Duvernay Oil Corp.
TSX : DDV

Duvernay Oil Corp.

May 08, 2008 02:01 ET

Duvernay Achieves Record Production Levels, Expands 2008 Capital Program

CALGARY, ALBERTA--(Marketwire - May 8, 2008) - Duvernay Oil Corp. (TSX:DDV) -

HIGHLIGHTS

- Record quarterly production of 24,102 boepd a 15% increase over first quarter 2007.

- Current daily production level of 27,500 boepd.

- Record quarterly cash flow of $73.2 million, an increase of 15% over first quarter 2007.

- An expanded post break-up EP program that is expected to deliver an incremental 100 mmcfpd by April 2009.

- The Company's first four horizontal Montney gas wells tested at rates in excess of 5.0 mmcfpd, an additional 35 horizontals are planned in next 9 months.

- Strengthened balance sheet resulting from a number of new financial management initiatives.

PRODUCTION OUTLOOK

First quarter 2008 production averaged 24,102 boepd a 15% increase over first quarter 2007. First quarter production was 9% higher than fourth quarter 2007, the second quarter in a row with strong growth. Second quarter 2008 production has averaged approximately 27,100 boepd thus far, 12% higher than the first quarter 2008 average.

The upcoming post break-up EP program is expected to deliver a net production addition of between 100 and 115 mmcfpd between July 2008 and April 2009. These additions will come from major development drilling and facility projects at Groundbirch, West Groundbirch B.C. and Sundance-Obed-Pedley in the Alberta Deep Basin.

FINANCIAL RESULTS AND OUTLOOK

Funds from operations increased to $73.2 million ($1.22 per diluted equity share) for the three months ending March 31 from $63.7 million ($1.15 per diluted equity share) for the comparable period in 2007. On a per share basis, funds from operations increased by 6% due to production increases. After tax earnings decreased by 196% for the first quarter of 2008 when compared to the same period in 2007 to $(10.3) million from $10.7 million, as the Company was required to recognize unrealized natural gas hedging losses in the quarter. Before tax earnings from operations, excluding the effects of unrealized losses on hedging contracts, increased by 5% from $22.9 million to $24.0 million in the first quarter of 2008 compared to the first quarter of 2007. On a per share basis diluted before tax earnings from operations were $0.40 for the first quarter of 2008 compared to $0.41 for the first quarter of 2007. On a per share basis, diluted earnings decreased to $(0.17) from $0.19, a 189% decrease. On a pre-tax basis, first quarter 2008 earnings of $(17.4) million were down from the same quarter in 2007 ($15.6 million), for the reasons stated above.

As is typical of large resource development players, Duvernay engages in natural gas hedging activities to ensure sufficient base levels of cash flow to maintain the large ongoing EP programs. The Company plans to continue to hedge between 25 and 50% of current production when natural gas prices meet or exceed levels utilized in the Company's five year development outlook, Duvernay has 74 mmcfpd hedged for the balance of 2008. The 2008 price in this five year development plan is $ 8.00/mcf, the hedged price on 43% of budgeted 2008 production is $ 8.00/mcf. Unhedged budgeted volumes of 97 mmcfpd will receive the higher prices currently available. These hedged volumes will yield an average internal rate of return of approximately 45% for the Company's NEBC and Alberta Deep Basin projects. Duvernay's very low cost structure and its high deliverability gas wells allow these projects to remain profitable even at prices as low as $3.00/mcf.

Improved natural gas prices and continued strong EP performance have led the Company to increase full year cash flow estimates to $400 million and full year earnings estimates to $115 million. The increased 2008 cash flow coupled with the 2008 equity issues and the Puskwa-Dawson asset sale have led to a significantly strengthened balance sheet. The Company is now forecasting year-end 2008 net debt of $ 420 million, 20% lower than 2007 exit net debt of $526 million.

The Company's very strong year end 2007 reserve report is expected to lead to a $575 million line of credit up from the current $515 million line of credit with its banking syndicate. This increase is currently being finalized by the syndicate.

CAPITAL PROGRAM

Duvernay increased the 2008 capital program from $400 million to $450 million in conjunction with the recently closed equity issue. This will allow the Company to expand the operated drilling rig fleet from 9 to 11 rigs when drilling commences after break-up. The expanded program will run continuously until Spring break-up in 2009. Major facility expansions are planned in conjunction with the expanded drilling and completion program at Groundbirch B.C., and at Wroe and Sundance-Obed in the Alberta Deep Basin.

SUNSET-GROUNDBIRCH B.C.

The Company has expanded the rig fleet to 5 rigs in NEBC with 3 rigs now dedicated to drilling Triassic Montney gas development wells. This is expected to add approximately 35 new horizontals by Spring break-up 2009. The Company's first four Montney horizontals have all production tested in excess of 5.0 mmcfpd with one of the wells, Saturn 9-4, testing at 9.5 mmcfpd. Duvernay has interests in 180 net sections of Montney rights in the interpreted prime Montney gas resource fairway equating to between 350 and 700 horizontal drilling targets contingent upon ultimate well spacing. A two phase expansion of the existing Groundbirch 4-15 facility will add 70 mmcfpd of net incremental gas processing capacity in NEBC by Spring 2009, with the majority of this new capacity dedicated to the Montney program.

The other two rigs in NEBC will be targeting Doig development wells and deeper Paleozoic exploration targets. The initial Paleozoic gas discovery at Groundbirch has been on-stream since late March, and is producing at a steady 4.0 mmcfpd. The well is choked down-hole as the Duvernay Sunset-Groundbirch gas infrastructure is currently filled to capacity. Many of the future Doig development locations can be captured as up-hole zones in upcoming Montney horizontal wells. These 1.5-2.0 bcf Doig zones can be added for only completion and stimulation costs of approximately $600,000 saving drilling and casing costs of $1.7 million.

ALBERTA DEEP BASIN

Production in the Deep Basin has reached the 130 mmcfpd level in April, ahead of the original production schedule. Duvernay plans to add approximately 30 mmcfpd of net production by year end 2008 through the aforementioned ongoing expanded EP program.

