Exceed Energy Inc.

Exceed Energy Inc.

January 02, 2007 18:36 ET

Exceed Energy Inc. Operations Update and Debenture Conversion

CALGARY, ALBERTA--(CCNMatthews - Jan. 2, 2007) - Exceed Energy Inc. (TSX VENTURE:EX.A) (TSX VENTURE:EX.B) ("Exceed" or the "Company") reports that as previously advised, the Company has commenced completion operations on its 2,390-metre test well at 7-13-78-21W5M in Normandville, Alberta. The Company holds a 50-percent working interest in the well. On December 22, 2006 the well flowed light sweet oil with no water to surface from the Beaverhill Lake formation at a rate of 1.16 cubic meters of oil per hour through a 4.7 mm choke. Following additional evaluation and completion operations, the Company plans to place the well on production in January 2007.

The 7-13 well is the first well in a projected three-well drilling program in the area. Exceed owns 10.25 gross contiguous sections of land at interests varying from 25 to 50 percent in the Normandville/Roxana area. The Company has six square kilometers of 3-D seismic over its acreage. The Company's primary oil target zones in the area are the Beaverhill Lake, Slave Point, Granite Wash and Montney.

On January 1, 2007, the $2,000,000 10% subordinated secured convertible debentures originally issued by the Company on September 15, 2005 were to mature. Prior to maturity, all debenture holders elected to convert their debentures into Class B common shares of Exceed. The Company will issue an aggregate of 1,481,477 Class B common shares from treasury to the debenture holders, which shares will be subject to a hold period expiring on April 19, 2007. This will result in a total of 2,333,602 Class B common shares being issued and outstanding. This debenture conversion reduces the Company's outstanding long term debt to nil.

Exceed Energy Inc. is a Calgary based oil and gas company engaged in the exploration, development, and exploitation of oil and gas reserves in Western Canada. Exceed's Class A and Class B shares trade on the TSX Venture Exchange under the symbols "EX.A" and "EX.B" respectively.

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.

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

Contact Information

  • Exceed Energy Inc.
    Richard Wolfli
    President and CEO
    (403) 508-1853
    (403) 508-1781 (FAX)
    Website: www.exceedenergy.com