GFI Oil & Gas Corporation
TSX VENTURE : GFI

GFI Oil & Gas Corporation

March 13, 2007 17:48 ET

GFI Oil & Gas Corporation Announces Second Quarter 2007 Financial and Operating Results

CALGARY, ALBERTA--(CCNMatthews - March 13, 2007) -

THIS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES.

GFI Oil & Gas Corp. (TSX VENTURE:GFI) ("GFI" or the "Company") announced today that it has filed on SEDAR, its interim consolidated financial statements for the three and six months ended December 31, 2006, related Management's Discussion and Analysis, and the required interim certificates by the CEO and CFO. These documents are available at www.sedar.com or on GFI's website at www.gfioil.com.

HIGHLIGHTS

In the Company's first and second fiscal quarters ended September 30, 2006 and December 31, 2006, GFI focused principally on implementing its development programs in Indonesia and Thailand, evaluating potential producing property acquisitions and raising capital.

Indonesia

In the Glagah Kambuna Technical Assistance Contract ("Glagah Kambuna TAC"), the operator has completed a 450 square kilometer 3-D seismic program. The final data processing will not be completed until May 2007. Based, on the initial results of the survey, GFI and the operator have delineated a number of interesting prospects and leads within the Glagah Kambuna TAC. Additionally, GFI has completed a seismic inversion of the new volumes identified by the 3-D seismic. The inversion has identified the location for the next two development wells for the field. Initial work under way at the Glagah field has also confirmed a larger oil column than originally indicated by the discovery test well. Additional work is anticipated to be completed in the first quarter of calendar year 2007, to determine the need to drill a delineation well. GFI has identified a number of new exploratory leads from the new 3-D seismic.

It is now expected that production from the Kambuna field will be reached in the second half of 2008, which is later than reported in a prior press release dated June 20, 2006, when the Company was expecting production to commence in late 2007. The Company will be monitoring this situation with the operator and will provide further updates regarding this field as information becomes available.

In the Asahan Production Sharing Contract ("Asahan PSC"), geophysical efforts with the high end AVO work yielded positive results. The 3-D survey obtained over a part of the block in the latter part of 2006 will be evaluated during the first quarter of calendar year 2007. The operator also completed several site surveys during this period. The potential at the Tanjung Perling area will be the focus of the next drilling campaign in late 2007 or early 2008.

The Indonesian oil industry regulatory authority had requested further technical information with respect to the Tanjung Perling Field within the Asahan PSC. While the operator of the field was unsuccessful in satisfying the regulatory authority request prior to December 16, 2006, which is the end of the current exploration period, the operator is currently engaged with the authorities on seeking an extension to the exploration period. If the operator is unable to gain an extension to the PSC, the Company may lose beneficial interest to its property. At December 31, 2006, the costs incurred by the Company with respect to the property totaled approximately $7 million.

In the Seruway Production Sharing Contract ("Seruway PSC"), the operator has initiated a 100 square kilometer 3-D seismic program to delineate the location of the next development well for the Gurame Field. The seismic survey was completed in February 2007 and the data processing will be completed by April 2007. The operator anticipates drilling the sixth offshore well in Gurame Field in the last half of calendar 2007.

Thailand

GFI has acquired the right to increase its working interest to 60% in the Bualuang Field. GFI has made substantial progress related to project management and procurement of long lead items. The design of the production platform has been completed and a letter of intent for the fabrication contract has been issued. The Company has executed the floating production, storage and offloading vessel ("FPSO") contract and is actively engaged in discussions with drilling contractors for the development of the Bualuang Field in 2007. First production is anticipated in the first quarter of 2008. The environmental permit applications for seismic have been submitted to the government. The annual plan of development has been circulated within the Department of Mineral Fuels and the Government of Thailand and will be finalized in the first quarter of calendar year 2007.

United States

During the six months ended December 31, 2006, the Company added an additional 23,000 acres to its lease holding now totaling 83,000 gross acres in the Crystal Gas Project.

Acquisition Efforts

GFI continued its efforts to acquire properties with current production and development upside. The Company focused its efforts on Southeast Asia, South America and the Confederation of Independent States (CIS). Several significant potential acquisitions are being considered and the Company is conducting due diligence on the target properties.

Financing

On November 28, 2006, the Company closed a private placement of 65,023,292 GFI common shares at CAD $0.65 per share for gross proceeds of approximately $37,365,000 (CAD $42,265,140). On December 22, 2006, the Company closed an additional private placement of 13,876,923 GFI common shares at CAD $0.65 per share for gross proceeds of $7,793,329 (CAD $9,020,000). The proceeds will be used to further develop its Indonesia and Thailand projects and for other working capital purposes.

GFI is an internationally focused oil and gas development company, which targets previously discovered oil and gas fields that need further development known as "Greenfields". The Greenfields strategy reduces the hydrocarbon discovery risk compared to early stage exploration projects. Greenfields have one or more previously drilled wells that have tested oil or gas at potentially economic quantities.

Issued and Outstanding Common Shares: 156,444,473

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

Contact Information

  • GFI Oil & Gas Corporation
    Alexander Warmath
    Chief Executive Officer
    (281) 877-7940
    Email: awarmath@gfioil.com
    or
    GFI Oil & Gas Corporation
    Anand Marphatia
    Interim Chief Financial Officer
    (281) 877-8100
    Email: anand@gfioil.com
    or
    GFI Oil & Gas Corporation
    12707 North Freeway, Suite 425
    Houston, Texas 77060
    USA