The Company has increased the Deep Basin rig fleet from 5 to 6 operated rigs which is expected to add an additional 70 gas wells by next Spring break-up. The planned 30 mmcfpd production addition will result primarily from EP and facility plans in the Sundance-Obed-Pedley area where the Company has drilled several very high deliverability gas wells during the past six months. Thus far in 2008 the Company is averaging 9 completed and stimulated Cretaceous gas zones per wellbore in the overall Deep Basin. The Sundance and Oldman gas plants, commissioned in November 2007 and March 2008 respectively remain full with several existing wells awaiting facility access. The future development well inventory in the Deep Basin remains at approximately 1400 locations. The Company has added an additional 30 sections of new Deep Basin lands thus far in 2008, through new farm-ins and crown land sales.

At Edson, Duvernay intends to follow up the Devonian Wabanum gas discovery with at least two wildcats in the second half of 2008. This new play, validated with the previously announced Edson 8-13 gas discovery, provides significant longer term reserve and production upside for the Company.

Management's Discussion and Analysis

Certain information set forth in this management's discussion and analysis contains forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Duvernay'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 industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Duvernay'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 Duvernay will derive therefrom. Duvernay disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as expressly required by applicable securities laws.

Funds from operations and operating netback are not recognized measures under GAAP. Management believes that in addition to net income, funds from operations and operating netback are useful supplemental measures as they demonstrate the Corporation's ability to generate the cash necessary to repay debt or fund future growth through capital investment. Investors are cautioned, however, that these measures should not be construed as an alternative to net income determined in accordance with GAAP as an indication of Duvernay's performance. Duvernay's method of calculating these measures may differ from other companies and accordingly, they may not be comparable to measures used by other companies. Duvernay defines funds from operations as cash from operations before changes in non-cash operating working capital and abandonment costs incurred. The following table shows the reconciliation of funds from operations to operating cash flow as defined by GAAP:



Three Months Ended
March 31
-------------------------
(000s) 2008 2007
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Operating Cash Flow, per Cash flow Statement $ 78,010 $ 68,757
Changes in non-cash working capital (4,858) (5,061)
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Funds from operations, as disclosed $ 73,152 $ 63,696
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Operating netback is calculated on a $/BOE basis and is defined as revenue
less royalties, transportation costs and operating expenses, as shown below:

Three Months Ended
March 31
-------------------------
($/BOE) 2008 2007
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Revenue, excluding unrealized gains and losses
on financial instruments and processing fee income $ 51.65 $ 51.97
Royalties (9.15) (9.13)
Transportation costs (1.32) (1.29)
Operating Expenses (5.47) (5.58)
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Operating Netback $ 35.71 $ 35.97
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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 equivalent (6:1). Barrel of oil equivalents (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6mcf:1bbl of oil is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

This management's discussion and analysis should be read in conjunction with Duvernay's unaudited interim financial statements for the three months ended March 31, 2008 and audited financial statements and notes for the year ended December 31, 2007 and comparative information included therein.

This management's discussion and analysis is dated May 6, 2008.

Additional information about Duvernay Oil Corp. may be found in documents filed on SEDAR at www.sedar.com and which are also available on Duvernay's website www.duvernayoil.com.

Quarter ending March 31, 2008 compared to the Quarter ending March 31, 2007.

PRODUCTION

The Corporation's production for the three months ended March 31, 2008 averaged 24,102 boe/d compared with 20,884 boe/d for the same period in 2007, an increase of 15%. Average production also increased 9% compared to the fourth quarter of 2007. The Corporation did not participate in any significant property or corporate acquisitions or dispositions during the quarter.



Three Months Ended March 31
-----------------------------------------
2008 2007 Change
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Natural gas (mcf/d) 130,356 111,788 17%
Crude oil and liquids (bbls/d) 2,376 2,252 6%
Oil equivalent - boe 2,193,239 1,879,533 17%
Oil equivalent - boe/d 24,102 20,884 15%
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Area (boe/d) First Quarter Fourth Quarter First Quarter
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2008 2007 2007
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Northeast B.C. 5,927 5,663 6,314
Deep Basin 17,484 15,882 13,917
Other Areas 691 475 653
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24,102 22,020 20,884
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New production was sourced from the Deep Basin where 24 new wells were tied-in along with 11 new Northeast B.C. wells also being tied in during the quarter. These production additions offset natural declines and added significant new gas volumes. Prior system constraints were alleviated with the commissioning of the new Oldman gas plant in March 2008. Deep Basin production for the quarter averaged 17,484 boe/d for an increase of 10% compared to the fourth quarter of 2007. Groundbirch/Sunset production increased to 5,927 boe/d, or 5%, from the same quarter in 2007.

REVENUE AND ROYALTIES

Revenue for the three months ended March 31, 2008 was $116.1 million representing a 17% increase from revenue of $99.5 million for the same period in 2007. Revenue includes all petroleum and natural gas sales, processing fee income and has been adjusted for the effects of commodity hedging. Realized oil and liquids prices for the first quarter of 2008 averaged $88.03 per barrel compared with $62.00 per barrel for the same period in 2007. When comparing Duvernay's first quarter 2008 oil and liquids price to the first quarter 2007, realized prices increased 42%. World oil price benchmarks increased by $39.55 U.S. in the first quarter of 2008 when compared to the same time period in 2007, or 45%.

Duvernay's realized corporate gas price for the first quarter of 2008 was lower than the AECO spot price ($7.70 - net of transportation and hedging gains/losses versus $7.92). AECO natural gas prices increased by 7% in the first quarter of 2008 compared to the first quarter of 2007. Duvernay's realized natural gas price decreased by 4% when comparing these quarters due to the effects of realized hedging losses. Transportation costs for the first quarter of 2008 were 2.6% of gross revenue or $1.32/boe, compared to 2.5% of gross revenue or $1.29/boe in the first quarter of 2007. Third party processing income of $2.8 million increased compared to the fourth quarter of 2007. Approximately 27.0 mmcf/d of third party natural gas continues to be processed through the 120 mmcf/d Cecilia 15-4 gas plant.



