-looking statements are based on current expectations that involve a number of risks and uncertainties which could cause actual events or results to differ materially from those reflected in this news release. These risks and uncertainties include, among other things, changes in general economic, market and business conditions; changes or fluctuations in production levels, commodity prices, currency exchange rates, capital expenditures, reserves or reserves estimates and debt service requirements; changes in legislation; Cyries' ability to comply with current and future environmental or other laws; Cyries' success at the acquisition, exploitation and development of reserves; actions by governmental or regulatory authorities including increasing taxes or other regulations; and the occurrence of unexpected events involved in the operation and development of oil and gas properties. Forward-looking statements are based on the estimates and opinions of Cyries' management at the time the statements were made. Unless required by applicable law, Cyries assumes no obligation to update forward-looking statements should circumstances or management's estimates change.

MANAGEMENT'S DISCUSSION AND ANALYSIS

This management's discussion and analysis ("MD&A") is dated March 12, 2007 and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2006 and the audited consolidated financial statements and MD&A for the year ended December 31, 2005 and MD&A for the quarters ended March 31, 2006, June 30, 2006 and September 30, 2006. The reader should be aware that historical results are not necessarily indicative of future performance. All values are presented in thousands, other than boe and per share amounts.

BOE presentation - 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").

Non-GAAP Measurements - Cyries evaluates performance based on net income, operating netback and funds generated from operations. Operating netback is a benchmark used in the oil and gas industry to measure the contribution of oil and natural gas sales following the deduction of royalties, production expenses and transportation costs. A calculation of operating netback is included in the MD&A. Working capital deficiency is defined as current assets less current liabilities, excluding any debt presented as a current liability. Funds generated from operations is expressed before changes in non-cash operating working capital and asset retirement expenditures. The Company considers funds generated from operations a key measure as it is used to analyze operations, performance, leverage and liquidity.



The following table reconciles funds generated from operations to cash flow
from operating activities, the most directly comparable GAAP measure:

Year ended
December 31, 2006 December 31, 2005
--------------------------------------------------------------------------
Cash flow from operating activities 73,415 53,061
Net changes in non-cash operating
working capital (3,886) (2,197)
Asset retirement expenditures 197 -
--------------------------------------------------------------------------
Funds generated from operations 69,726 50,864
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Funds generated from operations, operating netback and working capital deficiency do not have a standard meaning prescribed by Canadian Generally Accepted Accounting Principles ("GAAP") and therefore may not be comparable to other companies.

Forward-looking statements - This MD&A contains forward-looking statements. Forward-looking statements are based on current expectations that involve a number of risks and uncertainties that could cause actual events or results to differ materially from those reflected in the MD&A. Forward-looking statements are based on the estimates and opinions of Cyries' management at the time the statements were made.

CORPORATE PROFILE

On July 2, 2004 Cyries was formed as a publicly traded oil and natural gas exploration company through a Plan of Arrangement involving Cequel Energy Inc. and Progress Energy Inc. As part of the Arrangement, Cyries acquired approximately 1,050 boe/d of production and 42,700 net acres of land in the Deep Basin and Peace River Arch areas of Northern Alberta. Cyries retained many of the former directors, officers and employees of Cequel Energy Inc. who as a group continue to own approximately 19 percent of the Company. Cyries is focused primarily on natural gas exploration and implements a growth strategy that includes both an active drilling program and strategic acquisitions.

From inception through December 2004 the Company focused on drilling opportunities in the Deep Basin and increased production to 2,200 boe/d by year end. Capital spending for the six month period totaled $32,600 and was financed through cash flow and a bought deal private placement of 4,000 shares at $5.50 per share in July 2004.

The 2005 capital expenditure program saw the company drill 42.9 net wells and increase its undeveloped acreage to 172,497 net acres. The capital expenditure program totaled $101,000 dollars and was financed through cash flow, bank debt and a bought deal private placement of 2,440 shares at $8.20 per share in February 2005.

In 2005 the Company completed two corporate acquisitions. On July 1, 2005, Cyries acquired Devlan Exploration Inc. in exchange for 8,558 Cyries common shares and the assumption of approximately $22,500 in debt. The acquisition added approximately 2,300 boe/d of production, increased the Company's asset base in the Deep Basin and added new core areas in the Rainbow Lake, Marten Hills and Judy Creek areas of Alberta.

On August 12, 2005 Cyries completed the $57,000 acquisition of a privately owned oil and gas company. The acquisition was financed through a bought-deal private placement of 4,017 shares at $12.45 per share. The acquisition increased production by approximately 1,300 boe/d and added new core areas in the Hotchkiss and Boundary Lake areas of Alberta.

In December 2005, after just 18 months of activity, Cyries had increased production five-fold to 6,800 boe/d. Based on the Company's success to date and high oil and natural gas prices, Cyries expanded the 2006 capital expenditure program to $152,000 highlighted by drilling 48.6 net wells and increasing the undeveloped land acreage to 391,397. Drilling was focused in the Deep Basin but continued to branch out to the areas acquired through the acquisitions of 2005.

The 2006 capital expenditure program was partly financed by the November 2006 equity offering of 2,530 common shares at $12.50 per share and the July 2006 flow through share financing of 602 CDE flow-through shares at $11.60 per share and 1,225 CEE flow-through shares at $13.10 per share.

In December 2006, the company was successful in completing another corporate acquisition, purchasing Dual Exploration Inc. for 5,767 Cyries common shares and the assumption of approximately $8,500 in net debt. The acquisition added approximately 1,100 boe/d of production and consolidated Cyries interest in a number of properties, most notably the Gold Creek Halfway oil discovery made jointly with Dual in early 2006.

Successful drilling and acquisition activity in 2006 increased Cyries' average 2006 production to 8,096 and proved reserves to 19,597 mboe, increases of 671 and 868 percent, respectively in the 30 month history of Cyries. Cyries' strategy remains unchanged for 2007. The company expects to implement a drilling and exploration program of $140,000 to $160,000 and will continue to pursue strategic acquisitions.



Summary

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Year ended Year ended
($000s, except per share data) December 31, December 31,
2006 2005
---------------------------------------------------------------------------

Net income 9,356 14,832
Net income per share - basic 0.23 0.46
Net income per share - diluted 0.21 0.41

Funds generated from operations 69,726 50,864
Funds generated from operation
per share - basic 1.70 1.58
Funds generated from operations
per share - diluted 1.55 1.40

Total assets 542,053 364,230
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The year was highlighted by a successful drilling program coupled with the completion of a strategic acquisition in the year which resulted in an increase in the total asset base and an increase in funds generated from operations. Net income per share decreased 50 percent to $0.23 per share for 2006 compared with $0.46 in 2005 primarily due to a reduction in natural gas prices and an increase in depletion and stock compensation expense.

During the year, Cyries executed a $151,963 capital program and completed a corporate acquisition for total consideration of $55,448. Drilling success and production added through acquisition increased average production to 8,096 boe per day in 2006 from 4,311 boe per day in 2005.



DETAILED FINANCIAL ANALYSIS

Petroleum and natural gas production

Year ended Year ended
December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
Oil (bbls/d) 1,324 772
Natural gas (mcf/d) 37,772 19,905
Natural gas liquids (bbls/d) 476 221
---------------------------------------------------------------------------
Total (boe) 8,096 4,311
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Production for 2006 increased 88 percent to 8,096 boe/d from 4,311 boe/d in 2005. Natural gas production in 2006 increased to 37,772 mcf/d compared to 19,905 mcf/d for 2005. Oil and liquids production for 2006 increased to 1,800 barrels per day compared to 993 barrels per day for 2005.



Revenue

Year ended Year ended
($000s) December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
Revenue
Oil 32,947 18,091
Natural gas 96,344 73,867
Natural gas liquids 9,870 4,457
---------------------------------------------------------------------------
Total 139,161 96,415

Average sales price
Oil ($/bbl) 68.16 64.22
Natural gas liquids ($/bbl) 56.76 55.23
---------------------------------------------------------------------------
Average liquids price 65.14 62.21
Natural gas ($/mcf) 6.99 10.17
Total per boe ($/boe) 47.09 61.28

Benchmark pricing
Edmonton par - light oil ($/bbl) 73.35 69.33
AECO-C Spot ($/mcf) 6.53 8.81
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Sales Variance Analysis

---------------------------------------------------------------------------
---------------------------------------------------------------------------
Year ended
($000s) December 31, 2006
---------------------------------------------------------------------------
Natural Gas Sales
---------------------------------------------------------------------------
Volume increase 66,302
Price decrease (43,825)
---------------------------------------------------------------------------
Net gas sales change 22,477
---------------------------------------------------------------------------
Crude Oil and NGLs sales
Volume increase 18,344
Price increase 1,925
---------------------------------------------------------------------------
Net crude oil and NGLs sales change 20,269
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Combined sales change 42,746
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Revenues for the year ended December 31, 2006 increased 44 percent to $139,161 from $96,415 in the comparative period. The increase in revenue is a result of the 88 percent growth in production volumes from prior year. The impact of increased production was offset by a decrease in average sales price that was consistent with the changes in benchmark oil and natural gas prices. In 2006 the AECO-C spot natural gas reference price averaged $6.53 per mcf compared to $8.81 per mcf in 2005 while the crude oil reference price increased six percent in the year to average $73.35. As Cyries production is 78 percent natural gas, the Company is more sensitive to fluctuations in natural gas prices than changes in crude oil prices and the overall price realized in 2006 decreased by 23 percent.

The Company did not hedge or enter into any fixed price arrangements for the year ended December 31, 2006. All the Company's production is sold on the spot market. Therefore, both the historical prices received and future prices expected fluctuate with the prevailing market prices of crude oil and natural gas.

