Defiant Resources Corporation
TSX : DFR

Defiant Resources Corporation

September 12, 2007 17:51 ET

Defiant Resources Corporation Provides Operational Update: Successful Ongoing 2007 Drilling Program Leads to 58% Increase in Reserves

CALGARY, ALBERTA--(Marketwire - Sept. 12, 2007) - Defiant Resources Corporation ("Defiant" or the "Company") (TSX:DFR) is pleased to announce that its successful ongoing 2007 drilling program in the Grande Prairie area has significantly increased the Company's reserves, production capacity and net asset value.

Highlights of our activities to date in 2007 are:

- A drilling success rate this year of 100%; with eight (6.5 net) wells drilled and cased in our Grande Prairie core area.

- Reserves additions of 1,829 Mboe represent a 58% increase in total proved plus probable reserves, net of production, since December 31, 2006.

- Finding and development costs, including changes in future capital, were $12.82 per boe proved and $9.91 per boe proved plus probable.

- The basic per share net asset value is calculated to be $3.83 and $3.09 based on future cash flows discounted at 5% and 10% respectively.

- Three new gas wells in the Grande Prairie area are expected to be placed on production in October. With the tie in of these wells we are on track to achieve our goal of exiting the year producing 1,500 boe per day.

- The Company currently has over 30 drilling opportunities of which more than 50% are developmental. This represents a substantial improvement in our drilling mix, as the prospects were predominantly exploratory when the Company commenced operations in December 2004.

We determined that the 2007 drilling successes were material enough to warrant an update to our reserves evaluation by our independent engineers, Sproule Associates Limited ("Sproule"). Accordingly, Sproule has prepared an evaluation pursuant to NI 51 - 101 of the Company's P&NG reserves to August 31, 2007.

The evaluation reflects Sproule's August 31, 2007 price forecast, which, compared to December 31, 2006, assumes lower gas prices and slightly higher oil prices for the first two years and similar prices thereafter. A comparison of the prices used for the first two years is detailed below.



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August Prices December Prices
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Oil Edmonton Parr Gas AECO-C Oil Edmonton Parr Gas AECO-C
($CND/bbl) ($CND/MMBTU) ($CND/bbl) ($CND/MMBTU)
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2007 78.11 6.31 74.10 7.72
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2008 76.10 7.87 77.62 8.59
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A comparison of our August 31, 2007 and December 31, 2006 reserves, as
evaluated by Sproule Associates Limited, is provided below:


Aug 31/07 Dec 31/06 Change %

Net Present Values
Before Taxes
(000s)
5% $ 86,755 $ 69,316 $ 17,439 25%
10% $ 70,958 $ 56,259 $ 14,699 26%
15% $ 60,293 $ 47,865 $ 12,428 26%

Reserves
(Mboe)
Proved Developed Producing 1,345 1,408 (63) (4)%
Proved Developed Non-Producing 728 33 695 2,100%
Proved Undeveloped 363 40 323 800%
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Total Proved 2,436 1,481 955 64%
Probable 2,299 1,690 609 36%
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Total Reserves 4,734 3,170 1,564 49%
Production to August 31/07 265
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Total Reserve additions 1,829 58%
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The Company has a gas weighted reserve base with an approximate 70/30 gas/oil split. Our commodities have historically received premium pricing due to the high heating value of the gas and the high gravity of the oil. This has allowed us to achieve superior field net backs for a gas weighted junior oil and gas company. Reserves additions of 1,829 Mboe represent a 58% increase in total proved plus probable reserves net of production since December 31, 2006. Defiant added 955 Mboe of proven reserves, an increase of 64% (proven reserves net of production increased 1,220 Mboe or 82%). Proved developed producing reserves decreased 63 Mboe after production of 265 Mboe (net of production proved developed producing reserves increased 202 Mboe or 18%) The reserves additions are attributable to the exploration successes in the Grande Prairie projects at Karr, Clairmont, Gold Creek and Grande Prairie East, together with ongoing development drilling.

Finding and development costs, including changes in future capital, were $12.82 per boe proved and $9.91 per boe proved plus probable based on capital expenditures estimated at $12.4 million for the period ended August 31,2007. For comparison, the Company's Annual Information Form filed on March 29, 2007 summarizes finding and development costs for the three most recent financial years.

At August 31, 2007, our basic per share net asset value ("NAV") is calculated to be $3.83 based on future cash flows discounted at 5% and $3.09 based on a 10% discount rate. These calculations assume a working capital deficiency, including bank debt, of $17.5 million, a value for undeveloped land and seismic of $12.8 million and common shares outstanding of 21.4 million. Fully diluted per share NAV values are $3.55 and $2.90, given common shares outstanding of 24.1 million, with proceeds of $3.5 million from the exercise of the warrants.

In addition to the above reserve assignments Sproule evaluated and assigned possible reserves at Karr and Grande Prairie East with respect to on trend drilling at Karr and the water flood potential for the Dunvegan oil pool at Grande Prairie East. Possible reserves assigned to these properties totalled 697 Mboe and a net present value before tax of $9 million, discounted at 10%. These values have been excluded from calculating our net asset value and finding and development costs.

The Company's plans for the balance of this year include:

- Tying in new gas discoveries in October; two (2 net) wells at Karr and one (0.8 net) well at Clairmont.

- Drilling up to four (3.5 net) wells including three locations in Grande Prairie and one in our West Pembina core area.

We believe these activities will ensure the Company achieves its goal of exiting the year at 1,500 boe per day.

Defiant plans to open its data room with respect to the process to maximize shareholder value the week of September 24, 2007.

Forward Looking Statements - Certain information regarding Defiant Resources Corporation set forth in this document, including management's assessment of Defiant Resources Corporation's future plans and operations, contains forward-looking statements that involve substantial known and unknown risks and uncertainties including resolution of various land owner issues These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Defiant Resources Corporation's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Defiant Resources Corporation's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Defiant Resources Corporation will derive therefrom. In addition, the term boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf = 1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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