DUVERNAY PRICES

Three Months Ended March 31
---------------------------------------
2008 2007 Change
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Natural gas ($/mcf) $ 7.70 $ 8.05 (4)%
Crude oil and liquids ($/bbl) 88.03 62.00 42 %
Oil equivalent ($/boe) $ 50.33 $ 49.79 1 %
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BENCHMARK OIL & GAS PRICES

Three Months Ended March 31
---------------------------------------
2008 2007 Change
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Natural Gas
NYMEX Henry Hub U.S. ($/mcf) $ 8.74 $ 7.17 22%
AECO ($/mcf) $ 7.92 $ 7.41 7%
Oil
NYMEX U.S. ($/bbl) $ 97.82 $ 58.27 68%
Edmonton Par Cdn. ($/bbl) $ 98.73 $ 67.89 45%
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RECONCILIATION OF AECO INDEX TO DUVERNAY'S REALIZED NATURAL GAS PRICES

Three Months Ended March 31
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($/mcf) 2008 2007
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AECO Index Price $ 7.92 $ 7.41
Transportation (0.15) (0.16)
Heat/Quality Differential 0.62 0.39
Hedge (0.69) 0.41
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Duvernay realized natural gas price $ 7.70 $ 8.05
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CURRENCY - EXCHANGE RATES

Three Months Ended March 31
----------------------------------------
2008 2007 Change
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Cdn/U.S. $ $ 0.9952 $ 0.8533 17%
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Revenue is analyzed as follows:

Three Months Ended March 31
-----------------------------------------
Revenue 2008 2007 Change
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Natural gas $ 93,119 $ 82,647 13%
Oil and liquids revenue 20,172 15,034 34%
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Total Revenue from oil and gas
sales 113,291 97,681 16%
Processing and Other Income 2,764 1,771 56%
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Total revenue, before unrealized
commodity hedging gains/(losses) 116,055 99,452 17%
Unrealized commodity hedging
gains/(losses) (40,933) (7,309) 460%
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Total revenue, per financial
statements $ 75,122 $ 92,143 (18)%
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Duvernay's royalties are summarized as follows:

Three Months Ended March 31
----------------------------------------
Royalties 2008 2007 Change
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Natural gas $ 16,030 $ 14,432 11%
Oil and liquids 4,052 2,735 48%
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Total royalties $ 20,082 $ 17,167 17%
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For the three months ended March 31, 2008, the average effective royalty rate was 18%, compared to 18% for the same period in 2007. Duvernay continued to benefit from the royalty relief programs put into place by the Ministry of Energy and Mines for British Columbia in May 2003, allowing explorers to access reduced royalty rates for low-productivity natural gas wells, royalty credits for deep gas wells and royalty credits for wells drilled in the summer months. Royalties as a percent of total revenue stayed consistent with the same period in 2007.

OPERATING EXPENSES

Operating expenses include all periodic lease and field level expenses and include no income recoveries for processing third party volumes. Operating expenses of $5.47/boe for the first quarter of 2008 decreased when compared to the first quarter 2007 operating expenses of $5.58/boe. This is due to Duvernay's Oldman facility being commissioned during the quarter offset by continued inflationary pressures in many field services including labour costs, equipment rates and subsurface repair and maintenance. Total operating expenses for the quarter were $12.0 million compared to $10.5 million in the first quarter of 2007. The Corporation's first quarter operating expenses include third party processing, gathering and compression fees of $2.6 million or 22% of total operating costs.



GENERAL & ADMINISTRATIVE EXPENSES

General and administrative expenses ("G&A") are summarized on the table
below as follows:

Three Months Ended March 31
----------------------------------------
2008 2007 Change
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G&A expenses $ 4,398 $ 3,657 20%
Administrative and operating
recovery (402) (392) 3%
Capital recovery (1,253) (1,355) (8)%
Capitalized G&A (949) (664) 43%
Stock based compensation 3,982 2,942 35%
Capitalized stock based compensation
(excluding income tax effect) (1,393) (1,030) 35%
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Total G&A $ 4,383 $ 3,158 39%
Oil equivalent ($/boe) $ 2.00 $ 1.68 19%
Oil equivalent cash costs ($/boe) $ 0.82 $ 0.66 24%
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Net G&A expenses for the three months ending March 31, 2008 increased to $4.4 million from $3.2 million for the same period in 2007. G&A for the first quarter of 2008 increased to $2.00/boe from $1.68/boe in 2007 primarily due to the increase in stock based compensation expense. Stock based compensation expense increased over the same period of 2007 as the impact of two stock option issues are being recognized in income. On a cash basis, general and administrative costs increased to $0.82/boe from $0.66/boe for the same period in 2007. This increase in cash G&A is due to administrative growth necessitated by increased regulatory requirements as well as operational growth. The percentage of expenses capitalized as attributable to exploration activities was 35%, consistent with the first quarter of 2007.

DEPLETION, DEPRECIATION AND ACCRETION

Depletion, depreciation and accretion expense ("DD&A") increased to $46.6 million during the first quarter of 2008 from $38.9 million during the same period in 2007. On a dollars per boe basis, DD&A increased to $21.10 from $20.58 in the first quarter of 2007. The percentage of the property, plant and equipment investment excluded from the Corporation's costs subject to depletion (3% in 2008; 7% in 2007) decreased when comparing the first quarter of 2008 with 2007.

INCOME TAXES

The Corporation did not pay any cash income taxes in the first quarter of 2008. The Corporation does not expect to pay any cash income taxes in 2008 based on existing tax pools, planned capital expenditures and the most recent forecast of 2008 taxable income. Although current income tax horizons depend on product prices, production levels, and the nature, magnitude and timing of capital spending, the Corporation currently believes that no cash income tax will be payable for two to three years.

FUNDS FROM OPERATIONS AND EARNINGS

Funds from operations increased to $73.2 million ($1.22 per diluted equity share) for the three months ending March 31 from $63.7 million ($1.15 per diluted equity share) for the comparable period in 2007. On a per share basis, funds from operations increased by 6% due to production increases. After tax earnings decreased by 196% for the first quarter of 2008 when compared to the same period in 2007 to a net loss of $10.3 million from net earnings of $10.7 million. Significant increases in commodity prices over the last six months have led to unrealized losses on several hedging contracts, required to be recognized as per the recommendations of the financial instruments guidelines for recognition and measurement adopted in January of 2007. Financial Statement note 5 "Financial Instruments" provides further details. Before tax earnings from operations, excluding the effects of unrealized losses on hedging contracts, increased by 5% from $22.9 million to $24.0 million in the first quarter of 2008 compared to the first quarter of 2007. On a per share basis diluted before tax earnings from operations were $0.40 for the first quarter of 2008 compared to $0.41 for the first quarter of 2007. On a per share basis, earnings decreased to $(0.17) from $0.19, a 189% decrease. On a pre-tax basis, the first quarter 2008 net loss of $16.9 million was down from net earnings in the same quarter in 2007 of $15.6 million, for the reasons stated above.



