Eagle Rock Exploration Ltd.
TSX VENTURE : ERX

Eagle Rock Exploration Ltd.

November 29, 2006 11:00 ET

Eagle Rock Exploration Announces Third Quarter Results and Operational Update

CALGARY, ALBERTA--(CCNMatthews - Nov. 29, 2006) - Eagle Rock Exploration Ltd. ("ERX") (TSX VENTURE:ERX) announces its third quarter results and a brief operational update.

Third quarter revenues decreased from $1,248,882 in the second quarter to $1,085,758 in the third quarter, due to reduced commodity prices and expected production declines. Cash flow to the end of the third quarter was $859,052 with a working capital surplus of $2,650,419.

In mid-September, 2006, ERX acquired control of Sword Energy Limited ("Sword"), a private oil and gas company, by purchasing 93.02% of the outstanding common shares of Sword in exchange for 12,664,466 common shares of ERX. This acquisition enabled ERX to become the operator of, and accelerate its development program in, the Red Coulee area of Southern Alberta, during the 4th quarter of 2006. Subsequently, in October 2006, ERX issued an additional 950,000 common shares to acquire the balance of the outstanding common shares of Sword, providing it with 100% ownership.

The production facility at Red Coulee is expected to be on production in early December and will be in a position to handle up to 10,000 barrels of oil/water emulsion per day with anticipated initial oil cuts of four (4) to six (6) percent.

At Antelope Lake in Southwest Saskatchewan, ERX is continuing to drill and delineate its new multi-zone oil field. To date, 33 (gross) wells have been drilled resulting in 23 producing oil wells, one (1) water source well, three (3) waiting on completion and six (6) abandoned wells. ERX has a 42% working interest in these wells before payout and 33.6 % after payout. ERX has received G.P.P. (good production practice) approval for a pressure maintenance program in the Upper Shaunavon formation at Antelope Lake.

ERX's current production is at approximately 500 BOE/D and management still anticipates exiting 2006 with production of approximately 800 BOE/D. Further, the Board of Directors of ERX have approved a budget of $18.5 million in fiscal 2007 for exploration and development activities.

ERX has filed with Canadian securities regulatory authorities its third quarter unaudited statements for the three and nine-month periods ended September 30, 2006, and the accompanying management's discussion and analysis, which are available at www.sedar.com or the ERX website at www.eaglerockexploration.com

Forward-looking Information

This press release includes forward-looking statements and assumptions respecting ERX's strategies, future operations, expected financial results, financial sources, commodity prices, costs of production and quantum of oil and natural gas reserves and discusses certain issues, risks and uncertainties that can be expected to impact on any of such matters. By their nature, forward-looking statements are subject to numerous risks and uncertainties that can significantly affect future results. Actual future results may differ materially from those assumed or described in such forward-looking statements as a result of the impact of issues, risks and uncertainties whether described herein or not, which ERX may not be able to control. The reader is therefore cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof and ERX undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement. In addition, the term BOE or BOE's may be misleading, particularly if used in isolation. A BOE (barrel of oil equivalent) conversion ratio of 6 Mcf per one (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.

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

Contact Information

  • Eagle Rock Exploration Ltd.
    Jim Silye
    President and Chief Executive Officer
    (403) 269-4040
    (403) 261-1978 (FAX)
    Email: jimsilye@eagler.ca