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

Exceed Energy Inc.

November 29, 2006 15:35 ET

Exceed Energy Inc. Presents Its Financial and Operating Results for the Period Ended September 30, 2006

CALGARY, ALBERTA--(CCNMatthews - Nov. 29, 2006) - Exceed Energy Inc. ("Exceed" or the "Company") (TSX VENTURE:EX.A) (TSX VENTURE:EX.B) presents its financial and operating results for the nine month period ended September 30, 2006, and announces that it has filed its financial statements, Management's Discussion and Analysis with Canadian securities regulators. These documents are available for viewing at www.sedar.com or at the company's website at www.exceedenergy.com.

Third Quarter Highlights

- Exceed's average production for the nine months ending Sept 30, 2006, up 89% from the same period in 2005.

- Two successful oil wells drilled at Spruce Grove in Q3.

- One successful gas well drilled in Cereal and one successful gas well drilled in Bashaw.

Outlook

In Roxana the Company will drill one well (0.5 net wells) in Q4 targeting the Beaverhill Lake, Slave Point, Gilwood, and Granite Wash formations. The Company has two additional 3-D identified drilling locations offsetting the initial well. Based on the initial well's results the Company may drill these wells in Q1 2007.

The Company has identified numerous drilling opportunities in the Cereal area. This is a core shallow gas producing property for the Company, one where significant activity is expected in 2007. Six wells (3.0 net wells) are planned for the first half of 2007.

In the Company's core oil property in Spruce Grove, Alberta, the Company expects to drill one well (0.2 net wells) in late Q4 2006 or Q1 2007 primarily for Detrital oil targets and a second well (0.2 net wells) for an Ellerslie oil and gas target.

The Company continues to develop numerous additional prospect areas. Details of these projects will be announced as these projects mature into dedicated drilling opportunities.

Supplemental Advisory

The Corporation also announces that Mr. Jack Mahan will be resigning effective November 30, 2006 as the CFO of the Corporation. The Company is pursing the recruitment of a new Chief Financial Officer. Candidates have been identified and are being considered.



Selected financial information

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Three month period ended Nine month period ended
Financial data 30-Sep-06 30-Sep-05 30-Sep-06 30-Sep-05
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Oil and natural
gas revenue $ 720,286 $ 610,836 $ 2,453,832 $ 1,630,009

Oil and natural
gas revenue, net
of royalties $ 531,408 $ 476,558 $ 1,784,773 $ 1,266,741
Operating expenses 125,897 82,128 388,896 358,947
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Net operating
income $ 405,511 $ 394,430 $ 1,395,877 $ 907,794

Net loss $ (301,870) $ (75,067) $ (824,680) $ (293,675)
Per share, basic $ (0.01) $ - $ (0.02) $ (0.01)
Per share,
diluted $ (0.01) $ - $ (0.02) $ (0.01)
Cash flow from
operations
(non GAAP) $ 249,696 $ 106,152 $ 903,242 $ 251,941
Per share, basic
(non GAAP) $ 0.01 $ - $ 0.02 $ 0.01
Per share,
diluted
(non GAAP) $ 0.01 $ - $ 0.02 $ 0.01
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30-Sep-06 31-Dec-05
---------------------------------------------------------------------------
Total assets $ 14,443,162 $ 13,482,422
Total liabilities $ 4,436,952 $ 4,659,517

Share capital data
Number of class A common shares 41,076,720 35,362,420
Number of class B common shares 852,125 852,125
Number of options outstanding 2,040,000 0
Average exercise price $ 0.21 $ 0.00
Number of options exercisable - -
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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.



Exceed Energy Inc.
Balance Sheets

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September 30, 2006 December 31, 2005
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Assets (Unaudited) (Audited)

Current assets
Cash and short term investments $ 3,971,553 $ 2,859,061
Accounts receivable 432,936 459,374
Prepaid expenses and deposits 43,081 23,433
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4,447,570 3,341,868

Refundable deposit (Note 3) 145,821 49,775

Property and equipment (Note 4) 9,849,771 10,090,779
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$ 14,443,162 $ 13,482,422


Liabilities and Shareholders' Equity

Current liabilities
Accounts payable and accrued liabilities $ 1,206,604 $ 1,005,148

Debenture payable (Note 7) 1,965,925 1,864,687
Asset retirement obligation (Note 6) 284,074 272,214
Future income tax 980,349 1,517,468
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4,436,952 4,659,517


Shareholders' equity
Equity instruments (Note 8) 15,119,280 13,259,275
Equity portion of convertible debenture 114,100 114,100
Contributed surplus 379,880 231,900
Deficit (5,607,050) (4,782,370)
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10,006,210 8,822,905
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$ 14,443,162 $ 13,482,422
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Indemnifications and contingencies (Note 13)
Commitments (Note 14)
The accompanying notes are an integral part of these financial statements.