Three Months Ended March 31
---------------------------------------
2008 2007 Change
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Funds from operations per equity
share (1) $ 1.22 $ 1.15 6%
Earnings per equity share (1) $ (0.17) $ 0.19 (189)%
Operating netback per boe $ 35.71 $ 35.97 (1)%
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note: (1) diluted


LIQUIDITY AND CAPITAL RESOURCES

The Corporation invested $136.6 million in the first quarter of 2008 compared to $139.0 million in the first quarter of 2007, as set out in the following table.




Three Months Ended
-------------------------------------------
December 31,
($ thousands) March 2008 March 2007 2007
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Land and seismic $ 4,073 $ 5,209 $ 1,891
Drilling and completions 105,657 106,952 114,180
Facilities 25,857 23,837 27,922
Property
Acquisition/(Disposition) - 732 (2,138)
Other 1,006 735 1,232
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Total $ 136,593 $ 137,465 $ 143,087
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The Corporation drilled 26 gross wells (21.7 net) of which 16 are Deep Basin, 8 are Sunset/Groundbirch and 2 are in other areas. Thirty-five gross wells were completed during the first quarter and 35 wells were tied in.

On March 4, 2008 Duvernay completed a private placement equity financing issuing 720,000 common shares on a flow-through basis at an issue price of $42.25 per share for gross proceeds of $30.4 million. The proceeds of the financing are dedicated to previously planned exploration and development drilling projects. At March 31, 2008 the Corporation's net debt was $581.7 million, which is in excess of borrowing capacity of $515 million. Net debt for purposes of Canadian generally accepted accounting principles (GAAP) includes after tax unrealized hedging losses of $29.8 million. Adjusted net debt, to exclude the after tax effect of unrealized hedging losses, would become $551.9 million. This shortfall was remedied via the issue of 2 million common shares at an issue price of $45.50 per share for gross proceeds of $91.0 million; this financing is scheduled to close on May 6, 2008. In addition, the Company has sold a non core asset (East Flank of the Peace River Arch) for total consideration of $38 million including cash of $33 million, schedule to close in the second quarter of 2008.

The Company has a syndicated bank facility with a group of Canadian banks. The facility has borrowing capacity of $490 million. In addition the Corporation has a $25 million operating line. The Corporation is currently negotiating with the banking syndicate and expects a revised borrowing base of $575 million, based on increases in reserve values. This will be completed by the end of May.



A summary of the Corporation's financial management activities is as
follows:

(millions)
Net Debt - March 31, 2008, per Canadian GAAP $ 581.7
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Unrealized after tax hedging losses (29.8)
Equity financing - 2.0 million common shares - May 2008 closing (87.0)
Peace Rivers East Flank sale - May 2008 closing (33.0)
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Adjusted Net Debt $ 431.9
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At March 31, 2008 the Corporation estimates that it has fully spent the $41.5 million of the February 2007 flow-through offering and has a $15.1 million remaining of the obligation for the October 2007 flow-through offering, which must be completed by December 31, 2008. The full amount of the March 2008 flow-through obligation remains to be spent, which must be completed by December 31, 2009.

As at March 31, 2008, the Corporation had 59,671,543 shares outstanding and 5,418,049 stock options outstanding. As at May 6, 2007, the Corporation has 59,853,512 shares outstanding and 5,236,080 stock options outstanding. During the period from March 31, 2008 until May 6, 2008, 181,969 common shares were issued on the conversion of employee stock options, and no new stock options were issued.

COMMODITY PRICE RISK MANAGEMENT/DERIVATIVE CONTRACTS

The Corporation enters into commodity-based derivative financial instruments and physical commodity contracts such as forwards, futures, swaps, and costless collars to serve two primary business objectives. The first objective is to reduce the variability in cash flows from fluctuations in product prices to ensure a source of funding for the 2008 and 2009 capital program. The second objective is to fix the rate of return on capital invested in the gas prone resource projects. The Board of Directors has approved a policy permitting management to hedge up to a fixed percentage of budgeted corporate annual production. See below for a discussion of changes to the accounting for Financial Instruments effective January 1, 2007. Gains or losses resulting from changes in the fair value of derivative contracts are recognized in earnings and cash flows when those changes occur. None of the Corporations derivative commodity contracts qualify for hedge accounting.

Duvernay enters into most hedging transactions with the same party that the commodity is physically sold to, avoiding the need to provide credit in the event that the hedges are at prices below prevailing prices. The most significant risk with the commodity hedges is that the prevailing product prices are higher than those committed to in the hedging contract. The Corporation partially mitigates this risk by including collars in its hedging portfolio. A less significant risk relates to the Corporation's ability to supply the production at future dates. This risk is managed by entering into the hedging contracts at multiple delivery points.

At March 31, 2008 Duvernay has calculated the market value of those contracts that were unsettled at March 31 and has estimated net loss from settling these instruments to be approximately $41.0 million. Financial Statement note 1 "Significant Accounting Policies" and note 5 "Financial Instruments" provide further details.

COMMITMENTS AND CONTRACTUAL OBLIGATIONS

Other than with respect to flow-through share obligations and long-term debt commitments, there have been no other significant changes in the Company's commitments or contractual obligations from those disclosed in the December 31, 2007 Annual Management's Discussion and Analysis.

CHANGES IN DISCLOSURE CONTROLS AND PROCEDURES/INTERNAL CONTROLS OVER FINANCIAL REPORTING

There have been no material changes in the Company's disclosure controls and procedures, nor were there changes in the internal controls over financial reporting during the quarter ending March 31, 2008 from the previously reported period.

IMPACT OF NEW ENVIRONMENTAL REGULATIONS

Environmental legislation, including the Kyoto Accord, the federal government's "EcoACTION" plan and Alberta's Bill 3 - Climate Change and Emissions Management Amendment Act, 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.