The average sales price for natural gas is at a premium to the AECO-C spot price due to the high energy content of the company's natural gas production.

Royalties

Oil and natural gas royalties, net of the Alberta Royalty Tax Credit ("ARTC") increased to $32,671 for 2006 compared to $23,749 for 2005. The increase in royalties is due to higher petroleum and natural gas sales. The overall royalty rate as a percentage of revenue was 24 percent of revenue in 2006 compared to 25 percent in 2005. The Company expects the royalty rate to remain consistent in 2006. The ARTC for 2006 increased to $419 from $114 for 2005. The Company will not receive ARTC in the future as the program has been terminated by the Alberta provincial government.



Operating Netback and Production Expense
---------------------------------------------------------------------------
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Year ended Year ended
($000s) December 31, 2006 December 31, 2005
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Revenue 139,161 96,415
Royalty income 117 84
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139,278 96,499
Royalties (32,671) (23,749)
Production expense (net) (24,362) (11,989)
Transportation expense (4,503) (2,663)
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Operating netback 77,742 58,098
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Operating netback per boe 26.31 36.93
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---------------------------------------------------------------------------
---------------------------------------------------------------------------
Year ended Year ended
($000s) December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
Production expense gross 26,953 13,563
Overhead recoveries (1,763) (1,075)
Processing income (828) (499)
---------------------------------------------------------------------------
Production expense (net) 24,362 11,989
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Production expense per boe (net) 8.24 7.62
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Net production expenses increased to $24,362 or $8.24 per boe from $11,989 or $7.62 for the prior year. Production costs per barrel increased eight percent to $8.24 from $7.62 due to the continued increase in the costs of labour and supplies.

The operating netback decreased to $26.31 per boe from $36.93 per boe due primarily to a decrease in average sales prices of 23 percent.

Transportation expense relates primarily to the cost of transporting natural gas on the main natural gas pipelines and a lesser amount for clean oil trucking charges. An increase in production volumes caused an increase in transportation costs to $4,503 from $2,663 for the year ended December 31, 2005.



General and Administrative Expenses

Year ended Year ended
($000s) December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
General and administrative expense
(gross) 5,640 4,278
Overhead recoveries (1,868) (1,276)
---------------------------------------------------------------------------
General and administrative expense (net) 3,772 3,002
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General and administrative ($/boe) 1.28 1.91
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General and administrative costs ("G&A") include costs incurred by the Company which are not directly associated with the production of oil and natural gas. For the year ended December 31, 2006, G&A was $3,772 compared to $3,002 in 2005. G&A has increased as the overall size of the business has grown; however, measured on a per barrel basis, the expense has decreased 33 percent to $1.28 per boe as a result of increased production volumes in 2006. The Company does not capitalize corporate general and administrative expenses.

Depreciation, Depletion and Accretion

Depletion, depreciation and accretion ("DD&A") increased to $54,589 for 2006 compared to $23,840 for 2005. The increase is due to higher average production in 2006 and an increase in DD&A per boe. DD&A expense per boe increased to $18.47 from $15.15 for the comparative period as a result of increased finding and development costs associated with acquisitions and drilling in the current year. In determining the Company's depletion and depreciation, $24,521 (2005 - $18,715) of costs related to unproven properties and $16,500 (2005 - $13,375) of estimated salvage value was excluded from the costs subject to depletion. Future development costs required to complete wells for which proved reserves have been assigned of $14,482 (2005 - $10,600) were added to the Company's net book value in the depletion calculation.

Stock Based Compensation

Stock-based compensation expense related to the outstanding stock options and Class B performance shares increased to $4,992 from $2,172 for the year ended December 31, 2005. The increase in stock compensation expense is due to the expense associated with the stock options issued in 2006. At December 31, 2006, 3,799 stock options and 552 performance shares were outstanding compared to 1,672 and 599, respectively, at December 31, 2005.

Income Taxes

For the year ended December 31, 2006 the Company recorded future income tax of $988 (2005 - $10,020) and a current income tax recovery of $80 (2005 - expense of $2,972) for an overall effective tax rate of nine percent (2005 - 47 percent). The decrease in the effective tax rate resulted from recoveries of future income tax of $3,050 as a result of reductions in the Alberta and Federal corporate income tax rates for the current and future years.

Income tax expense also includes two adjustments resulting from Canada Revenue Agency audits of predecessor companies. A net reduction to current income tax expense of $290 includes an estimated liability of $521 related to an ongoing audit and an $811 reduction of a previously estimated liability following the completion of audit.

The remaining current tax expense of $299 is due to provincial capital taxes and income taxes of a subsidiary.

The Company does not expect significant income taxes in 2007 based on current oil and natural gas prices and the planned capital expenditures for 2007.

The estimated consolidated tax pools at December 31, 2006 are included in the table below. The tax pools as presented include reductions of $9,766 for the CEE flow-through expenditures incurred for 2006 and $6,988 for the CDE flow-through expenditures incurred for 2006.



---------------------------------------------------------------------------
---------------------------------------------------------------------------
($000s) December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
Canadian exploration expense 20,912 12,210
Canadian development expense 80,309 44,825
Canadian oil and gas property expense 70,494 46,428
Foreign exploration and development
expense 723 632
Undepreciated capital cost 79,983 44,403
Share issue costs 7,598 5,601
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On March 2, 2005, Devlan issued flow-through shares and committed to spend $2,250 before December 31, 2005 on expenditures qualifying as Canadian exploration expenditures. Flow-through expenditures on Canadian exploration expenses were renounced to subscribers of the flow-through common shares in February 2006 effective December 31, 2005. The related income tax impact of $762 was recorded in the first quarter of 2006.

On July 6, 2006, the Company issued 1,225 flow-through common shares at a price of $13.10 per share for proceeds of $16,048. In addition to the CEE Flow-Through Share issuance, certain directors, officers and employees of the Company together with certain other persons or companies have purchased 602 CDE flow-through shares at a price of $11.60 for proceeds of $6,988. At December 31, 2006, the total flow-through commitment for the CDE and $9,766 of the CEE commitment had been spent.

As part of the Dual acquisition, Cyries inherited a CEE flow-through share commitment of $5,001. The qualifying CEE expenditures will be incurred in 2007.

In March 2007 the Company entered into an agreement to issue 443 CEE flow-through shares at a price of $13.55 per share and approximately 524 CDE flow-through shares at a price of $11.45 per share for aggregate gross proceeds of approximately $12,000. The qualifying expenditures are expected to be incurred in 2007.

In aggregate, Cyries has an outstanding CEE flow through obligation of $17,283 and a CDE obligation of $6,000.



Capital Expenditures

Year ended Year ended
($000s) December 31, 2006 December 31, 2005
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Corporate acquisitions 55,474 125,229
Land acquisitions 10,013 12,173
Property acquisitions (net) 7,333 346
Geological and geophysical 6,349 4,946
Drilling and completions 87,341 68,827
Equipment and facilities 40,765 15,220
Other 136 79
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Total capital expenditures 207,411 226,820
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For the year ended December 31, 2006, capital expenditures totaled $207,411 a decrease of 9 percent from prior year. In 2006, drilling expenditures were $87,341 as Cyries drilled 61.0 gross wells (48.7 net) with a 90 percent success rate. Of the total wells drilled, 42.0 (34.9 net) were natural gas wells, 12.0 (8.9 net) were oil wells and 7.0 (4.9 net) were unsuccessful. Facility expenditures of $40,765 for the year relate primarily to four compressor stations, the construction of an oil battery and the costs associated with connecting successful wells to existing infrastructure and processing facilities.

Corporate acquisitions in 2006 includes the acquisition of Dual Exploration Inc. The amount assigned to property, plant and equipment of $55,448 is based on the estimated fair value of the assets acquired. Corporate acquisitions of $125,229 in 2005 include fair value assigned to the property, plant and equipment for the Devlan and 1181608 Alberta ULC acquisitions of $70,512 and $54,717, respectively.



Drilling Results
Year ended Year ended
December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
Gross wells Net wells Gross wells Net wells
---------------------------------------------------------------------------
Gas 42.0 34.9 41.0 29.1
Oil 12.0 8.9 11.0 5.0
Dry 7.0 4.9 12.0 8.8
---------------------------------------------------------------------------
Total 61.0 48.7 64.0 42.9
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Success (%) 90% 80%
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Share Capital
---------------------------------------------------------------------------
(000s)
---------------------------------------------------------------------------
Weighted average common shares
outstanding at December 31, 2006
Basic 41,015
Diluted 44,995
Outstanding Securities at March 12, 2007
Common shares 49,513
Warrants 3,944
Performance shares 552
Stock options 3,827
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Total outstanding securities at March 12, 2007 57,836
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Equity Issues

Price per
Date of Share of Shares Gross
Issue Issue Issued Proceeds
--------------------------------------------------------------------------
Common shares June 28, 2004 $ 1.27(i) 3,988 $ 5,065
Common shares July 28, 2004 $ 5.50 4,000 22,000
Common shares February 3, 2005 $ 8.20 2,440 20,008
Common shares -
Acquisition
of Devlan July 1, 2005 $ 9.52 8,558 81,469
Common shares August 12, 2005 $ 12.45 4,017 50,005
CEE Flow-through
common shares July 6, 2006 $ 13.10 1,225 16,048
CDE Flow-through
common shares July 6, 2006 $ 11.60 602 6,988

Common shares November 8, 2006 $ 12.50 2,530 31,625
Common shares -
Acquisition
of Dual November 30, 2006 $ 10.72 5,767 61,826
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Total 33,127 $ 295,034
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(i) For accounting, the issue price of $1.63 was allocated to both the
common share ($1.27) and the accompanying warrant ($0.36).


