Excelsior Energy Limited

Excelsior Energy Limited

April 25, 2007 15:34 ET

Excelsior to Restate 2006 Interim Financial Statements

CALGARY, ALBERTA--(CCNMatthews - April 25, 2007) - Excelsior Energy Limited (CNQ:EXEL) ("Excelsior" or "the Company")

During the preparation of the Company's annual financial statements for the 15 month period ended December 31, 2006, it was determined the measurement and classification of certain transactions/estimates during the period was incorrect and not in accordance with Canadian generally accepted accounting principles. The transactions for which restatement is required occurred, and were initially accounted for, prior to the amalgamation on September 7, 2006 and the resulting change in the management of the Company. After reviewing the nature of the transactions and considering the most appropriate treatment under Canadian GAAP, the Board of Directors, acting on the unanimous recommendation of management and the Audit Committee, approved restatement of the interim periods affected. These transactions have been accurately reflected in the audited financial statements as at December 31, 2006, which will be filed shortly.

The following transactions require restatement in the period in which the transaction occurred:

- Stock based compensation expense during the period was overstated as a result of an error in the calculation of the fair value of stock options granted and warrants issued. In addition, the fair value of warrants issued in connection with various financings was incorrectly expensed instead of being applied to reduce share capital. During the period, as applicable by quarter, stock based compensation expense will be reduced by an aggregate of $565,682, share capital will be reduced by $397,999 and contributed surplus will be reduced by $167,683 .

- Certain fees for share issuances, and capital costs relating to a North Sea asset subsequently written off in the quarter ended December 31, 2006, all of which were expensed in the interim periods, should have been capitalized or charged against shareholders' equity. Consequently:

-- general and administrative expenses for prior quarters will be reduced by $262,646;

-- operating costs for prior quarters will be reduced by $46,880;

-- depletion and depreciation for prior quarters will be reduced by $15,626;

-- share capital at December 31, 2006 will be reduced by $47,320; and

-- petroleum and natural gas properties at December 31, 2006 were unchanged although the carrying value of the properties during the interim periods varied from those previously reported by $277,832;

- Cash will increase and general and administrative expenses will be reduced by $43,063 in the quarter ended September 30, 2006 resulting from a duplicate entry.

- Recognition of certain net revenues for the quarter ended September 30, 2006 were inadvertently duplicated. Consequently, for this quarter, revenue will be reduced by $20,893, royalty expense will be reduced by $12,330, operating costs will be reduced by $1,518 and accounts receivable will be reduced by $7,045.

The total cumulative effect of the foregoing adjustments for the 2006 interim periods is a $926,852 reduction in the previously reported net loss of $2,320,433 for the 12 month period ended September 30, 2006. Excelsior will re-file the 2006 interim period financial statements in due course.

About Excelsior Energy:

The Company is active in oil sands exploration and appraisal in the Hangingstone area near Fort McMurray, Alberta and will hold a 52.5% working interest in 39 contiguous sections on completion of its farmin obligations. The Company also holds a 100% working interest in Blocks 16/1a and 16/6c in the UK North Sea and minor interests in gas production in Alberta.

The Company strategy is to capture oil and gas appraisal and development opportunities where we can leverage management's diverse international experience and field development expertise. This includes heavy oil reservoir engineering and development of complex fields. The scale of the oil sands resource opportunity in Alberta complements Excelsior's international portfolio.

Forward-Looking Statements: This news release contains statements about future events that are forward looking in nature and, as a result, are subject to certain risks and uncertainties such as changes in plans or the occurrence of unexpected events. Actual results may differ from the estimates provided by management. Readers are cautioned not to place undue reliance on these statements.

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