Given the evolving nature of the debate related to climate change and the resulting requirements, it is not possible to determine the operational or financial impact of those requirements on Duvernay.

CHANGES IN ACCOUNTING POLICIES

FINANCIAL INSTRUMENTS/OTHER COMPREHENSIVEINCOME/HEDGES

Additional disclosure requirements for financial instruments have been approved by the CICA, and were adopted by the Company as of January 1, 2008. Refer to note 4 "Capital Management" and Note 5 "Financial Instruments" for further details.

IMPACT OF CHANGES IN ALBERTA ROYALTY REGULATIONS

On October 25, 2007, the Government of Alberta announced changes to conventional oil and gas royalties. These changes are to be implemented effective January 1, 2009. Using currently available information, Duvernay has estimated that the impact on 2007 cash flow based on current gas prices would result in approximately a 7% cash flow reduction. The Alberta Deep Gas Royalty holiday will be eliminated, replaced under the new system by a royalty rate adjustment for "Deep Marginal Gas Wells". Based on the average depth of a Duvernay Deep Basin gas well the impact on full cycle project economics is expected to be minimal.

On April 10, 2008 the October 25, 2007 announcement was changes by Alberta Energy due to "unintended consequences". The new deep resources program for natural gas exploration and development wells is estimated to reduce the effective Alberta Royalty rates by between 3 and 4 percent based on historical activity levels and depths. This translates into a corporate improvement in cash flows of between four and six percent based on 2007 as prices. This essentially offsets the negative cash flow impact estimated by the corporation that resulted from the October 25, 2007 New Royalty Framework announcement.



SELECT QUARTERLY INFORMATION

2008 2007
----------------------------------------------------------
Q1 Q4 Q3 Q2 Q1
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PRODUCTION

Crude oil and
liquids (bbls) 216,172 184,732 205,034 247,865 202,719

Gas (mcf) 11,862,401 11,046,655 9,834,454 9,930,573 10,060,881

Oil equivalent
(boe) 2,193,239 2,025,840 1,844,110 1,902,961 1,879,533

Crude oil and
liquids (bbls/d) 2,376 2,008 2,229 2,724 2,252

Gas (mcf/d) 130,256 120,072 106,896 109,127 111,788

Oil equivalent
(boe/d) 24,102 22,020 20,045 20,912 20,884
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FINANCIAL

($ thousands,
unless noted)

Gross revenue, net
of royalties (2) 55,030 86,536 63,531 84,880 74,976

Cash flow from
operations 78,010 49,800 55,794 64,871 68,757

Funds from
operations 73,152 69,094 45,107 59,757 63,696

Per share basic 1.24 1.17 0.79 1.06 1.16

Net earnings (10,261) 28,432 3,529 18,643 10,688

Per share basic (0.17) 0.49 0.06 0.33 0.19

Per share diluted (0.17) 0.48 0.06 0.33 0.19

Total assets 1,719,361 1,613,649 1,506,322 1,408,797 1,376,671

Bank debt 464,364 449,377 399,452 399,452 374,585

Cash and working
capital
(deficiency) (117,344) (76,355) (88,556) (7,213) (72,948)

Basic outstanding
Shares 59,672 58,482 57,445 57,357 55,608
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PER UNIT

Gas, net of
transportation
($/mcf) 7.70 6.79 6.23 7.54 8.05

Crude oil and
liquids, net of
transportation
($/bbl) 88.03 81.56 71.76 62.11 62.00

Revenue, net of
transportation
($/boe) 50.33 44.46 41.27 47.46 50.68(1)

Operating netback
($/boe) 35.71 37.06 27.51 34.30 35.97(1)
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2006
Q4 Q3 Q2
---------------------------------

PRODUCTION

Crude oil and
liquids (bbls) 196,225 170,051 111,557

Gas (mcf) 8,885,624 7,836,912 7,823,061

Oil equivalent
(boe) 1,677,162 1,476,203 1,415,401

Crude oil and
liquids (bbls/d) 2,133 1,848 1,226

Gas (mcf/d) 96,583 85,184 85,968

Oil equivalent
(boe/d) 18,230 16,046 15,554
----------------------------------------------------------------------------


FINANCIAL

($ thousands,
unless noted)

Gross revenue, net
of royalties (2) 72,472 60,355 52,183

Cash flow from
operations 53,904 32,940 41,868

Funds from
operations 55,845 46,081 39,009

Per share basic 1.05 0.88 0.75

Net earnings 12,242 12,309 21,677

Per share basic 0.23 0.24 0.42

Per share diluted 0.23 0.23 0.40

Total assets 1,272,571 1,173,784 1,022,445

Bank debt 324,590 296,703 271,692

Cash and working
capital
(deficiency) (93,537) (87,959) (6,154)

Basic outstanding
Shares 53,962 52,605 52,307
----------------------------------------------------------------------------

PER UNIT

Gas, net of
transportation
($/mcf) 7.25 6.62 6.55

Crude oil and
liquids, net of
transportation
($/bbl) 56.17 73.07 75.49

Revenue, net of
transportation
($/boe) 45.00 43.58 42.18

Operating netback
($/boe) 34.92 32.42 29.28
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Duvernay's quarterly growth in production volumes, gross revenue and per
share funds from operations is primarily attributed to an active and
successful exploration and development drilling program.

(1) restated to include realized hedging gains
(2) includes the effects of the unrealized gain/losses on financial
instruments


BALANCE SHEET

March 31, December 31,
(Unaudited) (Thousands of dollars) 2008 2007
----------------------------------------------------------------------------
ASSETS
Current assets:
Accounts receivable $ 62,762 $ 61,171
Prepaid expenses and deposits 925 1,148
Fair value of financial instruments (note 6) - 728
Future income tax recovery 12,212
----------------------------------------------------------------------------
75,899 63,047
Investment 15,000 15,000
Property, plant and equipment (note 2) 1,628,462 1,535,602
----------------------------------------------------------------------------
$ 1,719,361 $ 1,613,649
----------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 151,236 $ 138,342
Fair value of financial instruments
(note 6) 42,007 1,060
----------------------------------------------------------------------------
193,243 139,402

Long-term debt (note 3) 464,367 449,377
Asset retirement obligations 16,333 15,424
Future income taxes 155,852 128,877