On June 28, 2004 the Company issued 3,988 common shares and 3,988 warrants in an initial private placement of its common shares at a price of $1.63 per common share. Both the shares and warrants are subject to vesting provisions. One third of the common shares purchased in the private placement became eligible for resale on each of December 31, 2004, June 28, 2005 and June 28, 2006.

Each warrant is exercisable into one common share of the Company at a price of $1.63 per share until the warrants expire on June 28, 2008. All of the warrants vest annually subject to certain performance clauses, with the initial tranche having vested June 28, 2005. The remaining warrants have vested or will vest on their respective anniversary dates as the Cyries common shares traded at a 20-day weighted average price of at least $3.26.

In conjunction with the initial private placement, 605 performance shares were issued to employees and directors for consideration of $0.01 per share. The performance shares vest equally over three years and are convertible into the fraction of a common share equal to the closing trading price of the common shares on the Toronto Stock Exchange on the day prior to such conversion less $1.63, if positive, divided by the common share closing price.

During the year, the company issued 2,204 stock options to employees and directors. The options vest over four years and are exercisable into common shares at an average price of $13.34. At December 31, 2006 the Company had 3,799 options outstanding with an average exercise price of $12.06.

On July 6, 2006, the Company issued 1,827 flow-through common shares of which 1,225 flow-through common shares relate to Canadian exploration expenses ("CEE Flow-Through Shares") and 602 flow-through common shares relate to Canadian development expenditures ("CDE Flow-Through Shares"). The CEE Flow-Through Shares were issued at a price of $13.10 per share for proceeds of $16,048, while the CDE Flow-Through Shares were issued at a price of $11.60 for proceeds of $6,988. CEE Flow-Through Shares will be entitled to renunciation of Canadian exploration expenses from the Company, whereas purchasers of the CDE Flow-Through Shares will be entitled to renunciation of Canadian development expenses from the Company.

On November 8, 2006, the Company issued, by way of a short form prospectus, 2,530 common shares at a price of $12.50 per share for total proceeds of $31,625. The offering included 330 common shares, which were issued upon exercise, in full, of an over-allotment option which was granted by Cyries to the underwriters.

On March 7, 2007, Cyries announced that it entered into a letter of intent with a director of Cyries and an investment company to issue on a private placement basis 443 CEE flow-through shares at a price of $13.55 per share and approximately 524 CDE flow-through shares at a price of $11.45 per share for aggregate gross proceeds of approximately $12,000. The purchasers of CEE flow-through shares will be entitled to renunciations of Canadian exploration expenses in an amount equal to the subscription amount from Cyries, while purchasers of the CDE flow-through shares will be entitled to renunciations of Canadian development expenses in an amount equal to the subscription amount from Cyries. The completion of the private placements are subject to Cyries receiving all necessary regulatory approvals. The private placement is expected to close on March 14, 2007.

Liquidity and Capital Resources

At December 31, 2006, the Company had bank debt of $79,867 and a working capital deficiency of $32,067. The Company's bank lines are limited to $145 million. The Company's bank line is subject to semi-annual review with the next review occurring in April 2006.

The 2007 capital program of approximately $140,000 to $160,000 and will be funded through a combination of cash flow from operations, proceeds of the March flow through share issue and bank debt. The growth in production has increased the Company's ability to fund the capital program with internally generated cash flow. However, fluctuations in crude oil and natural gas prices will have a large impact on the Company's capital program and working capital position. The Company will monitor the capital program with the current price outlook and adjust it accordingly.

Commodity prices and production volumes have the largest impact on the ability for Cyries to generate adequate cash flow to meet all its obligations. A prolonged decrease in commodity prices would negatively affect cash flow from operations and would also likely result in a reduction in the amount of bank loan available. If the capital expenditure program does not result in sufficient additional reserves and/or production it would likely have a negative impact on the Company's ability to carry out its planned capital program.

Cyries may adjust its capital expenditure program depending on the commodity price outlook. The Company believes that internally generated cash flow and incremental bank debt should be sufficient to finance current operations and planned capital spending in the next year.



Quarterly Financial and Operational Information

Q4 Q3 Q2 Q1
2006 2006 2006 2006
---------------------------------------------------------------------------

Average gas price ($/mcf) 7.41 6.06 6.49 8.02
Average liquids price ($/boe) 56.64 70.85 71.90 62.41
Average sales price ($/boe) 47.42 44.42 45.76 50.98
Average production (boe/d) 8,613 7,917 8,172 7,675

Petroleum and natural gas sales 37,571 32,351 34,027 35,212
Royalties 7,933 7,384 7,943 9,411
Operating expenses 7,130 6,024 5,644 5,564
G&A expenses 1,080 909 1,079 704

Funds generated from operations 18,046 15,711 18,337 17,632
Per share basic 0.41 0.38 0.47 0.45
Per share diluted 0.37 0.35 0.42 0.41

Net earnings (14) 1,230 5,891 2,249
Per share basic - 0.03 0.15 0.06
Per share diluted - 0.03 0.14 0.05

Total assets 542,053 437,508 413,143 411,463
Bank debt and working
capital deficiency 111,934 114,765 116,074 114,338



Quarterly Financial and Operational Information
Q4 Q3 Q2 Q1
2005 2005 2005 2005
---------------------------------------------------------------------------
Average gas price ($/mcf) 12.14 9.92 8.14 7.56
Average liquids price ($/boe) 63.61 66.77 57.68 52.70
Average sales price ($/boe) 70.69 61.26 50.77 47.24
Average production (boe/d) 6,522 5,525 2,768 2,368

Petroleum and natural gas sales 42,419 31,140 12,787 10,069
Royalties 11,394 7,125 2,882 2,348
Operating expenses 4,804 3,992 1,755 1,438
G&A expenses 1,115 648 777 462

Funds generated from operations 20,861 17,650 6,857 5,496
Per share basic 0.53 0.47 0.26 0.21
Per share diluted 0.48 0.42 0.22 0.19

Net earnings 5,682 6,101 1,822 1,227
Per share basic 0.14 0.16 0.07 0.05
Per share diluted 0.13 0.15 0.06 0.04

Total assets 364,230 326,177 100,490 94,901
Bank debt and working
capital deficiency 73,220 56,238 18,322 10,654

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Production

Production in the fourth quarter increased nine percent to 8,613 boe per day compared with 7,917 boe per day in the third quarter. The production increase is due to the acquisition of Dual, which contributed to 366 of the increase in volume, and the balance of production was added through drilling.

Petroleum and Natural Gas Sales

Oil and natural gas revenues increased 16 percent in the fourth quarter of 2006 compared to the third quarter of 2006 as production volumes increased and the average oil and natural gas price increased by seven percent.

Royalties

Royalties, net of ARTC, increased seven percent to $7,933 when compared to the third quarter of 2006. As a percentage of sales, royalty rates decreased slightly from 22.8 percent in third quarter to 21.1 percent in the fourth quarter of 2006. The decrease in average royalty rate is due to an increase in ARTC in the quarter.

Operating Expenses

The increase in production volumes, increased supplies and labour and higher than expected third party processing fees increased fourth quarter 2006 operating expenses by 18 percent when compared to the third quarter of 2006. On a per boe basis, operating expenses increased to $9.00 compared to $8.27 per boe in the previous quarter.

General and Administrative Expenses

G&A increased 19 percent when compared to the prior quarter. The increase in G&A is due to the overall increase in the size of the business. G&A was $1.36 per boe in the fourth quarter of 2006 increasing from $1.25 per boe in the third quarter of 2006.

Net Earnings and Cash Flow from Operations

Despite an increase in revenue from the third quarter, fourth quarter net earnings decreased by $1,244 as a result of increased depletion expense and stock compensation expense.

Funds generated from operations increased from prior quarter as a result of increased production volumes and sales price. Funds generated from operations increased 15 percent from the third quarter of 2006.

Total Assets

Total assets increased 24 percent to $542,053 at the end of the fourth quarter of 2006 compared to the prior quarter. The increase is attributable to the Dual acquisition coupled with capital spending in the fourth quarter of 2006. The capital expenditures in fourth quarter of 2006 included $1,198 land acquisitions, $1,105 of net property dispositions, $2,554 of geological and geophysical activities, $23,300 in drilling and completions and $10,128 in equipment and facilities.

Working Capital Deficiency

The bank and working capital deficiency was between $112,000 to $116,000 at the end of each quarterly period in 2006. The company believes that cash flow and the credit line of $145,000 will be sufficient to execute the 2007 capital expenditure program of approximately $140,000 to $160,000. The Company will pursue strategic acquisitions which may require issuing additional common shares and bank debt.

Fluctuations in crude oil and natural gas prices will have a large impact on the Company's capital program and working capital position. The Company will monitor the capital program with the current price outlook and adjust it accordingly.

Critical Accounting Estimates

Oil and Gas Reserves

Full cost accounting depends on the estimated proven reserves which the Company believes to be recoverable from oil and gas properties by applying significant judgments relating to available geological, geophysical, engineering and economic data. Estimates are reviewed and revised as appropriate. Changes in estimates can occur as a result of changes in the economic conditions impacting oil and gas prices and costs as well as additional information becoming available from production performance and development activities.

Depletion and Depreciation

The company uses the full cost method of accounting for exploration and development activities whereby all of the costs associated with these activities are capitalized, whether successful or not. The aggregate of capitalized costs, net of certain costs related to unproved properties, and estimated future development costs is amortized using the unit-of-production method based on estimated proved reserves. Changes in estimated proved reserves or future development costs have a direct impact on depletion and depreciation expense. Certain costs related to unproved properties and major development projects may be excluded from costs subject to depletion until proved reserves have been determined or their value is impaired. These properties are reviewed quarterly to determine if proved reserves should be assigned, at which point they would be included in the depletion calculation, or for impairment, for which any write-down would be charged to depletion and depreciation.

