Excelsior Energy Limited

Excelsior Energy Limited

April 23, 2009 17:30 ET

Excelsior Announces 2008 Results

CALGARY, ALBERTA--(Marketwire - April 23, 2009) - Excelsior Energy Limited (TSX VENTURE:ELE) ("Excelsior" or the "Company") announces that is has filed its financial statements and management's discussion and analysis for the year ended December 31, 2008. The Company has also filed its reports regarding its reserve data and other oil and natural gas information as mandated by National Instrument 51-101. The above referenced documents are available for viewing on SEDAR at www.sedar.com.

"We are excited by the opportunity that our proprietary in situ combustion technology ("COGD") could provide a lower cost and more efficient recovery process for heavy oil and bitumen. The Company is on track to submit its experimental project application by the end of June 2009 to demonstrate the technology. Two seasons of core well delineation have confirmed the high quality bitumen resource at Hangingstone which importantly, is in close proximity to infrastructure that will drive the project cycle-time and capital efficiency" said David Winter, Excelsior's President and Chief Executive Officer. "The Company continues to meet its objectives and execute its programs on schedule and on budget. Excelsior is fully funded to submit its Hangingstone COGD project application, reprocess seismic in the North Sea and cover ongoing general and administration costs to the end of 2010. We recognise that current economic conditions limit access to capital and will await the return of market stability in order to finance the COGD pilot at Hangingstone and appraisal of our North Sea properties."

2008 Highlights

- The Company completed the 2007/2008 winter drilling program in March, 2008 drilling a total of 35 core wells at Hangingstone and Surmont which represented the majority of $14.3 million of capital expenditures in 2008. The program was completed on schedule and on budget with results exceeding expectations. Fourteen of these wells contained excellent net pay thickness in excess of 20 meters, including six wells exceeding 30 meters.

- An independent engineering report on the Hangingstone asset was completed by McDaniel and Associates in July 2008, ("the Report"). The Report assigned 119 mmbbls of contingent resources, 1.59 billion barrels of discovered resource (petroleum initially in place) and a further 86 mmbbls of prospective resource. The Company updated the reports for Hangingstone and West Surmont to December 31, 2008. The updated reports assigned 132 mmbbls of contingent resources, 2.2 billion barrels of discovered resource (petroleum initially in place) and a further 85 mmbbls of prospective resource. The reports were updated to include data from two new core holes drilled in late December 2008 at Hangingstone, and nine wells drilled at West Surmont in Q1 2008, and current economic conditions and oil price forecast.

- The Company developed a proprietary in situ combustion bitumen-recovery process ("Combustion Overhead Gravity Drainage"). The COGD technology provides an opportunity to significantly improve bitumen recovery economics through both enhanced recovery gains and substantial reductions in the amount of required water, fuel gas and diluents than that used in SAGD applications. The Company has consequently suspended plans to develop Hangingstone with steam assisted gravity drainage ("SAGD") technology in favour of a strategy to deploy a COGD process.

- The Company completed two equity financings in 2008 for gross proceeds of $12.5 million. Excelsior had working capital of $11.5 million at December 31, 2008 to fund the 2008/2009 winter core drilling program at Hangingstone, an experimental COGD in situ pilot application, and general corporate expenses to the end of 2010.

- The Company restructured its holdings in Excelsior Energy North Sea Limited ("EENS") exchanging all shares of EENS for shares in ENS Energy Ltd. ("ENS"), a newly incorporated Alberta private company. Subsequent to the restructuring, ENS issued 25% of its common shares in a private placement for gross proceeds of $1.0 million. The financing had the effect of reducing the Company's equity interest in ENS from 100% to 75% as Excelsior did not participate in the financing resulting in a gain on reorganization of $614,544. The transaction segregated the Company's oil sands and North Sea assets to provide better access to capital markets for these opportunities independently.

- The Company had commitments to incur and renounce $16,425,800 of eligible expenditures by December 31, 2008, and $9,237,766 of eligible expenditures by December 31, 2009. As at December 31, 2008, the Company incurred approximately $18,080,000 of eligible expenditures. The remaining $7,583,566 of eligible expenditures to be incurred by December 31, 2009 are expected to be satisfied with the 2008/2009 winter drilling program at Hangingstone.

2009 Activity and Outlook

- Excelsior successfully completed a 29 core well delineation program in mid March at Hangingstone on schedule and on budget. Two additional areas discovered last year have been further delineated. These greatly expand the area of thick bitumen sands and confirm the excellent resource potential at Hangingstone. A new resource report incorporating all 29 new core wells by McDaniel and Associates is expected to be completed by late Q2 2009.

- All data necessary to support the experimental project application has been obtained and Excelsior expects to submit a COGD experimental project application to the Alberta Government targeted by the end of Q2 2009. Regulatory approval is expected to take approximately one year with pilot start-up anticipated for Q1 2011.

- Seismic reprocessing on licence P1500 in the UK North Sea has been completed and interpreted. A potential drilling location has been identified to test one of the prospects which is a step-out from an existing oil discovery drilled in 1996. The Company is required to commit to drill on the block by November 30, 2009, or relinquish the licence at no further cost.

- ENS was awarded licence P1691 for two new blocks in the UK North Sea at 16/1b and 16/2c in the UKCS 25th Licensing Round by DECC in March 2009. These blocks are contiguous to ENS's existing North Sea blocks and cement our acreage position around our primary prospect. The licence requires seismic reprocessing and interpretation on the blocks over the next two years.

Selected Information

($'s except weighted average shares) Dec 31, 2008 Dec 31, 2007
Gas revenue 108,001 76,335
Royalties (16,496) (16,585)
Operating expenses (35,102) (19,115)
Net gas revenue 56,403 40,635
Interest and other income 317,672 374,764
General and administrative expense 1,537,808 1,232,441
Net loss and comprehensive loss (3,401,081) (4,941,321)
Loss per share (basic and diluted) (0.03)
Capital expenditures
Petroleum and natural gas properties - cash 14,285,031 32,472,009
Cash flows
Cash flows used in operations (1,086,857) (1,023,540)
Cash flows used in investing (13,597,374) (29,692,266)
Cash flows from financing 12,583,640 42,598,497
Change in cash and cash equivalents (2,100,591) 11,882,691
Cash and cash equivalents, beginning of year 15,848,648 3,965,957
Cash and cash equivalents, end of year 13,748,057 15,848,648
Basic and diluted weighted average number of
shares outstanding 119,986,718 65,768,355

About Excelsior Energy

Excelsior is an early stage, oil sands company with 58 operated sections in the Hangingstone and West Surmont areas of the Athabasca Oil Sands Region near Fort McMurray, Alberta. The Company has developed a proprietary in situ combustion technology (Combustion Overhead Gravity Drainage "COGD") which has game-changing potential in the development and recovery of heavy oil and bitumen. An application for an experimental pilot project to field demonstrate the COGD technology will be submitted in Q2 2009 with a targeted start up in Q1 2011. In addition the Company indirectly holds a 100% working interest in UK North Sea Licences P.1500 and P.1691 covering four part-blocks through its 75% owned subsidiary ENS Energy Ltd. Excelsior's strategy is to capture oil and gas appraisal and development opportunities where we can leverage Management's diverse international operating, heavy oil and field development expertise with developing technologies to produce oil and gas.

Forward Looking Statements

This press release contains forward-looking statements. Management's assessment of future plans and operations, expected production levels, operating costs, capital expenditures, the nature of capital expenditures, methods of financing capital expenditures, future engineering reports and the timing of increases in production may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could effect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward looking statements contained in this press release are made as at the date of this press release and the Company does not undertake any obligation to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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