Shareholders' equity:
Share capital (note 4) 667,448 649,473
Contributed surplus (note 4) 25,301 24,018
Retained earnings 196,817 207,078
----------------------------------------------------------------------------
889,566 880,569
----------------------------------------------------------------------------
Subsequent Event (Note 6)
$ 1,719,361 $ 1,613,649
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to interim financial statements


INTERIM STATEMENTS OF EARNINGS,
COMPREHENSIVE INCOME AND RETAINED EARNINGS

Three Months Ended March 31
-----------------------------
(Unaudited) (Thousands of dollars except per
share amounts) 2008 2007
----------------------------------------------------------------------------
Revenue:
Petroleum and natural gas sales $ 121,357 91,845
Realized gain on financial instruments (8,066) 5,836
Unrealized gain (loss) on financial
instruments (note 6) (40,933) (7,309)
----------------------------------------------------------------------------
72,358 90,372
Royalties (20,082) (17,167)
Processing and other income 2,764 1,771
----------------------------------------------------------------------------
55,040 74,976
Expenses:
Operating 11,994 10,481
Transportation 2,895 2,420
General and administrative 1,794 1,246
Stock-based compensation 2,589 1,912
Interest 6,138 4,442
Depletion, depreciation and accretion 46,576 38,914
----------------------------------------------------------------------------
71,986 59,415
----------------------------------------------------------------------------
Earnings (loss) before taxes (16,946) 15,561
Future income tax (reduction) (6,685) 4,873
----------------------------------------------------------------------------
Net earnings (loss) and comprehensive income (10,261) 10,688
Retained earnings, beginning of period 207,078 145,785
----------------------------------------------------------------------------
Retained earnings, end of period $ 196,817 156,473
----------------------------------------------------------------------------
Net earnings per share: (Note 4g)
Basic $ (0.17) 0.19
Diluted (0.17) 0.19
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to interim financial statements.


INTERIM STATEMENTS OF CASH FLOWS

Three Months Ended March 31
-----------------------------
(Unaudited) (Thousands of dollars) 2008 2007
----------------------------------------------------------------------------
Cash provided by (used in):
Operations:
Net earnings (loss) $ (10,261) 10,688
Items not involving cash:
Depletion, depreciation, and accretion 46,576 38,914
Stock-based compensation 2,589 1,912
Future income tax (reduction) (6,685) 4,873
Unrealized loss (gain) on financial
instruments 40,933 7,309
Change in non-cash operating working capital 4,858 5,061
----------------------------------------------------------------------------
78,010 68,757
Financing:
Issue of common shares, net of issue costs 36,182 42,072
Increase in long-term debt 14,990 49,995
----------------------------------------------------------------------------
51,172 92,067
Investments:
Additions to property, plant, and equipment (136,593) (136,734)
Property (acquisitions)/dispositions - (731)
Change in non-cash working capital 7,411 (23,359)
----------------------------------------------------------------------------
(129,182) (160,824)
Increase (Decrease) in cash - -
Cash, beginning of period - -
----------------------------------------------------------------------------
Cash, end of period - -
----------------------------------------------------------------------------
Cash tax $ - -
Cash interest $ 4,783 5,359
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to interim financial statements.


NOTES TO FINANCIAL STATEMENTS

Information as at March 31 and for the three months ended is unaudited

(Tabular Amounts in Thousands of Dollars)

1. SIGNIFICANT ACCOUNTING POLICIES:

The financial statements of the Corporation have been prepared by management in accordance with Canadian generally accepted accounting principles for Interim Financial Statements. These interim financial statements follow the same accounting policies and methods as the financial statements for the year ended December 31, 2007, except as noted below, and include all adjustments necessary to present fairly the results for the interim period. Certain information and footnote disclosure normally included in the annual financial statements has been omitted. These interim financial statements should be read in conjunction with the financial statements and notes for the year ended December 31, 2007.

2. PROPERTY, PLANT & EQUIPMENT:

The cost of unproven lands and seismic costs at March 31, 2008 of $60.6 million (December 31, 2007 - $111.6 million) has been excluded from the depletion calculation.

General and administrative expenditures of $2.9 million (December 31, 2007 - $10.2 million) have been capitalized and included as costs of petroleum and natural gas properties. Included in this amount is the year to date non-cash related stock-based compensation of $1.9 million, which includes the associated future tax liability of $0.5 million.

3. LONG-TERM DEBT:

The Corporation has a syndicated financing arrangement with a group of Canadian Chartered banks for an extendible revolving loan in the amount of $490 million in addition to a $25 million operating line. The terms of this agreement are unchanged from the previous credit agreement. The facility has a renewal date of May 2008. As at March 31, 2008, $464.4 million of this term loan was drawn.

4. CAPITAL:

(A) AUTHORIZED:

Unlimited number of common shares and Class A common shares

Unlimited number of first preferred shares and second preferred shares, each issuable in series.



(B) COMMON SHARES ISSUED:

Number of Shares Amount
----------------------------------------------------------------------------
Balance, December 31, 2007 58,481,774 $ 649,473
For cash on private placement of
flow-through shares 720,000 30,420
For cash on exercise of stock options 469,769 7,674
Contributed surplus on exercise of stock options 2,701
Share issue costs (1,912)
Tax effect on share issue costs 533
Tax effect on flow-through renunciation (21,441)
----------------------------------------------------------------------------
Balance, March 31, 2008 59,671,543 $ 667,448
----------------------------------------------------------------------------
----------------------------------------------------------------------------


(C) FLOW-THROUGH SHARES:

At March 31, 2008 the Corporation estimates that it has fully spent the $41.5 million of the February 2007 flow-through offering and has a $15.1 million remaining of the obligation for the October 2007 flow-through offering, which must be completed by December 31, 2008. The full amount of the March 2008 flow-through obligation remains to be spent, which must be completed by December 31, 2009.



(D) CONTRIBUTED SURPLUS:

----------------------------------------------------------------------------
Contributed surplus, December 31, 2007 $ 24,018
Stock-based compensation 3,984
Exercise of stock options (2,701)
----------------------------------------------------------------------------
Contributed surplus, March 31, 2008 $ 25,301
----------------------------------------------------------------------------
----------------------------------------------------------------------------


(E) STOCK OPTIONS:

The Corporation has a stock option plan. Under the employee stock option plan, the Corporation may grant options to its employees for up to 10% of outstanding common stock. The exercise price of each option equals the market price of the Corporation's stock on the date of grant and an option's maximum term is five years. Options are granted throughout the year and vest 1/3 on each of the first, second and third anniversaries from the date of grant.