Full Cost Accounting Ceiling Test

Oil and gas assets are evaluated at least annually to determine that the costs are recoverable and do not exceed the fair value of the properties. The costs are assessed to be recoverable if the sum of the undiscounted cash flows expected from the production of proved reserves and the lower of cost and market of unproved properties exceed the carrying value of the oil and gas assets. If the carrying value of the oil and gas assets is not assessed to be recoverable, an impairment loss is recognized to the extent that the carrying value exceeds the sum of the discounted future cash flows from the production of proved and probable reserves and the lower of cost and market of the unproved properties. The cash flows are estimated using the future product prices and costs and are discounted using the risk-free rate. By their nature, these estimates are subject to measurement uncertainty and the impact on the financial statements could be material. Any impairment would be charged as additional depletion and depreciation expense.

Goodwill

Goodwill represents the excess of the purchase price of Dual, Devlan and 1181608 Alberta ULC over the fair value of net assets acquired. Goodwill is assessed for impairment at least annually. If it is determined that the fair value of the assets and liabilities is less than the book value at the time of assessment, an impairment amount is determined by deducting the fair value from the book value and applying it against the book value of goodwill. Any excess of the book value of goodwill over the implied fair value is the impairment amount and will be charged to income in the period of the impairment.

Asset Retirement Obligations

The Company records a liability for the fair value of legal obligations associated with the retirement of long-lived tangible assets in the period in which they are incurred, normally when the asset is purchased or developed. On recognition of the liability there is a corresponding increase in the carrying amount of the related asset and the asset retirement obligation. The total amount of the asset retirement obligation is an estimate based on the Company's net ownership interest in all wells and facilities, the estimated costs to abandon and reclaim the wells and facilities and the estimated timing of the costs to be incurred in future periods. The total amount of the estimated cash flows required to settle the asset retirement obligation, the timing of those cash flows and the discount rate used to calculate the present value of those cash flows are estimates subject to measurement uncertainty. Any change in these estimates would impact the asset retirement liability.

Stock-based Compensation

The Company accounts for stock options using the fair value method whereby stock-based compensation expense is recorded for all options granted with a corresponding increase recorded to contributed surplus. The fair value of the options granted are estimated at the date of grant using the Black-Scholes valuation model. Upon exercise of the stock options, consideration paid by employees or directors together with the amount previously recognized in contributed surplus is recorded as an increase to share capital.

Income Taxes

The determination of the Company's income and other tax liabilities requires interpretation of complex laws and regulations often involving multiple jurisdictions. All tax filings are subject to audit and potential reassessment after lapse of considerable time. Accordingly, the actual income tax liability may differ significantly from the liability estimated or recorded.

Other Estimates

The accrual method of accounting requires management to incorporate certain estimates including estimates of revenues, royalties and production costs as at a specific reporting date but for which actual revenues and costs have not yet been received; and estimates on capital projects which are in progress or recently completed where actual costs have not been received at a specific reporting date.

The Company ensures that the individuals with the most knowledge of the activity are responsible for the estimate. These estimates are then reviewed for reasonableness and past estimates are compared to actual results in order to make informed decisions on future estimates.

RISKS AND UNCERTAINTIES

Exploration, Development and Production Risks

Oil and natural gas exploration involves a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. There is no assurance that expenditures made on future exploration by Cyries will result in new discoveries of oil or natural gas in commercial quantities. It is difficult to project the costs of implementing an exploratory drilling program due to the inherent uncertainties of drilling in unknown formations, the costs associated with encountering various drilling conditions such as over pressured zones and tools lost in the hole, and changes in drilling plans and locations as a result of prior exploratory wells or additional seismic data and interpretations thereof.

The long-term commercial success of Cyries depends on its ability to find, acquire, develop and commercially produce oil and natural gas reserves. No assurance can be given that Cyries will be able to continue to locate satisfactory properties for acquisition or participation. Moreover, if such acquisitions or participations are identified, Cyries may determine that current markets, terms of acquisition and participation or pricing conditions make such acquisitions or participations uneconomic.

Future oil and gas exploration may involve unprofitable efforts, not only from dry wells, but from wells that are productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. Completion of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs. In addition, drilling hazards or environmental damage could greatly increase the cost of operations, and various field operating conditions may adversely affect the production from successful wells. These conditions include delays in obtaining governmental approvals or consents, shut-ins of connected wells resulting from extreme weather conditions, insufficient storage or transportation capacity or other geological and mechanical conditions. While diligent well supervision and effective maintenance operations can contribute to maximizing production rates over time, production delays and declines from normal field operating conditions cannot be eliminated and can be expected to adversely affect revenue and cash flow levels to varying degrees.

In addition, oil and gas operations are subject to the risks of exploration, development and production of oil and natural gas properties, including encountering unexpected formations or pressures, premature declines of reservoirs, blow-outs, cratering, sour gas releases, fires and spills. Losses resulting from the occurrence of any of these risks could have a materially adverse effect on future results of operations, liquidity and financial condition.

Prices, Markets and Marketing of Crude Oil and Natural Gas

Oil and natural gas are commodities whose prices are determined based on world demand, supply and other factors, all of which are beyond the control of Cyries. World prices for oil and natural gas have fluctuated widely in recent years. Any material decline in prices could result in a reduction of net production revenue. Certain wells or other projects may become uneconomic as a result of a decline in world oil prices and natural gas prices, leading to a reduction in the volume of Cyries' oil and gas reserves. Cyries might also elect not to produce from certain wells at lower prices. All of these factors could result in a material decrease in Cyries' future net production revenue, causing a reduction in its oil and gas acquisition and development activities. In addition, bank borrowings available to Cyries are in part determined by the borrowing base of Cyries. A sustained material decline in prices from historical average prices could limit Cyries' borrowing base, therefore reducing the bank credit available to Cyries, and could require that a portion of any existing bank debt of Cyries be repaid.

In addition to establishing markets for its oil and natural gas, Cyries must also successfully market its oil and natural gas to prospective buyers. The marketability and price of oil and natural gas, which may be acquired or discovered by Cyries, will be affected by numerous factors beyond its control. Cyries will be affected by the differential between the price paid by refiners for light quality oil and the grades of oil produced by Cyries. The ability of Cyries to market its natural gas may depend upon its ability to acquire space on pipelines which deliver natural gas to commercial markets. Cyries will also likely be affected by deliverability uncertainties related to the proximity of its reserves to pipelines and processing facilities and related to operational problems with such pipelines and facilities and extensive government regulation relating to price, taxes, royalties, land tenure, allowable production, the export of oil and natural gas and many other aspects of the oil and natural gas business. Cyries has limited direct experience in the marketing of oil and natural gas.

Substantial Capital Requirements; Liquidity

Cyries anticipates that it will make substantial capital expenditures for the acquisition, exploration, development and production of oil and natural gas reserves in the future. If Cyries' revenues or reserves decline, Cyries may have limited ability to expend the capital necessary to undertake or complete future drilling programs. There can be no assurance that debt or equity financing, or cash generated by operations will be available or sufficient to meet these requirements or for other corporate purposes or, if debt or equity financing is available, that it will be on terms acceptable to Cyries. Moreover, future activities may require Cyries to alter its capitalization significantly. The inability of Cyries to access sufficient capital for its operations could have a material adverse effect on Cyries' financial condition, results of operations or prospects.

Cyries' lenders have been provided with security over substantially all of the assets of Cyries. If Cyries becomes unable to pay its debt service charges or otherwise commits an event of default, such as bankruptcy, these lenders may foreclose on or sell Cyries' properties. The proceeds of any such sale would be applied to satisfy amounts owed to Cyries' lenders and other creditors and only the remainder, if any, would be available to Cyries.

Competition

Cyries actively competes for reserve acquisitions, exploration leases, licences and concessions and skilled industry personnel with a substantial number of other oil and gas companies, many of which have significantly greater financial resources than Cyries. Cyries' competitors include major integrated oil and natural gas companies and numerous other independent oil and natural gas companies and individual producers and operators.

The oil and gas industry is highly competitive. Cyries' competitors for the acquisition, exploration, production and development of oil and natural gas properties, and for capital to finance such activities, include companies that have greater financial and personnel resources available to them than Cyries.

Certain of Cyries' customers and potential customers are themselves exploring for oil and natural gas, and the results of such exploration efforts could affect Cyries' ability to sell or supply oil or gas to these customers in the future. Cyries' ability to successfully bid on and acquire additional property rights, to discover reserves, to participate in drilling opportunities and to identify and enter into commercial arrangements with customers will be dependent upon developing and maintaining close working relationships with its future industry partners and joint operators and its ability to select and evaluate suitable properties and to consummate transactions in a highly competitive environment.

Environmental Risks

All phases of the oil and natural gas business present environmental risks and hazards and are subject to environmental regulation pursuant to a variety of international conventions and state and municipal laws and regulations. Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances produced in association with oil and gas operations. The legislation also requires that wells and facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. Compliance with such legislation can require significant expenditures and a breach may result in the imposition of fines and penalties, some of which may be material. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs. No assurance can be given that environmental laws will not result in a curtailment of production or a material increase in the costs of production, development or exploration activities or otherwise adversely affect Cyries' financial condition, results of operations or prospects.

Insurance

Cyries' involvement in the exploration for and development of oil and gas properties may result in Cyries becoming subject to liability for pollution, blow-outs, property damage, personal injury or other hazards. Although Cyries has obtained insurance in accordance with industry standards to address such risks, such insurance has limitations on liability that may not be sufficient to cover the full extent of such liabilities. In addition, such risks may not, in all circumstances be insurable or, in certain circumstances, Cyries may elect not to obtain insurance to deal with specific risks due to the high premiums associated with such insurance or other reasons. The payment of such uninsured liabilities would reduce the funds available to Cyries. The occurrence of a significant event that Cyries is not fully insured against, or the insolvency of the insurer of such event, could have a material adverse effect on Cyries' financial position, results of operations or prospects.

