Expedition Energy Inc.

Expedition Energy Inc.

August 24, 2006 19:50 ET

Expedition Announces Filing of 2006 Second Quarter Interim Report

CALGARY, ALBERTA--(CCNMatthews - Aug. 24, 2006) - Expedition Energy Inc. (TSX VENTURE:XPD) ("Expedition" or "Corporation") announces that the Corporation's second quarter 2006 Interim Financial Statements together with the related management's discussion and analysis have been filed. For a complete copy of the report please visit www.sedar.com or the Corporation's website at www.xpdenergy.com.

Highlights of the second quarter 2006 include:

- Revenue net of royalties of $1,297,397 compared to $552,187 in Q2 2005, an increase of 135%.

- Cash flow increased 224% to $497,686 compared to $153,546 in Q2 2005.

- Earnings of $152,124 in Q2 compared to $16,243 in the same period in 2005.

- Q2 average production of 420 boepd compared to 171 boepd in Q2 2005, an increase of 146%.

Second Quarter and Ongoing Operations

During the second quarter three (1.7 net) wells were drilled at Kerrobert SK, Ferrier AB, and Cessford AB. At Kerrobert, a vertical step out well was drilled for heavy oil. The target formation was encountered but the oil pay interval was too thin to make an economic producing well. The well has however been cased for service as a water disposal well, which will reduce the ongoing cost of operations now and in the future as the field matures. At Ferrier, a 20% working interest, non-operated well was drilled and abandoned. At Cessford, an exploratory well was drilled for oil. While the oil formation was present, it appears that it will not make an economic producer. However, the well has been cased and will be completed for up hole gas.

In July, a successful horizontal heavy oil well was drilled in N. Kerrobert and has just recently been put on production. Production results will be released once it stabilizes. In August, at Willesden Green AB (east of Ferrier), a 50% WI well has been drilled and cased for gas. Completion and test results will be released as they become available. The second quarter reflects ongoing improvements in production as the Corporation's average increased to 420 boepd as compared to 171 boepd in Q2 2005. Current production from field reports is approximately 500 boepd and is now weighted approximately 70% gas and 30% oil and NGLs. As gas prices have improved over the past six weeks, as at the time of writing the AECO spot price is $6.30 per mcf verses lows in late June and early July of $5.00 per mcf. These improved prices along with strong oil prices and the remaining portion of our drilling program, will improve revenue, cash flow and earnings as we move into the second half of this year.

For the remainder of 2006, Expedition plans to participate in drilling another 4 (1.8 net) wells. Two of these will be in the Ante Creek area, targeting light oil and gas, one will be in the Niton area, targeting gas, and one will be a deeper exploratory test in the Phoenix/Strachan area, targeting multiple zone liquids rich gas.

The term barrels of oil equivalent "boe" may be misleading, particularly if used in isolation. The boe conversion ratio used by Expedition of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions herein are derived by converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil.

This information contains forward-looking statements (forecasts) under applicable securities laws. Forward-looking statements are necessarily based upon assumptions and judgments with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, and the regulatory and legal environment. Many of these factors can be difficult to predict. As a result, the forward-looking statements are subject to known or unknown risks and uncertainties that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements.

Expedition Energy Inc. is an emerging Alberta based public corporation actively engaged in the exploration, development and production of crude oil and natural gas in Western Canada. The Company continues to follow its strategy of internally developing prospects, securing land in core areas, and growing predominantly through drilling. Selective acquisitions that support core area growth are also considered. The company strives to maintain a high working interest and operate properties. Expedition's shares are listed for trading on the TSX Venture Exchange under the symbol XPD.

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

Contact Information

  • Expedition Energy Inc.
    Scott St. John
    President and CEO
    (403) 264-1699
    (403) 264-1499 (FAX)
    Expedition Energy Inc.
    725, 435 - 4th Avenue S.W.
    Calgary, Alberta T2P 3A8
    Website: www.xpdenergy.com
    QIS Capital Corp.
    Doren Quinton
    Investor Relations
    (250) 376-8989
    Email info@qiscapital.com