Changes in the number of options, with their weighted average exercise price, are summarized below:



Number of Weighted average
Options exercise price
----------------------------------------------------------------------------
Stock options outstanding, beginning
of period 5,777,818 $ 30.21
Granted 110,000 36.71
Exercised (469,769) 16.34
----------------------------------------------------------------------------
Stock options outstanding, end of period 5,418,049 $ 29.30
----------------------------------------------------------------------------
----------------------------------------------------------------------------


(F) STOCK-BASED COMPENSATION:

The weighted average fair value of the stock options granted during the period was $14.06 (2007 - $11.67) per option and is estimated on the date of grant using the Black-Scholes option-pricing model with weighted average assumptions for grants as follows:



Three Months Ended March 31
----------------------------------------------------------------------------
2008 2007
----------------------------------------------------------------------------
Risk-free interest rate (%) 4.0 - 4.5 4.5
Expected life (in years) 3.5 3.5
Expected volatility (%) 35 30
Expected forfeitures (%) 10 10
----------------------------------------------------------------------------
----------------------------------------------------------------------------


(G) PER SHARE AMOUNTS:

Per share amounts have been calculated on the weighted average number of shares outstanding. The weighted average shares outstanding for the quarter ended March 31, 2008 was 58,880,579. Due to the net loss realized in the quarter, earnings per share and diluted earnings per share for the quarter ending March 31, 2008 are equal.

(H) CAPITAL MANAGEMENT:

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain the future development of the business. The Company considers it capital structure to include shareholders' equity, bank debt and working capital. In order to maintain or adjust the capital structure, the Company may from time to time issue shares and adjust its capital spending to manage current and projected debt levels. The annual and updated budgets are approved by the Board of Directors.

The key measures that the Company utilizes in evaluating its capital structure are total debt adjusted for unrealized gains and losses on financial instruments to cash flow from operations (before changes in non-cash working capital) and the current credit available from its creditors in relation to the Company's budgeted capital program. Debt adjusted for unrealized gains and losses on financial instruments to cash flow from operations (before changes in non-cash working capital) represents a measure of the time it is expected take to pay off the debt (adjusted for unrealized gains and losses on financial instruments) if no further capital expenditures were incurred and if cash flow from operations before changes in non-cash working capital in the next year was equal to the amount in the most recent quarter annualized. At March 31, 2008 total debt adjusted for unrealized hedging losses was $551.9 million and annualized first quarter 2008 cash flow from operations before changes in non-cash working capital for the twelve months ending March 31, 2008 was $292.6 million, resulting in a ratio of 1.89. This is within an acceptable range for the Company.

The Company's share capital is not subject to external restrictions, however the bank debt facility is based on petroleum and natural gas reserves and certain financial covenants (see note 3). The Company has not paid or declared any dividends since the date of incorporation, nor are any contemplated in the foreseeable future. There were no changes in the Company's approach to capital management since December 31, 2007.

5. FINANCIAL INSTRUMENTS:

Cash and cash equivalents are designated as held-for-trading and are measured at carrying value, which approximates fair value due to the short-term nature of these instruments. Accounts receivable and accrued revenues are designated as loans and receivables. The investment is a non-speculative, non-derivative portfolio investment that is not quoted in an active market, therefore it has not been marked-to-market. Accounts payable and accrued liabilities and long-term debt are designated as other liabilities. Risk management assets and liabilities are derivative financial instruments classified as held-for-trading, see further discussion below.

The Company measures and recognizes embedded derivatives separately from the host contracts when the economic characteristics and risks of the embedded derivative are not closely related to those of the host contract, when it meets the definition of a derivative and when the entire contract is not measured at fair value. Embedded derivatives are recorded at fair value. The Company does not have any material embedded derivatives which required separate recognition and measurement.

Prior to January 1, 2007, transaction costs were recorded as deferred charges and recognized in net earnings on a straight-line basis over the life of the financial instrument. Transaction costs as at January 1, 2007 are amortized using the effective interest rate method, for all related costs incurred to the end of 2007. All transaction costs incurred subsequent to December 31, 2007 are expensed as incurred.

The Company has exposure to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Market risk

The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Board has implemented and monitors compliance with risk management policies.

The Company's risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to market conditions and the Company's activities.

CREDIT RISK

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from joint venture partners and petroleum and natural gas marketers.

Receivables from petroleum and natural gas marketers are normally collected on the 25th day of the month following production. The Company's policy to mitigate credit risk associated with these balances is to establish marketing relationships with creditworthy purchasers. The Company historically has not experienced any collection issues with its petroleum and natural gas marketers. Joint venture receivables are typically collected within one to three months of the joint venture bill being issued to the partner. The Company attempts to mitigate the risk from joint venture receivables by obtaining partner approval of significant capital expenditures prior to expenditure. However, the receivables are from participants in the petroleum and natural gas sector, and collection of the outstanding balances is dependent on industry factors such as commodity price fluctuations, escalating costs and the risk of unsuccessful drilling, in addition further risk exists with joint venture partners as disagreements occasionally arise that increase the potential for non-collection. The Company does not typically obtain collateral from petroleum and natural gas marketers or joint venture partners; however the Company does have the ability to withhold production from joint venture partners in the event of non-payment.

The Company monitors the age of and investigates issues behind its receivables that have been past due for over 60 days. The Company's accounts receivable balance at March 31, 2008 is $62.8 million. Approximately 5% of this balance has an outstanding age of greater than 90 days, which is distributed among more than 10 creditors. Likewise, 3% is greater than 60 days in age. The Company is satisfied though is investigations that these amounts are entirely collectible.

The carrying amount of accounts receivable and cash and cash equivalents represents the maximum credit exposure. The Company does not have an allowance for doubtful accounts as at March 31, 2008 and 2007 and did not provide for any doubtful accounts nor was it required to write-off any receivables during the periods ended March 31, 2008 and 2007.

LIQUIDITY RISK

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they are due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions without incurring unacceptable losses or risking harm to the Company's reputation.