Kyoto Protocol

Canada is a signatory to the United Nations Framework Convention on Climate Change. Canada has ratified the Kyoto Protocol established thereunder. Annex B parties to the Kyoto Protocol, which includes Canada, are required to establish legally binding targets to reduce nation-wide emissions of carbon dioxide, methane, nitrous oxide and other so-called "greenhouse gases". Cyries' exploration and production facilities and other operations and activities emit a small amount of greenhouse gasses which may subject Cyries to legislation in Canada regulating emissions of greenhouse gases. The Government of Canada has put forward a Climate Change Plan for Canada which suggests further legislation to set greenhouse gases emission reduction requirements for various industrial activities, including oil and gas exploration and production. Future Canadian federal legislation, together with provincial emission reduction requirements, such as those proposed in the Climate Change and Emissions Management Act (Alberta), may require the reduction of emissions or emissions intensity from Cyries' operations and facilities. The direct and indirect costs of complying with these emissions regulations may adversely affect the business of Cyries.

Reserve Replacement

Cyries' future oil and natural gas reserves, production, and cash flows to be derived therefrom are highly dependent on Cyries successfully acquiring or discovering new reserves. Without the continual addition of new reserves, any existing reserves Cyries may have at any particular time and the production there from will decline over time as such existing reserves are exploited. A future increase in Cyries' reserves will depend not only on Cyries' ability to develop any properties it may have from time to time, but also on its ability to select and acquire suitable producing properties or prospects. There can be no assurance that Cyries' future exploration and development efforts will result in the discovery and development of additional commercial accumulations of oil and natural gas.

Reliance on Operators and Key Employees

To the extent Cyries is not the operator of its oil and gas properties, Cyries will be dependent on such operators for the timing of activities related to such properties and will largely be unable to direct or control the activities of the operators. In addition, the success of Cyries will be largely dependent upon the performance of its management and key employees. Cyries does not have any key man insurance policies, and therefore there is a risk that the death or departure of any member of management or any key employee could have a material adverse effect on Cyries.

Corporate Matters

To date, Cyries has not paid any dividends on the Cyries Shares and does not anticipate the payment of any dividends on the Cyries Shares for the foreseeable future. Certain of the directors and officers of Cyries are also directors and officers of other oil and gas companies involved in natural resource exploration and development, and conflicts of interest may arise between their duties as officers and directors of Cyries and as officers and directors of such other companies. Such conflicts must be disclosed in accordance with, and are subject to such other procedures and remedies as applicable under the ABCA.

Additional Funding Requirements

Cyries' cash flow from its reserves may not be sufficient to fund its ongoing activities at all times. From time to time, Cyries may require additional financing in order to carry out its oil and gas acquisition, exploration and development activities. Failure to obtain such financing on a timely basis could cause Cyries to forfeit its interest in certain properties, miss certain acquisition opportunities and reduce or terminate its operations. If Cyries' revenues from its reserves decrease as a result of lower oil and natural gas prices or otherwise, it will affect Cyries' ability to expend the necessary capital to replace its reserves or to maintain its production. If Cyries' cash flow from operations is not sufficient to satisfy its capital expenditure requirements, there can be no assurance that additional debt or equity financing will be available to meet these requirements or available on terms acceptable to Cyries.

From time to time Cyries may enter into transactions to acquire assets or the shares of other corporations. These transactions may be financed partially or wholly with debt, which may increase Cyries' debt levels above industry standards. Neither Cyries' articles nor its by-laws limit the amount of indebtedness that Cyries may incur. The level of Cyries' indebtedness from time to time could impair Cyries' ability to obtain additional financing in the future on a timely basis to take advantage of business opportunities that may arise.

Title to Properties

Although title reviews will be done according to industry standards prior to the purchase of most oil and natural gas producing properties or the commencement of drilling wells, such reviews do not guarantee or certify that an unforeseen defect in the chain of title will not arise to defeat the claim of the Corporation which could result in a reduction of the revenue received by the Corporation.

Delays in Business Operations

In addition to the usual delays in payments by purchasers of oil and natural gas to Cyries or to the operators, and the delays by operators in remitting payment to Cyries, payments between these parties may be delayed due to restrictions imposed by lenders, accounting delays, delays in the sale or delivery of products, delays in the connection of wells to a gathering system, adjustment for prior periods, or recovery by the operator of expenses incurred in the operation of the properties. Any of these delays could reduce the amount of cash flow available for the business of Cyries in a given period and expose Cyries to additional third party credit risks. The level of activity in the Canadian oil and gas industry is influenced by seasonal weather patterns. Wet weather and spring thaw may make the ground unstable. Consequently, municipalities and provincial transportation departments enforce road bans that restrict the movement of rigs and other heavy equipment, thereby reducing activity levels. Also, certain oil and gas producing areas are located in areas that are inaccessible other than during the winter months because the ground surrounding the sites in these areas consists of swampy terrain. Seasonal factors and unexpected weather patterns may lead to declines in exploration and production activity and corresponding declines in the demand for the goods and services of Cyries.

Changes in Legislation

The return on an investment in securities of Cyries is subject to changes in Canadian federal and provincial tax laws and government incentive programs and there can be no assurance that such laws or programs will not be changed in a manner that adversely affects Cyries or the holding and disposing of the securities of Cyries.

Income Taxes

The Corporation has filed or will file all required income tax returns and believes that it is in full compliance with the provisions of the Income Tax Act (Canada) and all applicable provincial tax legislation. However, such returns are subject to reassessment by the applicable taxation authority. In the event of a successful reassessment of the Corporation, whether by re-characterization of exploration and development expenditures or otherwise, such reassessment may have an impact on current and future taxes payable.

Assessments of Value of Acquisitions

Acquisitions of oil and gas issuers and oil and gas assets are typically based on engineering and economic assessments made by independent engineers and Cyries' own assessments. These assessments both will include a series of assumptions regarding such factors as recoverability and marketability of oil and gas, future prices of oil and gas and operating costs, future capital expenditures and royalties and other government levies which will be imposed over the producing life of the reserves. Many of these factors are subject to change and are beyond Cyries' control. In particular, the prices of and markets for oil and natural gas products may change from those anticipated at the time of making such assessment. In addition, all such assessments involve a measure of geologic and engineering uncertainty which could result in lower production and reserves than anticipated. Initial assessments of acquisitions may be based on reports by a firm of independent engineers that are not the same as the firm that Cyries uses for its year end reserve evaluations.

Third Party Credit Risk

Cyries is or may be exposed to third party credit risk through its contractual arrangements with its current or future joint venture partners, marketers of its petroleum and natural gas production and other parties. In the event such entities fail to meet their contractual obligations to Cyries, such failures could have a material adverse effect on Cyries and its cash flow from operations.

DISCLOSURE CONTROLS AND INTERNAL CONTROL OVER FINANCIAL REPORTING

As at December 31, 2006 the Chief Executive Officer and Chief Financial Officer evaluated the design and implementation of the Company's internal control over financial reporting. The evaluation was based on the work of Cyries staff with the assistance of a third party specialist. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the design of internal control over financial reporting is sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. It should be recognized that while the Chief Executive Officer and Chief Financial Officer believe the Company's internal controls over financial reporting provide reasonable level of assurance, they do not expect that these controls will prevent all errors and fraud. A control system can only provide reasonable, not absolute, assurance that the objectives of the control system are met.

The preparation of disclosure documents is supported by a set of disclosure controls and procedures under management's responsibility. This control structure was reviewed and the effectiveness of its design and operation was evaluated. The evaluation confirmed the effectiveness of the design and operations of disclosure controls and procedures as at December 31, 2006. The evaluation was conducted in accordance with the requirements of Multilateral Instrument 52-109 of the Canadian Securities Administrators.

Cyries Energy Inc.

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2006



Cyries Energy Inc.
Consolidated Balance Sheets

---------------------------------------------------------------------------
---------------------------------------------------------------------------
December 31, December 31,
($000) 2006 2005
---------------------------------------------------------------------------

Assets
Current assets
Accounts receivable 27,856 28,948
Deposits, prepaid expenses and other
(note 4) 3,100 1,835
---------------------------------------------------------------------------
30,956 30,783

Property and equipment, net (note 5) 420,704 265,013

Goodwill (note 3) 90,393 68,434
---------------------------------------------------------------------------

542,053 364,230
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities 62,127 53,343
Income taxes payable 896 3,411
Revolving demand loan (note 7) 79,867 47,249
---------------------------------------------------------------------------
142,890 104,003

Future income tax liability (note 6) 37,710 33,158
Asset retirement obligations (note 11) 18,178 12,440
---------------------------------------------------------------------------
Total liabilities 198,778 149,601
---------------------------------------------------------------------------

Shareholders' Equity
Share capital (note 8) 310,186 195,734
Contributed surplus (note 9) 7,350 2,512
Retained earnings 25,739 16,383
---------------------------------------------------------------------------
343,275 214,629
---------------------------------------------------------------------------

542,053 364,230
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes

On behalf of the Board:

"Donald F. Archibald" "Douglas A. Dafoe"

Donald F. Archibald Douglas A. Dafoe
Chairman, CEO & Director Director

Cyries Energy Inc.
Consolidated Statements of Earnings and Retained Earnings

---------------------------------------------------------------------------
---------------------------------------------------------------------------
Year ended Year ended
($000, except per share amounts) December 31, 2006 December 31, 2005
---------------------------------------------------------------------------

