Exceed Energy Inc.
TSX VENTURE : EX.A
TSX VENTURE : EX.B

Exceed Energy Inc.

August 29, 2007 17:54 ET

Exceed Energy Announces Second Quarter 2007 Financial Results

CALGARY, ALBERTA--(Marketwire - Aug. 29, 2007) - Exceed Energy Inc. (TSX VENTURE:EX.A) (TSX VENTURE:EX.B) today announced that it has filed its unaudited financial statements and management's discussion and analysis for the period ended June 30, 2007 as well as the Company's 52-109 F2 CEO and CFO Certificates. This press release is meant to be read in concurrence with the above filed documents. Copies of these documents are available on SEDAR at www.sedar.com.

Third Quarter Outlook

Exceed Energy Inc. ("Exceed" or the "Company") currently is producing 275 BOE/D (barrels of oil equivalent). Though the company conducted completion and tie-in operations in the second quarter, as listed below, most of the production additions realized from these operations were not realized until the third quarter. In the third quarter the Company conducted completion and tie-in operations at its Hussar gas well (35% Working Interest) and expects the well to begin production in early September.

Second Quarter Operations Summary

In the second quarter the Company conducted field operations at Roxana, Twinning, Coyote, Bashaw, and Spruce Grove. The second Roxana well (30% Working Interest) was completed and brought on stream in the third quarter. A third Roxana well (50% WI) is anticipated this fall. The Twinning well (12.5% WI) was drilled and abandoned. The 10-18 Coyote well was completed and brought on stream in the third quarter. The third well (12% WI) at Bashaw in which the Company has an interest, was completed and put on production in the third quarter. The recompleted 8-35 Ellerslie well (20% WI) at Spruce Grove was put on stream in the second quarter.

The Company's second quarter production was significantly impacted by the annual spring break up and by longer than anticipated gas plant turnarounds. Production at Roxana was shut in for approximately a month due to break up, and production at Spruce Grove and Golden Spike was shut in for two to three weeks due to plant turnarounds. Just west of the Roxana, the Company holds a 30% working interest in lands in the Culp area. Exceed expects to drill the first well (30% WI) on these lands in the later half of 2007.

The Company has acquired additional acreage in the Cereal area. The Company has two drill-ready locations (50 and 100% WI, respectively) identified on Company lands.



Selected Financial Information

Selected Financial Information

Financial data Three Months Six Months Three Months Six Months
June 30, June 30, June 30, June 30,
2007 2007 2006 2006
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Oil and natural gas
revenue, net of royalties 534,407 1,111,377 609,758 1,253,365
Operating expense 171,748 257,034 152,905 262,999
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Operating netback 362,659 854,343 451,853 990,366

Net loss (264,713) (395,436) (96,605) (522,810)
Per share, basic 0.00 (0.01) (0.01) (0.01)
Per share, diluted 0.00 (0.01) (0.01) (0.01)
Cash flow from operations
(non GAAP) 139,460 482,842 285,458 653,546
Per share, basic
(non GAAP) 0.00 0.01 0.00 0.03
Per share, diluted
(non GAAP) 0.00 0.01 0.00 0.03

Total assets 14,729,474 13,430,632
Total liabilities 3,189,536 5,037,874

Share capital data 30-Jun-07 30-Jun-06
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Number of class A
common shares 41,710,007 35,362,420
Number of class B
common shares 2,333,602 852,125
Number of options
outstanding 2,104,000 2,040,000
Average exercise price 0.21 0.21
Number of options exercisable 744,000 0.00
Number of compensation
warrants exercisable 371,429 0.00
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Exceed Energy Inc.

Balance Sheets

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June 30, 2007 December 31, 2006
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Assets (unaudited) (audited)
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Current assets
Cash and short term investments $ 2,544,182 $ 4,010,890
Accounts receivable 485,512 425,560
Prepaid expenses and deposits 89,951 32,239
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3,119,645 4,468,689

Refundable deposit (Note 3) 143,315 147,342

Property and equipment (Note 4) 11,466,514 10,620,840
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$ 14,729,474 $ 15,236,871
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Liabilities and Shareholders' Equity

Current liabilities
Accounts payable and accrued
liabilities $ 2,323,003 $ 2,415,749

Asset retirement obligation (Note 7) 231,993 174,328
Future income tax 634,540 768,797
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3,189,536 3,358,874

Shareholders' equity

Equity instruments (Note 8) 17,427,059 17,445,682
Contributed surplus (Note 8) 675,087 599,087
Deficit (6,562,208) (6,166,772)
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11,539,938 11,877,997
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$ 14,729,474 $ 15,236,871
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Indemnifications and contingencies
(Note 12)
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Commitments (Note 13)
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Subsequent events (Note 14)
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The accompanying notes are an integral part of these financial statements
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Note: Please refer to the Financial Statements and Management Discussion
and Analysis at www.sedar.com in reference to the note numbers in this
table.


Exceed Energy Inc.

