Kroes Energy Inc.

Kroes Energy Inc.

August 29, 2007 14:01 ET

Kroes Energy Announces Second Quarter Results

CALGARY, ALBERTA--(Marketwire - Aug. 29, 2007) - Kroes Energy Inc.("Kroes" or "the Company"), (TSX VENTURE:KRS) announced today that net earnings for the first six months of 2007 were $70,082 compared to $59,047 for the same period in 2006. Cash flow from operations was $532,111 for the first six months compared to $393,087 in the previous year. Net loss for the three months ended June 30, 2007 was $26,489 compared to $57,527 for the same period in 2006. Cash flow from operations was $197,280 in the second quarter compared to $116,878 last year.

Crude oil production for the first half of 2007 averaged 230 barrels per day compared to 235 barrels per day in 2006. Crude oil prices for the first six months of 2007 averaged $60.30 compared to $55.54 per barrel the prior year. Natural gas production for the first half of 2007 averaged 213 mcf per day. There was no gas production in the first half of 2006 as Kroes had just implemented its western Canada shallow gas program. The Company has participated in eight wells in the past year of which seven have been successful. Three wells are currently on stream and four are awaiting connection to pipelines.

On August 1, 2007, the Company closed the sale of its wholly owned subsidiary, Zhoda 2001 Corporation ("Zhoda") to Shelton Canada Corporation ("Shelton"). Zhoda's only asset is a 45% interest in the Kashtan Petroleum Ltd. joint venture in Ukraine. The Company intends to focus its future activities in Western Canada.

The Company received 6,997,507 shares of Shelton as partial consideration from the sale. These shares have been distributed to Kroes' shareholders of record on August 17, 2007 on the basis of 1 Shelton share for each 5.2 Kroes' shares held on that date.

Kroes Energy is a junior oil and gas producer and explorer in western Canada and has an interest in a small oilfield in Trinidad. Shares trade on the TSX Venture Exchange under the symbol KRS.


This disclosure contains certain forward-looking estimates that involve substantial known and unknown risks and uncertainties, certain of which are beyond Kroes' control, including: the impact of general economic conditions in the areas in which the Company operates, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition, there are risks and uncertainties associated with oil and gas operations; therefore, Kroes' actual results, performance or achievement could difer materially from those expressed in, or implied by, these forward-looking estimates and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking estimates will transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, that Kroes will derive from that.

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

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