Revenue
Petroleum and natural gas sales 139,161 96,415
Royalties (net of Alberta Royalty
Tax Credit) (32,671) (23,749)
---------------------------------------------------------------------------
106,490 72,666
Other income 397 131
---------------------------------------------------------------------------
106,887 72,797
---------------------------------------------------------------------------

Expenses
Production 24,362 11,989
Transportation 4,503 2,663
General and administrative 3,772 3,002
Interest 4,405 1,307
Stock compensation 4,992 2,172
Depletion, depreciation and accretion 54,589 23,840
---------------------------------------------------------------------------
96,623 44,973
---------------------------------------------------------------------------

Earnings before taxes 10,264 27,824

Taxes (note 6)
Current income taxes (80) 2,972
Future income taxes 988 10,020
---------------------------------------------------------------------------

Net earnings 9,356 14,832

Retained earnings, beginning of year 16,383 1,551
Retained earnings, end of year 25,739 16,383
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Net Earnings Per Share (note 10)
Basic $ 0.23 $ 0.46
Diluted $ 0.21 $ 0.41
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Weighted Average Common Shares Outstanding
Basic 41,015 32,286
Diluted 44,995 36,416
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes

Cyries Energy Inc.
Consolidated Statements of Cash Flows

---------------------------------------------------------------------------
---------------------------------------------------------------------------
Year ended Year ended
($000) December 31, 2006 December 31, 2005
---------------------------------------------------------------------------

Operating Activities
Net earnings for the period 9,356 14,832
Items not affecting cash
Depletion, depreciation and accretion 54,589 23,840
Future income taxes 988 10,020
Gain on investment (199) -
Stock compensation 4,992 2,172
---------------------------------------------------------------------------
Funds generated from operations 69,726 50,864
Asset retirement expenditures (197) (80)
Net changes in non-cash operating
working capital (note 12) 3,886 2,197
---------------------------------------------------------------------------
73,415 52,981
---------------------------------------------------------------------------

Financing Activities
Issue of common shares 54,070 70,013
Issue of common shares on exercise of
options 273 86
Issue of common shares on exercise of
warrants 39 -
Share issue costs (2,528) (3,528)
Increase/ (decrease) in bank debt 23,544 24,949
---------------------------------------------------------------------------
75,398 91,520
---------------------------------------------------------------------------

Investing Activities
Net additions to property and
equipment (154,259) (108,320)
Corporate acquisitions (590) (57,466)
Disposition of property and equipment 3,084 6,810
Net changes in non-cash investing
working capital (note 12) 2,952 14,475
---------------------------------------------------------------------------
(148,813) (144,501)
---------------------------------------------------------------------------

Change in cash - -
Cash, beginning of period - -
---------------------------------------------------------------------------

Cash, end of period - -
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes


NOTES TO THE FINANCIAL STATEMENTS
Years Ended December 31, 2006 and 2005
(All numbers in thousands except per share amounts)


1. NATURE OF BUSINESS

Cyries Energy Inc. ("Cyries" or the "Company") was incorporated May 20, 2004 and commenced operations on July 2, 2004 when certain assets of Cequel Energy Ltd. ("Cequel") were transferred to Cyries under a Plan of Arrangement entered into by Progress Energy Ltd. ("Progress"), Cequel, Progress Energy Trust, Cyries and ProEx Energy Ltd. (the "Arrangement"). Cyries is engaged in the exploration, development and production of crude oil and natural gas in the province of Alberta.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Presentation

The financial statements have been prepared in accordance with Canadian generally accepted accounting principles within the framework of accounting policies summarized below.

b) Revenue Recognition

Revenues associated with sales of petroleum and natural gas and all other items are recorded when title passes to the customer. Revenues are recorded gross of transportation charges incurred by the Company.

c) Property and Equipment

Capitalized costs

The Company follows the full cost method of accounting whereby all costs relating to the exploration for and development of petroleum and natural gas reserves, whether productive or unproductive, are capitalized in one Canadian cost center and are charged against earnings, as set out below. Such costs include land and lease acquisitions, geological and geophysical expenditures, drilling of productive and non-productive wells, production and gathering equipment and facilities, carrying costs directly related to unproved properties and corporate expenses directly related to acquisition, exploration and development activities. Proceeds from the disposition of petroleum and natural gas properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such disposition results in a change of 20 percent or more in the depletion and depreciation rate.

Depletion and depreciation

Depletion and depreciation of petroleum and natural gas properties and equipment are calculated using a unit of production method based on estimated gross proved petroleum and natural gas reserves, as determined by independent engineers. For purposes of this calculation, petroleum and natural gas reserves are converted to a common unit of measurement on the basis of six thousand cubic feet of gas equates to one barrel of oil. In determining its depletion base, the Company includes estimated future costs to be incurred in developing proved reserves and excludes estimated salvage values and the cost of unproved properties. Costs of acquiring and evaluating unproved properties are excluded from the depletion base until it is determined whether proved reserves are attributable to the properties or impairment occurs. Unproved properties are assessed for impairment at least annually.

Ceiling test

Impairment is determined when the carrying amount of the property, plant and equipment exceeds the sum of the undiscounted cash flows expected to result from the Company's proved reserves. If the carrying value is impaired, the amount of impairment is measured by comparing the carrying amounts of the property, plant and equipment to an amount equal to the estimated net present value of future cash flows from proved plus probable reserves. This calculation incorporates risks and uncertainties in the expected future cash flows that are discounted using a risk-free rate. Any excess carrying value above the net present value of the future cash flows would be recorded as a permanent impairment and charged to earnings.

d) Joint Interests

A portion of the Company's exploration, development and production activities is conducted jointly with others. These financial statements reflect only the Company's proportionate interest in such activities.

e) Measurement Uncertainty

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingencies. Such estimates primarily relate to unsettled transactions and events at the balance sheet date. Actual results could differ from those estimated.

The amounts recorded for depreciation and depletion of petroleum and natural gas property and equipment and for asset retirement obligations are based on estimates of petroleum and natural gas reserves and future costs. Proved reserves also provide the basis for determining whether the carrying value of property, plant and equipment is impaired. The determination of stock compensation involves estimates of the volatility of the Company's common shares, forfeiture rates and expected life. Goodwill impairment tests involve estimates of the company's fair value. By their nature, these estimates are subject to measurement uncertainty, and the impact on the financial statements of future periods could be material.

f) Stock Based Compensation

The Company accounts for its stock based compensation plans using the fair value method. Fair value is determined at the grant date using the Black-Scholes option-pricing model and is recognized over the vesting period of the options and performance shares granted as stock compensation expense and contributed surplus. The contributed surplus balance is reduced as the options and performance shares are exercised and the amount initially recorded is credited to share capital. Forfeitures are accounted for as a reduction of stock compensation expense and contributed surplus as incurred.

g) Future Income Taxes

The Company follows the liability method of accounting for income taxes. Under this method, future income tax is based on the differences between assets and liabilities reported for financial reporting purposes and those reported for income tax purposes. Future income taxes are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. The effect on future tax assets and liabilities of a change in tax rates is recognized in net earnings in the period in which the change occurs. Future income tax assets are limited to the amount that is more likely than not to be realized.

h) Earnings per Share

Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the period. The treasury stock method is used to determine the dilutive effect of stock options, performance shares and warrants, whereby proceeds from the exercise of in-the-money stock options or other dilutive instruments would be used to purchase common shares at the average market price during the period.

i) Asset Retirement Obligations

The Company recognizes the estimated liability associated with an asset retirement obligation ("ARO") in the financial statements at the time the asset is acquired and the liability is incurred. The estimated fair value of the ARO liability is recorded as a long term liability, with a corresponding increase in the carrying amount of property, plant and equipment. The capitalized amount is depleted on a unit-of-production method over the life of the proved reserves. The liability amount is increased each reporting period due to the passage of time and the amount of accretion is charged to earnings in the period. The ARO can also increase or decrease due to changes in the estimates of timing of cash flows or changes in the original estimated undiscounted cost. Actual costs incurred upon settlement of the ARO are charged against the ARO to the extent of the liability recorded.

j) Goodwill

Goodwill is the residual amount that results when the purchase price of a business exceeds the fair value of the net identifiable assets and liabilities. Goodwill is stated at cost and is not amortized. The goodwill balance is assessed for impairment each year end or more frequently if events or changes in circumstances indicate that the asset may be impaired. The test for impairment is conducted by comparing the book value to the fair value of the reporting entity. Impairment is charged to income in the period it occurs.

l) Flow-through shares

Flow-through shares were issued in 2006 with proceeds used to fund exploration and development expenditures within a defined period. Expenditures funded by flow-through arrangements are renounced to investors in accordance with tax legislation. Share capital is reduced and the future tax liability is increased by the total estimated future income tax cost of the renounced tax deductions at the time of renunciation to the shareholders.

3. CORPORATE AQUISITIONS

a) Dual Exploration Inc.

Pursuant to a take-over bid, Cyries acquired Dual Exploration Inc. ("Dual") whereby Dual shareholders received 0.167 of a Cyries share for each Dual share outstanding for an aggregate of 5,767 Cyries shares. As of November 30, 2006, 89 percent of the outstanding shares of Dual had been tendered to the bid and the bid was extended to December 11, 2006. An additional 4 percent of the Dual shares were tendered to the bid as of December 11, 2006 and the bid was allowed to expire in accordance with its terms. As more than 90 percent of the Dual shares were tendered to the bid Cyries acquired the remaining Dual shares pursuant to the compulsory acquisition procedures under the Business Corporations Act (Alberta) on December 12, 2006.

The acquisition was funded by the issuance of common shares. The trading price ascribed to the common shares of $10.72 per share is based on the trading prices of Cyries common shares on the five day period surrounding the announcement of the acquisition.
The acquisition was accounted for using the purchase method and the purchase equation is based on management's best estimate of the fair values of the assets and liabilities of Dual as at November 30, 2006 and is subject to adjustment.



