Kroes Energy Inc.

Kroes Energy Inc.

November 29, 2007 17:05 ET

Kroes Energy Inc. Announces Third Quarter Results

CALGARY, ALBERTA--(Marketwire - Nov. 29, 2007) - Kroes Energy Inc.("Kroes") (TSX VENTURE:KRS) today announced its third quarter results that now reflect the August 1, 2007 disposition of its joint venture interest in Ukraine. The Company suffered a loss of $3.2 million on this discontinued operation and, when combined with a loss of $627,449 on its continuing operation, the nine month loss amounted to $3,864,034. The Company's continuing operation consists of its exploration program in western Canada and a 25% interest in a small oilfield in Trinidad.

Production from continuing operations averaged 42 barrels of oil equivalent per day (boe/d) from seven wells, compared to 7 boe/d from four wells for the same period in 2006. In the fourth quarter of 2007 three more wells in western Canada will be placed on production and three recently-acquired shut-in wells are expected to be activated in 2008. In addition, the company already has agreed to participate in the drilling of at least six wells in 2008.

Revenue from continuing operations totaled $464,139 for the nine months to September 30, 2007 and will continue to grow with additional production coming on stream in the final three months of 2007. Cash flow from continuing operations for the nine month period was negative by $177,902 but represented a considerable improvement from the comparable negative $514,830 recorded for the same period in 2006. With rapidly improving revenue and lower administrative costs due to the disposition of the Ukrainian project, the Company expects a significant positive cash flow in 2008.

In July of 2007 the Company successfully participated at an Alberta Crown land sale with the acquisition of a 25% interest in 640 acres offsetting one of our successful wells and an additional 480 acres in adjacent sections. The Company now holds 1,520 acres of developed land and 840 acres of undeveloped land in central Alberta.

Fred Callaway, President, said "We have finally put the unfortunate experience in Ukraine behind us where dramatically changed fiscal terms and unfulfilled agreements cost us dearly. We are well underway from our fresh start in western Canada in June of 2006, and we expect to have in excess of 100 boe/day of production as we exit 2007."

BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 6MCF:1Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.


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 differ 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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