Milagro Energy Inc.

Milagro Energy Inc.

November 13, 2007 17:21 ET

Milagro Energy Inc. Announces Filing of Its Q3 Interim Report

CALGARY, ALBERTA--(Marketwire - Nov. 13, 2007) - Milagro Energy Inc. (TSX:MIG) has filed its Q3 Interim Report for the nine months ended September 30, 2007 on the System for Electronic Document Analysis and Retrieval ("SEDAR"). The Q3 can be found for viewing on the SEDAR website at

(Unaudited) Q3 Q2 % Change

Average daily production
Oil & NGLs (bbls per day) 231 203 14
Natural gas (mcf per day) 894 1,011 (12)
Equivalent barrels (BOE per day) 380 371 2

($000s except per share amounts)
Oil and gas revenue 1,801 1,730 4
Funds flow from operations, before changes
in non-cash working capital (276) (579) (52)
Per share - basic and diluted - (0.01) (100)
Net loss and comprehensive loss (1,177) (1,108) 6
Per share - basic and diluted (0.01) (0.01) -

The Company for the remainder of 2007 will focus on addressing short term debt and strengthening the balance sheet so the Company may begin to develop our large inventory of projects.

During Q3, Milagro spent $3,664,000 on capital projects. Currently 12 Boe/d is shut-in at Kakwa due to the Musreau gas plant shut down and is expected to be back on production at the end of November. The Company, with its industry partner, Encana is reviewing down spacing and additional locations in this liquid rich natural gas play at Kakwa.

Milagro upon further investigation believes that it will proceed and has made application to Saskatchewan Industry and Resources to implement an Enhanced Oil Recovery project in the Madison oil pool at Battle Creek utilizing the CO2 gas from the Duperow formation.

The CO2 flood will be designed to result in higher ultimate oil recovery than would be achieved through waterflooding. CO2 flooding of oil reservoirs from historic data show CO2 to be most effective in increasing oil recovery and significantly boosting oil production rates. Of most importance in this decision is the minimal amount of capital it will require to implement. The advantage comes from the unique situation Milagro has in that it has a natural source of CO2 and therefore has no cost in acquiring the CO2. Further advantage initially comes from no transporting or compression costs as the Duperow is a deeper reservoir at higher pressure than the Madison.

The Company has contracted an independent engineering company to evaluate the enhanced recovery project under NI 51-101.

We continue to work hard to overcome our short-term challenges and are excited about our project's potential.

Milagro is an exploration and production company engaged in the acquisition, exploration, development and production of oil and natural gas reserves in western Canada.

Per barrel of oil equivalent ("boe") amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil ("6:1"). The 6:1 conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. BOE disclosure may be misleading, particularly if used in isolation. Readers should be aware that historical results are not necessarily indicative of future performance. Funds flow from operations does not have a standardized meaning prescribed by Canadian Generally Accepted Accounting Principles ("GAAP") and therefore may not be comparable with the calculation of similar measures for other companies. Funds flow from operations as presented is not intended to represent operating profits for the period nor should it be viewed as an alternative to cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with GAAP.

Contact Information

  • Milagro Energy Inc.
    Jeffrey Rekunyk
    President & CEO
    (403) 693-4006
    Milagro Energy Inc.
    Travis Doupe
    Vice-President, Finance & CFO
    (403) 693-4007