--------------------------------------------------------------------------

Amount
--------------------------------------------------------------------------
Consideration:
Common shares $ 61,826
Transaction costs 590
--------------------------------------------------------------------------
62,416
Allocated to:
Current assets 9,126
Current liabilities (8,584)
Bank debt (9,073)
--------------------------------------------------------------------------
(8,531)

Property, plant and equipment 55,448
Goodwill 21,959
Asset retirement obligations (2,869)
Future income taxes (3,591)
--------------------------------------------------------------------------
$ 62,416
--------------------------------------------------------------------------
--------------------------------------------------------------------------


b) Devlan Exploration Inc.

On July 1, 2005 Cyries acquired all of the outstanding common shares of Devlan Exploration Ltd. ("Devlan") pursuant to a Plan of Arrangement. Devlan shareholders received 0.25 Cyries common shares for each Devlan common share outstanding, for a total of 8,558 Cyries shares. The business combination was accounted for using the purchase method. As part of the Arrangement, Devlan transferred certain oil and natural gas properties and $4,500 of debt to a new company, Dual Exploration Inc. ("Dual"), the shares of which were distributed to shareholders of Devlan on the basis of 0.5 of a Dual share for each Devlan share outstanding.

The acquisition was funded by the issuance of common shares. The trading price ascribed to the common shares of $9.52 per share is based on the trading prices of Cyries common shares on the five days following and five days prior to the announcement of the acquisition.



--------------------------------------------------------------------------

Amount
--------------------------------------------------------------------------
Consideration:
Common shares $ 81,469
Transaction costs 372
--------------------------------------------------------------------------
81,841
Allocated to:
Current assets 9,602
Current liabilities (12,680)
Bank debt (19,208)
--------------------------------------------------------------------------
(22,286)

Property, plant and equipment 70,512
Goodwill 49,745
Asset retirement obligations (3,560)
Future income taxes (12,570)
--------------------------------------------------------------------------
$ 81,841
--------------------------------------------------------------------------
--------------------------------------------------------------------------


c) 1181608 Alberta ULC

Pursuant to a share purchase agreement, Cyries acquired all of the outstanding common shares of 1181608 Alberta ULC a private oil and natural gas exploration and production company, for cash consideration of $57,000. The acquisition closed on August 12, 2005.The acquisition was accounted for using the purchase method of accounting.



--------------------------------------------------------------------------
Amount
--------------------------------------------------------------------------
Consideration:
Cash $ 57,000
Transaction costs 93
--------------------------------------------------------------------------
57,093

Property, plant and equipment 54,717
Goodwill 18,689
Asset retirement obligations (1,249)
Future income taxes (15,064)
--------------------------------------------------------------------------
$ 57,093
--------------------------------------------------------------------------
--------------------------------------------------------------------------


The results of operations of these companies are reflected in Cyries' earnings from the respective closing dates.

4. DEPOSITS, PREPAID EXPENSES AND OTHER

The components of the deposits, prepaids and other balance is as follows:



--------------------------------------------------------------------------

December 31, 2006 December 31, 2005
--------------------------------------------------------------------------
Deposits $ 216 $ 227
Prepaid expenses 2,684 1,608
Other 200 -
--------------------------------------------------------------------------
$ 3,100 $ 1,835
--------------------------------------------------------------------------
--------------------------------------------------------------------------

5. PROPERTY, PLANT AND EQUIPMENT
--------------------------------------------------------------------------

December 31, 2006 December 31, 2005
--------------------------------------------------------------------------
Petroleum and natural gas property and
equipment $ 506,193 $ 297,046
Other 241 105
--------------------------------------------------------------------------
506,434 297,151
Accumulated depletion and depreciation (85,730) (32,138)
--------------------------------------------------------------------------
Net book value $ 420,704 $ 265,013
--------------------------------------------------------------------------
--------------------------------------------------------------------------


In determining the Company's depletion and depreciation, $24,521 (2005 - $18,715) of costs related to unproved properties and $16,500 (2005 - $13,375) of estimated salvage value was excluded from the costs subject to depletion. Future development costs required to complete wells for which proved reserves have been assigned of $14,482 (2005 - $10,600) were added to the Company's net book value for purposes of the depletion calculation. The Company does not capitalize corporate general and administrative expenses.

The Company performed a full cost impairment test at December 31, 2006 to assess the recoverability of its petroleum and natural gas interests. As at December 31, 2006 there was no impairment required. For purposes of the full cost impairment test, the Company used the benchmark reference prices summarized in the table below:



---------------------------------------------------------------------------
WTI AECO
Year ($US/bbl) ($Cdn/mcf)
---------------------------------------------------------------------------
2007 62.00 7.20
2008 60.00 7.45
2009 58.00 7.75
2010 57.00 7.80
2011 57.00 7.85
Escalate thereafter 60.42 8.61
---------------------------------------------------------------------------
---------------------------------------------------------------------------


6. INCOME TAXES

The difference between the expected tax provision and the reported income
tax provision is summarized below:


---------------------------------------------------------------------------
Year ended Year ended
December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
Earnings before tax $ 10,264 $ 27,824
Enacted tax rate 35.21% 37.62%
---------------------------------------------------------------------------
Computed income taxes at the enacted
rate 3,614 10,467

Increase (decrease) in taxes
resulting from:
Non-deductible crown payments 5,231 5,795
Resource allowance (4,179) (5,008)
Income tax rate changes (3,722) (1,635)
Income tax audit adjustments (633) 1,798
Non-deductible stock compensation
and other 1,905 1,401
Attributed Canadian Royalty Income
(ACRI) (622) (400)
Capital taxes 36 252
Other (722) 322
---------------------------------------------------------------------------
Provision for income taxes $ 908 $ 12,992
---------------------------------------------------------------------------
---------------------------------------------------------------------------

The components of future income tax are as follows:

---------------------------------------------------------------------------
December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
Property, plant and equipment in
excess of tax basis $ (46,034) $ (40,001)
Asset retirement obligation
liability 5,271 4,667
Share issue costs 2,324 1,947
Other 729 229
---------------------------------------------------------------------------
Future income tax liability $ (37,710) $ (33,158)
---------------------------------------------------------------------------
---------------------------------------------------------------------------


7. REVOLVING DEMAND LOAN

The Company has a demand revolving operating credit facility provided by a syndicate of Canadian banks. The credit facility is limited to $145 million and provides that advances may be made by way of direct advances or bankers' acceptances. Direct advances bear interest at the bank's prime lending rate plus a variable rate and bankers' acceptances bear interest at the applicable bankers' acceptances rate plus a variable rate stamping fee. The variable rate charged by the bank is dependent upon the Company's debt to trailing cash flow ratio. As at December 31, 2006 the average interest rate on outstanding borrowings, including stamping fees, was 5.23 percent (December 2005 - 3.77 percent). The credit facility is subject to periodic review and is secured by a $250 million demand fixed and floating charge debenture over all of the Company's assets.

8. SHARE CAPITAL

Authorized

At December 31, 2006, the Company had authorized an unlimited number of common shares, an unlimited number of preferred shares, 3,988 warrants and 605 Class B performance shares.

Issued

The Company had the following shares outstanding at December 31, 2006:



---------------------------------------------------------------------------
Number of
Common Shares Shares Amount
---------------------------------------------------------------------------
Common shares December 31, 2004 24,218 $ 45,000
Private placement, February 3, 2005 2,440 20,008
Acquisition of Devlan, July 2, 2005 8,558 81,469
Private placement, August 11, 2005 4,017 50,005
Exercise of stock options 10 76
Exercise of warrants 20 40
Exercise of performance shares 2 1
Share issue costs - (3,528)
Tax effect of share issue costs - 1,229
---------------------------------------------------------------------------
Common shares December 31, 2005 39,265 194,300
Exercise of stock options 43 394
Exercise of performance shares 41 33
Exercise of warrants 24 48
Flow-through share issue 1,827 23,036
Share issue costs - (2,528)
Common share offering 2,530 31,625
Dual acquisition 5,767 61,826
Tax effect of share issue costs - 789
Tax effect of flow-through share issuance - (762)
---------------------------------------------------------------------------
Common shares December 31, 2006 49,497 $ 308,761
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Equity Issues
---------------------------------------------------------------------------
Price per
Share of Shares Gross
Date of Issue Issue Issued Proceeds
---------------------------------------------------------------------------
Common shares February 3, 2005 $ 8.20 2,440 $ 20,008
Common shares July 1, 2005 $ 9.52 8,558 81,469
Common shares August 12, 2005 $ 12.45 4,017 50,005
CEE flow-through shares July 6, 2006 $ 13.10 1,225 16,048
CDE flow-through shares July 6, 2006 $ 11.60 602 6,988
Common shares November 8, 2006 $ 12.50 2,530 31,625
Common shares November 30, 2006 $ 10.72 5,767 61,826
---------------------------------------------------------------------------
Total 25,747 $ 267,969
---------------------------------------------------------------------------
---------------------------------------------------------------------------


On July 6, 2006, the Company issued 1,827 flow-through common shares of which 1,225 flow-through common shares relate to Canadian exploration expenses ("CEE Flow-Through Shares") and 602 flow-through common shares relate to Canadian development expenditures ("CDE Flow-Through Shares"). The CEE Flow-Through Shares were issued at a price of $13.10 per share for proceeds of $16,048, while the CDE Flow-Through Shares were issued at a price of $11.60 for proceeds of $6,988. CEE Flow-Through Shares will be entitled to renunciation of Canadian exploration expenses from the Company, whereas purchasers of the CDE Flow-Through Shares will be entitled to renunciation of Canadian development expenses from the Company. Cyries incurred all of the required CDE and $9,766 of eligible CEE in 2006. Including a CEE flow thorough share obligation of $5,001 inherited from Dual, Cyries is required to incur $11,283 of eligible CEE in 2007 relating to 2006 flow through share issues.