Statements of Operations and Deficit

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Three Three Six Six
month month month month
period period period period
ended ended ended ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
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(unaudited) (unaudited) (unaudited) (unaudited)


Revenue
Oil and natural gas sales $ 618,806 $ 822,475 $ 1,418,740 $ 1,733,546
Royalty expense (84,399) (247,701) (307,363) (542,096)
Alberta Royalty Tax Credit - 34,984 - 61,915
Interest and other income 21,265 29,012 53,275 42,844
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555,672 638,770 1,164,652 1,296,209

Expenses
Operating 171,748 157,905 257,034 262,999
General and administrative 244,150 145,129 422,951 279,665
Stock based compensation
(Note 8) 38,000 (27,463) 76,000 92,663
Interest 313 50,278 1,824 99,999
Depletion, depreciation
and amortization (Note 4) 447,256 677,318 923,118 1,426,802
Accretion of asset
retirement obligation
(Note 7) 7,192 15,972 13,418 24,296
Amortization of debenture
issue costs - 11,746 - 23,363
Accretion of debenture
obligation - 22,000 - 43,700
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908,659 1,052,885 1,694,345 2,253,487

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Loss before taxes (352,987) (414,115) (529,693) (957,278)

Taxes
Future tax recovery 88,274 317,510 134,257 434,468
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Net loss for the period (264,713) (96,605) (395,436) (1,391,746)
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Deficit, beginning of
period (6,297,495) (5,208,575) (6,166,772) (4,782,370)

Deficit, end of period $(6,562,208)$(5,305,180) $(6,562,208)$(6,174,116)
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Net loss per common
share (Note 8)
Basic and diluted (0.00)$ (0.01) $ (0.01)$ (0.01)
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The accompanying notes are an integral part of these financial statements
----------------------------------------------------------------------------
Note: Please refer to the Financial Statements and Management Discussion
and Analysis at www.sedar.com in reference to the note numbers in this
table.



Exceed Energy Inc.

Statement of Cash Flows

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Three Three Six Six
month month month month
period period period period
ended ended ended ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
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(unaudited) (unaudited) (unaudited) (unaudited)
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Cash provided by (used in)
Operating Activities
Net loss for the period $ (264,713) $ (96,605) $ (395,436) $ (522,810)
Items not requiring cash
Depletion, depreciation
and amortization 447,256 677,318 923,118 1,426,802
Accretion of asset
retirement obligation
(Note 7) 7,192 15,972 13,418 24,296
Accretion of debenture
obligation - 22,000 - 43,700
Amortization of debenture
issue costs - 11,746 - 23,363
Future tax recovery (88,275) (317,510) (134,258) (434,468)
Stock based compensation 38,000 (27,463) 76,000 92,663
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139,460 285,458 482,842 653,546
Change in non-cash
working capital related
to operating activities
(Note 10) 85,697 284,180 (281,277) 234,846
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225,157 569,638 201,565 888,392

Financing Activities

Issue of share capital,
net of costs (18,622) - (18,622) -
Increase in demand loan - - - -
Change in non-cash
working capital
balances related to
financing activities
(Note 10) 26,093 9,779 (45,638) (50,608)
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7,471 9,779 (64,260) (50,608)

Investing Activities

Additions to property
and equipment (775,161) (602,571) (1,767,744) (1,147,542)
Dispositions of property
and equipment 43,200 272,544 43,200 272,544
Increase (Decrease) in
refundable deposit (983) 4,027
Change in non-cash working
capital balances related
to investing activities
(Note 10) 490,780 579,363 116,504 467,059
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(242,164) 249,336 (1,604,013) (407,939)

Decrease in cash and
short-term investments (9,536) 828,753 (1,466,708) 429,845

Cash and short-term
investments, beginning
of period 2,553,718 2,460,153 4,010,890 2,859,061
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Cash and short-term
investments, end of
period $ 2,544,182 $ 3,288,906 $ 2,544,182 $ 3,288,906
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Cash interest payments $ 313 $ 50,278 $ 1,824 $ 99,999

The accompanying notes are an integral part of these financial statements
----------------------------------------------------------------------------
Note: Please refer to the Financial Statements and Management Discussion
and Analysis at www.sedar.com in reference to the note numbers in this
table.


Forward Looking Statements

This press release contains forward-looking statements including expectations of future production, cash flow and earnings. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projects relating to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. The Company has also used certain measures of financial reporting that are commonly used as benchmarks within the oil and natural gas production industry. The measures discussed are widely accepted measures of performance and value within the industry, and are used by analysts and investors to compare and evaluate oil and natural gas exploration and producing entities. Most notably, these measures include operating netback and cash flows from operations. Operating netback is a benchmark used in the crude oil and natural gas industry to measure the contribution of oil and natural gas sales subsequent to the deduction of royalties and operating costs. Cash flow from operations is before changes in non-cash working capital and site restoration expenditures, and is used to analyze operations, performance and liquidity. These measures are not defined under GAAP and should not be considered in isolation or as an alternative to conventional GAAP measures. These measures and their underlying calculations are not necessarily comparable to a similarly titled measure of another entity. When these measures are used, they are defined as "non GAAP" and should be given careful consideration by the reader. The term barrels of oil equivalent ("BOE") may be misleading, particularly if used in isolation. A BOE conversion ratio for natural gas of 6:1 has been used by the Company, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value of equivalency at the wellhead. All BOE conversions in this report are derived by converting natural gas to crude oil in the ratio of six thousand cubic feet of natural gas to one barrel of crude oil. Additional information on these and other factors that could affect Exceed's operations or financial results are included in Exceed's reports on file with Canadian securities regulatory authorities that may be accessed at www.sedar.com or through the Company's website, www.exceedenergy.com.

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