The Company's accounts payable and accrued liabilities balance at March 31, 2008 is $151.2 million. It is the Company's policy to pay suppliers within 90 days, these terms are consistent with industry. As at March 31, 2008 less than 0.5% of the account balance is greater than 90 days. The Corporation reviews all balances that have been outstanding for greater than 90 days, and has determined that acceptable business reasons exist for these accounts to be outstanding.

The Company prepares annual capital expenditure budgets, which are regularly monitored and updated as considered necessary. Further, the Company utilizes authorizations for expenditures on both operated and non-operated projects to further manage capital expenditures. To facilitate the capital expenditure program, the Company has a revolving reserve based credit facility, as outlined in note 3, which is at least reviewed annually by the lender. The Company also attempts to match its payment cycle with collection of petroleum and natural gas revenues on the 25th of each month.

MARKET RISK

The Company utilizes both financial derivatives and physical delivery sales contracts to manage market risks. All such transactions are conducted in accordance with the risk management policy that has been approved by the Board of Directors.

Currency risk has no impact on the value of the financial assets and liabilities on the balance sheet at March 31, 2008. Changes in the U.S. to Canadian exchange rate, however, could influence future petroleum and natural gas prices would could impact the value of certain derivative contracts. This influence can not be accurately quantified,

The Company is exposed to interest rate risk via fluctuations on its bank debt which bears a floating rate of interest. The Company had no interest rate swap or financial contracts in place as at or during the period ended March 31, 2008.

Commodity price risk is the risk that the fair value or future cash flows will fluctuate as a result of changes in commodity prices. The Company has attempted to mitigate commodity price risk through the use of various financial derivative and physical delivery sales contracts. In regards to commodity prices, a ten cent change in the price per thousand cubic feet of natural gas would have impacted net earnings by approximately $2.5 million for the first quarter 2008, while a change in the price of barrel of oil of one dollar would have impacted earnings by $0.1 million.

The Company has entered into certain financial derivative and physical delivery sales contracts in order to manage commodity risk. These instruments are not used for trading or speculative purposes. The Company has not designated its financial derivative contracts as effective accounting hedges, even though the Company considers all commodity contracts to be effective economic hedges. As a result, all such commodity contracts are recorded on the balance sheet at fair value, with changes in the fair value recognized in petroleum and natural gas sales, settlements are recognized in petroleum and natural gas sales at the time each transaction under a contract is settled.

The following table reconciles the changes in the fair value of financial instruments outstanding on March 31, 2008:



Fair value of Financial Instruments March 31, 2008
----------------------------------------------------------------------------
Balance, January 1, 2008 $ (332)
Unrealized loss on financial instruments (41,675)
----------------------------------------------------------------------------
Fair value of financial instrument asset, March 31, 2008 -
Fair value of financial instrument liability, March 31, 2008 (42,007)
----------------------------------------------------------------------------
----------------------------------------------------------------------------


As at March 31, 2008, the Corporation had fixed the price applicable to future production as follows:




Remaining Fair
Volume Term Pricing Value
----------------------------------------------------------------------------

AECO Fixed Price 12,000 gjs/day April - $7.43 cdn/gj $ (5,184)
December 2008 average

AECO Fixed Price 38,000 gjs/day April - $7.01 cdn/gj (15,040)
October 2008 average

AECO Fixed Price 10,000 gjs/day April - $6.51 cdn/gj (7,116)
December 2008 average

AECO Fixed Price 15,000 gjs/day November 2008 $8.65 cdn/gj (2,281)
- March 2009 average

AECO Written Call 10,000 gjs/day April - (2,768)
October 2008 $7.00 cdn/gj

Stn #2 Fixed Price 15,000 gjs/day April - $7.30 cdn/gj (5,216)
October 2008 average

AECO Costless April - $8.00 cdn/gj
Collar 10,000 gjs/day October 2008 ceiling/
$6.70 cdn/gj
floor (2,583)

WTI Fixed Price 100 bbls/day April - $90.70 U.S.
June 2008 /bbl (95)

WTI Fixed Price 300 blls/day April - $89.26 U.S.
December 2008 /bbl average (863)

WTI Fixed Price 100 blls/day April - $88.10 U.S.
June 2008 /bbl (119)
----------------------------------------------------------------------------
$ (41,265)
----------------------------------------------------------------------------
----------------------------------------------------------------------------


6. SUBSEQUENT EVENTS:

On May 6, 2008 Duvernay completed an equity financing issuing 2,000,000 common shares on a at an issue price of $45.50 per share for gross proceeds of $91.0 million.

Subject to financing, Duvernay has sold certain non-core producing assets. This transaction is expected to close in the second quarter.

CONFERENCE CALL

A conference call will be held at 1000hr MST (1200hr EST) today. To listen to the conference call please dial 416.644.3421 in Toronto, or 800.594.3615 outside of Toronto. The reservation ID# is 21269080.

The conference call replay will be available from 11:30 on May 8, 2008 until 23:59 on May 16, 2008 by dialing 416.640.1917 in Toronto or 877.289.8525 outside of Toronto (toll free). The Passcode will be 21269080#.

FORWARD LOOKING INFORMATION

Certain information set forth in this press release contains forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Duvernay'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 industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Duvernay'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 Duvernay will derive therefrom. Duvernay disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as expressly required by applicable securities laws.

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 equivalent (6:1). Barrel of oil equivalents (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6mcf:1bbl of oil is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Additional information about Duvernay Oil Corp. may be found in documents filed on SEDAR at www.sedar.com and which are also available on Duvernay's website www.duvernayoil.com.

Contact Information

  • Duvernay Oil Corp.
    Michael Rose
    President and C.E.O.
    (403) 571-3600
    or
    Duvernay Oil Corp.
    Brian Robinson
    Vice-President, Finance and C.F.O.
    (403) 571-3609
    or
    Duvernay Oil Corp.
    Scott Kirker
    Manager - Corporate Affairs
    (403) 571-3683
    or
    Duvernay Oil Corp.
    1500 - 202 6th Avenue S.W.
    Calgary AB T2P 2R9
    (403) 571-3600
    (403) 269-6510 (FAX)
    Email: info@duvernayoil.com
    Website: www.duvernayoil.com