On November 8, 2006, the Company issued, by way of a short form prospectus, 2,530 common shares at a price of $12.50 per share for total proceeds of $31,625. The offering included 330 common shares, which were issued upon exercise, in full, of an over-allotment option which was granted by Cyries to the underwriters.

On March 2, 2005, Devlan issued flow-through shares and committed to spend $2,250 before December 31, 2005 on expenditures qualifying as Canadian exploration expenditures. These flow-through commitments were made by Devlan in March 2005. Flow-through expenditures on Canadian exploration expenses were renounced to subscribers of the flow-through common shares in February 2006 effective December 31, 2005. The related income tax impact has been recorded in the first quarter of 2006.



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Number of
Warrants Warrants Amount
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Balance - December 31, 2005 3,968 $ 1,428
Exercise of warrants (24) (9)
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Balance - December 31, 2006 3,944 $ 1,419
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Each warrant is exercisable into one common share of the Company at a price of $1.63 per share until the warrants expire on June 28, 2008. All of the warrants vest annually subject to certain performance clauses, with the initial tranche having vested June 28, 2005. The remaining warrants have vested or will vest on their respective anniversary dates as the Cyries common shares traded at a 20-day weighted average price of at least $3.26.



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Number of
Performance Shares Performance Shares Amount
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Balance - December 31, 2005 599 $ 6
Exercise of performance shares (47) -
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Balance - December 31, 2006 552 $ 6
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In conjunction with the initial private placement, the Company issued 605 Class B Performance Shares to employees and directors. Each performance share was sold for a price of $0.01 per share and is convertible into the fraction of a common share equal to the closing trading price of the common shares on the Toronto Stock Exchange on the day prior to such conversion less $1.63, if positive, divided by the common share closing price. The performance shares vest at the rate of 33 percent per year and expire July 2, 2008. The fair value of each performance share was determined, at the date of issuance, using the Black-Scholes model. In the pricing model the fair value of the performance shares was $0.69 per share using a risk-free interest rate of 3.4 percent, volatility of 50 percent and an expected life of 3 years. The fair value of the performance shares is expensed over the vesting period of three years.

Share capital includes common shares of $308,761, warrants of $1,419 and performance shares of $6 for a total of $310,186.

9. STOCK BASED COMPENSATION

The Company accounts for its stock based compensation plan (the "Plan") using the fair value method. Under this method, a compensation cost is charged over the vesting period for stock options and Class B performance shares with a corresponding increase to contributed surplus.



Stock option activity related to the Plan was as follows:

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December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
Weighted Weighted
Number of Average Number of Average
Options Price ($) Options Price ($)
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Opening balance 1,672 10.25 460 5.41
Granted 2,204 13.34 1,222 12.03
Exercised (43) 6.36 (10) 5.21
Cancelled (34) 13.46 - -
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Closing balance 3,799 12.06 1,672 10.25
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The Plan is for the benefit of employees, officers and directors. Stock options granted under the Plan vest over a four year period with 20 percent of the options vesting immediately upon grant and a further 20 percent vesting upon each anniversary date. The options expire, if unexercised, five years from the date of the initial grant. At December 31, 2006,1,146 stock options (2005 - 418 stock options) have vested and the average remaining life of the outstanding stock options is 3.9 years (2005 - 4.3 years).



The following table provides additional information on the stock options
outstanding as at December 31, 2006:

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Number Weighted
Range of Exercise of Average Weighted Average Options
Prices ($/ share) Options Exercise Price Contractual Life Exercisable
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$ 5.21 - $6.50 412 $ 5.40 2.7 years 228
$ 10.40 - $13.76 2,999 $ 12.62 4.1 years 765
$ 14.51 - $16.60 388 $ 14.71 3.9 years 153
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3,799 $ 12.06 3.9 years 1,146
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The fair value of each stock option granted was estimated on the date of grant using the Black-Scholes model. The weighted average fair value of the stock options granted in the year was $5.05 (2005 - $5.01) per share, using an average risk-free interest rate of 3.14 percent (2005 - 2.8 percent), average volatility of 40 percent (2005 - 47 percent) and an expected life of 4.5 years (2005 - 4.5 years). The Company has not re-priced any stock options.

For the year ended December 31, 2006, $4,854 of expense related to the stock options and $138 of expense related to the performance shares is included in stock compensation expense.



The following table reconciles the Company's contributed surplus:

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December 31, 2006 December 31, 2005
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Contributed surplus, beginning of period $ 2,512 $ 365
Stock based compensation expense 5,010 2,172
Exercise of stock options (121) (23)
Exercise of performance shares (33) (1)
Cancellation of stock options (18) (1)
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Carrying amount, end of period $ 7,350 $ 2,512
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10. PER SHARE AMOUNTS

The following table details the components of diluted common shares
outstanding:

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Year ended Year ended
Weighted average common shares December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
Basic 41,015 32,286
Warrants 3,462 3,469
Performance shares 518 527
Options - 134
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Diluted 44,995 36,416
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---------------------------------------------------------------------------


The calculation of diluted common shares excludes 3,799 (2005 - 1,537) of stock options that are anti-dilutive.

11. ASSET RETIREMENT OBLIGATIONS

The total future asset retirement obligations were estimated by management based on the Company's net ownership interest in all wells and facilities, estimated costs to reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods. The Company has estimated the net present value of its asset retirement obligations to be $18,178 (2005 - $12,440) as at December 31, 2006 based on a total future liability of $42,712 (2005 - $32,249). Asset retirement expenditures are expected to be made over the next 25 years with the majority of costs to be incurred by 2020. The Company used a credit adjusted risk free rate of seven percent (2005 - seven percent) and an inflation rate of two percent (2005 - two percent) to calculate the present value of the asset retirement obligation. The following table reconciles the Company's total asset retirement obligation.



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Year ended Year ended
December 31, 2006 December 31, 2005
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Balance, beginning of period $ 12,440 $ 2,519
Increase in liabilities 1,922 1,238
Liabilities settled (197) (80)
Dispositions (178) (365)
Acquisitions 2,954 5,717
Revisions 239 2,967
Accretion 998 444
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Carrying amount, end of period $ 18,178 $ 12,440
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12. SUPPLEMENTAL CASH FLOW INFORMATION

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Year ended Year ended
Changes in non-cash working capital December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
Accounts receivable $ 10,087 $(11,413)
Prepaid expenses and deposits (935) (245)
Accounts payable and accrued liabilities (2,314) 28,330
---------------------------------------------------------------------------
Net change in non-cash working capital 6,838 16,672
Investing activities 2,952 14,475
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Operating activities $ 3,886 $ 2,197
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The Company made the following cash outlays in respect of interest
expense and current income taxes:
---------------------------------------------------------------------------
Year ended Year ended
December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
Interest $ 4,412 $ 872
Income taxes $ 2,411 $ 588
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13. COMMITMENTS

The company is committed to payments under an operating lease for office space through September 30, 2012 totaling $5,052 (2007 -$616; 2008 - $934; 2009 - $934; 2010 - $934; 2011 - $934; 2012 - $700).

14. FINANCIAL INSTRUMENTS

The Company's financial instruments recognized in the balance sheet consist of accounts receivable, accounts payable and the revolving demand loan. The fair value of these financial instruments approximate their carrying value due to their short term to maturity and the floating interest rate on the loan.

Risk Management Activities

The nature of the Company's operations result in exposure to fluctuations in commodity prices, exchange rates and interest rates. The Company monitors and when appropriate, may use derivative financial instruments to manage its exposure to these risks. For the periods presented the Company has not entered into any derivative financial instruments.

Substantially all of the Company's accounts receivable are due from companies in the oil and gas industry and are subject to the normal industry credit risks. The carrying value of accounts receivable reflects management's assessment of the associated credit risks.

15. RELATED PARTY TRANSACTIONS

The Company was involved with the following related party transactions in 2006:

a) On July 6, 2006, the Company completed a flow-through share issuance whereby certain officers, directors, employees and family of employees who are considered related parties purchased 602 CDE flow-through shares at a price of $11.60 for total proceeds of $6,988 and 367 CEE flow-through shares at a price of $13.10 for total proceeds of $4,802.

b) The Company incurred $637 in legal costs to a law firm whereby the Corporate Secretary of the Company is a partner. Of the legal costs incurred throughout the year, $382 is included in accounts payable and accrued liabilities at December 31, 2006.

c) One of the directors of the Company was a director and chairman of Dual, which was acquired by the Company on November 30, 2006.

All related party transactions are in the normal course of operations and have been measured at the agreed exchange amounts, which is the amount of the consideration established and agreed to by the related parties and which is similar to those negotiated with third parties.

16. SUBSEQUENT EVENT

On March 7, 2007, Cyries Energy Inc. ("Cyries") announced that it entered into a letter of intent with a director of Cyries and an investment company to issue on a private placement basis 443 CEE flow-through shares at a price of $13.55 per share and approximately 524 CDE flow-through shares at a price of $11.45 per share for aggregate gross proceeds of approximately $12,000. The purchasers of CEE flow-through shares will be entitled to renunciations of Canadian exploration expenses in an amount equal to the subscription amount from Cyries, while purchasers of the CDE flow-through shares will be entitled to renunciations of Canadian development expenses in an amount equal to the subscription amount from Cyries. The completion of the private placements are subject to Cyries receiving all necessary regulatory approvals. The private placement is expected to close on March 14, 2007.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Cyries Energy Inc.
    Donald F. Archibald
    Chairman & C.E.O.
    (403) 262-9609
    403) 262-0055 (FAX)