Exceed Energy Inc.
Statements of Operations and Deficit

Three Three Nine Nine
month month month month
period period period period
ended ended ended ended
30-Sep-06 30-Sep-05 30-Sep-06 30-Sep-05
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(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue
Oil and natural
gas sales $ 720,286 $ 610,836 $ 2,453,832 $ 1,630,009
Royalty expense (205,245) (139,896) (747,341) (382,317)
Alberta Royalty
Tax Credit 16,367 5,618 78,282 19,049
Interest 34,383 308 77,227 12,439
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565,791 476,866 1,862,000 1,279,180
Expenses
Operating 125,897 82,128 388,896 358,947
General and
administrative 139,362 267,021 419,027 612,072
Stock based
compensation 55,317 - 147,980 946
Interest 50,836 21,565 150,835 56,220
Depletion,
depreciation and
amortization 564,385 236,669 1,991,187 691,083
Accretion of
asset
retirement
obligation 340 1,662 24,636 4,986
Accretion of
debenture issue
costs 11,875 - 35,238 -
Accretion of
debenture
obligation 22,300 - 66,000 -
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970,312 609,045 3,223,799 1,724,254

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Loss before
Income taxes (404,521) (132,179) (1,361,799) (445,074)

Income Taxes
Future Income
tax recovery (102,651) (57,112) (537,119) (151,399)
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Net loss for the
period (301,870) (75,067) (824,680) (293,675)
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Deficit,
beginning
of period (5,305,180) (4,658,898) (4,782,370) (4,440,290)

Deficit, end of
period $(5,607,050) $(4,733,965) $(5,607,050) $(4,733,965)
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Net loss per
common share
Basic and
diluted $ (0.01) $ (0.00) $ (0.02) $ (0.01)
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The accompanying notes are an integral part of these financial statements.


Exceed Energy Inc.
Statements of Cash Flows


Three Three Nine Nine
month month month month
period period period period
ended ended ended ended
30-Sep-06 30-Sep-05 30-Sep-06 30-Sep-05
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(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash provided by
(used in)
Operating
Activities
Net loss for
the period $ (301,870) $ (75,067) $ (824,680) $ (293,675)
Items not
requiring cash
Depletion,
depreciation
and
amortization 564,385 236,669 1,991,187 691,083
Accretion of
asset retirement
obligation 340 1,662 24,636 4,986
Accretion of
debenture
issue cost 11,875 - 35,238 -
Accretion of
debenture
obligation 22,300 - 66,000 -
Future tax
recovery (102,651) (57,112) (537,119) (151,399)
Stock based
compensation 55,317 - 147,980 946
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249,696 106,152 903,242 251,941
Change in
non-cash working
capital related
to operating
activities
(Note 11) (91,336) 121,138 143,510 (2,878,792)
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158,360 227,290 1,046,752 (2,626,851)
Financing
Activities
Issue of share
capital, net
of costs 1,860,005 2,894,348 1,860,005 2,856,388
Proceeds from
issuance of
debenture - 2,000,000 - -
Demand loan - (350,000) - -
Change in
non-cash working
capital balances
related to
financing
activities
(Note 11) 557 - (50,051) -
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1,860,562 4,544,348 1,809,954 2,856,388
Investing
Activities
Additions to
property and
equipment (887,958) (415,437) (2,035,500) (1,867,093)
Disposition of
property and
equipment - - 272,544 329,850
Refundable
deposit (96,046) - (96,046) -
Change in
non-cash working
capital balances
related to
investing
activities
(Note 11) (352,271) (84,575) 114,788 419,351
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(1,336,275) (500,012) (1,744,214) (1,117,892)

Increase in cash
and short-term
investments 682,647 4,271,626 1,112,492 1,111,645

Cash and
short-term
investments,
beginning of
period 3,288,906 98,776 2,859,061 3,258,757

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Cash and
short-term
investments, end
of period $ 3,971,553 $ 4,370,402 $ 3,971,553 $ 4,370,402

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Cash interest
payments $ 50,836 - $ 150,835 $ 216,310
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The accompanying notes are an integral part of these financial statements.



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