PetroGlobe Inc.
TSX VENTURE : PGB

PetroGlobe Inc.

August 31, 2007 11:47 ET

PetroGlobe Inc.: 2007 Second Quarter Report

CALGARY, ALBERTA--(Marketwire - Aug. 31, 2007) - PetroGlobe Inc. (TSX VENTURE:PGB) ("PetroGlobe" or the "Company") announces that it has filed with Canadian securities regulatory authorities its financial statements for the six months and quarter ended June 30, 2007 and the accompanying Management's Discussion and Analysis. These filings are available for review under the Corporation's SEDAR profile at www.sedar.com.

"The second quarter was a time of change for PetroGlobe, culminating in changes to senior management and the Board of Directors at the Company's annual general meeting in June.

Overall, our second quarter results were disappointing. Production curtailment due to the Crystal Lake plant turnaround in June combined with reduced product prices resulted in lower earnings and cash flow from our oil and gas operations.

However, PetroGlobe is now in full turn-around mode as it continues to grow production, cut operating and general and administrative costs and prioritize capital expenditures. I am excited about the many opportunities the Company is pursuing given its large land position in both Texas and Alberta," said Jason James, Chief Executive Officer.

In Canada, PetroGlobe completed work on its trunk line and began flowing gas through the south and west lines during the second quarter. The Company's oil and gas production averaged 991 mcfd (165 boed) for the second quarter 2007 compared to 815 mcfd (136 boed) for the first quarter 2007, an increase of 176 mcfd or 22%.

In the US, through it's wholly owned subsidiary PetroGlobe Energy USA Ltd., the Company completed stimulation of five target zones it had identified in the Pennsylvanian shale of its McIntosh 1-76 well.

Also in the second quarter the Company continued to work towards bringing its McIntosh 1-77 well on-line through the completion of a pipeline and hot tap. The processing plant required to extract liquids from the natural gas from this well is currently being manufactured with a target delivery early in the fourth quarter of 2007.

Events Subsequent to June 30, 2007

In August the Company completed a private placement for 2,750,000 units or $2,062,500. Each Company unit is composed of a common share of $0.75 per share and a common share purchase warrant of $0.95. Each share purchase warrant has a two-year exercise term after which it expires.

In Alberta, PetroGlobe completed the tie in of one well that was fracture stimulated in the first quarter of 2007. The Company also stimulated three wells that were tied in but which had little to no production. The Company completed low cost coiled tubing cleanouts in three wells. These initiatives resulted in production increases of 500 mcf/d (250 mcf/d net to the Company), or a 22 % increase. The Company also completed three commitment wells under farm-in arrangements resulting in three additional sections earned.

Outlook

The Company continues to push hard to bring into production its two McIntosh wells in Texas. It is expected the high liquid content and higher natural gas netbacks in that area relative to Alberta will generate strong cash flow for the Company. More importantly, the commencement of production from Texas will begin the Company's evaluation of the production capability of the area. The Company currently expects to have production from those wells in the fourth quarter of 2007.

Lower than expected gas prices are currently a barrier to production growth for the Company in Alberta. With lower than expected gas prices the Company must address its cost structure in order to remain competitive. The Company continues to reduce operating costs, maximize production with limited capital expenditure.

ABOUT PETROGLOBE INC.

PetroGlobe Inc. is listed on the TSX Venture Exchange and trades under the symbol PGB. There are 35.9 million shares outstanding. The 52-week range is $0.68 - $2.95. Market capitalization is $28 million based on the most recent closing price of $0.78.

PetroGlobe Inc. carries on business directly in Canada. It conducts business indirectly in the United States through PetroGlobe Energy USA Ltd. Its wholly owned subsidiary, PetroGlobe (Canada) Ltd., is in the business of international oil and gas consulting.

Major properties are in the Palo Duro basin of West Texas and the Cynthia, Drayton Valley, Breton, Warburg and Leduc areas of west-central Alberta.

This press release contains forward-looking information. Actual future results may differ materially from those contemplated.

Volumes reported in barrels of oil equivalent (BOE) are based on conversion of natural gas to oil at six thousand cubic feet per barrel (6 Mcf:1 bbl). BOE may be misleading, particularly when used in isolation, since the 6 Mcf:1 bbl 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.

This press release should not be construed to be a solicitation for the purchase of the corporation's common shares.

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

Contact Information