PetroGlobe Inc.
TSX VENTURE : PGB

PetroGlobe Inc.

November 29, 2006 11:44 ET

PetroGlobe Inc. Reports Q3 2006 Results

CALGARY, ALBERTA--(CCNMatthews - Nov. 29, 2006) - PetroGlobe Inc. ("PetroGlobe") (TSX VENTURE:PGB) is pleased to announce its operating and financial results for the nine months ended September 30, 2006. PetroGlobe continues to deliver strong growth in production and revenue. The Corporation is moving ahead on its capital program in both Alberta and Texas. Highlights of the third quarter include:

- Increased oil and gas revenue by 838% to $469 thousand from $50 thousand in 2005.

- Capital expenditures increased by 421% to $3.7 million from $0.7 million in the third quarter of 2005. This reflects the Corporation's active drilling program in the Pembina area of Alberta and the commencement by its wholly owned subsidiary, PetroGlobe Energy USA Ltd. ("PGE"), of drilling the first well of a four well exploratory drilling program in the Palo Duro Basin of West Texas.

- An eleven-fold increase in production volumes to 139 boe's/d from 11 boe's/d in 2005. This marks the third consecutive quarter of growth for PetroGlobe.



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Three months Ended Nine months Ended
September 30 September 30
% %
HIGHLIGHTS (000's) 2006 2005 Change 2006 2005 Change
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FINANCIAL
Consulting revenue 1,864 2385 (22%) 6,021 5,881 2%
Oil and gas
revenue 469 50 838% 866 154 462%
Cash flow from
operations (i) 2 6 (67%) (267) 43 (721%)
Net (loss) income (115) 17 (776%) 208 (3) 7,033%
Per share - basic 0.00 0.00 0.01 (0.00)
Per share -
diluted 0.00 0.00 0.01 (0.00)
Capital
expenditures
(net) 3,662 703 421% 7,888 3,611 118%
Short term debt 0 0 - 0 0 -
Shareholders'
equity 16,880 8,440 100% 16,880 8,440 100%
Total assets 22,434 11,631 93% 22,434 11,631 93%

September December
As at 30 31 %
2006 2005 Change
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Working capital surplus (deficit) 2,870 4,030 (29%)
Shareholders' Equity 16,880 10,732 57%
Total Assets 22,434 15,055 49%
Common shares outstanding 26,891,248 21,796,912 23%
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(i) Cash flow from operations represents earnings (loss) before depletion,
depreciation and accretion, stock- based compensation and future taxes.


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Three months Ended Nine months Ended
Operations September 30 September 30
Period ended % %
June 30 2006 2005 Change 2006 2005 Change
---------------------------------------------------------------------------

Average daily
production
Natural gas
(mcf/day) 764 67 1041% 442 81 446%
Oil (bbl/day) 11 - 4 -
Boe's/day - net
share 139 11 1143% 78 14 477%

Average prices
Natural gas
(CAD$/Mcf) 5.67 8.15 (30%) 6.09 6.89 (12%)
Oil (CAD $/bbl) 69.64 - 69.96 -
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OPERATIONS

In the third quarter of 2006, PetroGlobe's oil and gas revenues were up substantially over those of 2005. Production volume increases more than offset a decline in natural gas prices over last year. In addition to an increase in gas production, the Corporation brought two oil wells onto production in the quarter. Oil and gas revenues increased by 838% in this quarter versus the third quarter of 2005, and they were 152% higher than those earned in the second quarter of this year.

EXPLORATION AND DEVELOPMENT

Significant progress has been achieved for both the Alberta and Texas operations to date. We expect that success to continue through to the end of the year.

Alberta:

In Alberta, PetroGlobe continued to explore the lands it has farmed into in the Pembina area. Ten additional shallow natural gas wells (6.5 net) were drilled in the third quarter. The Corporation was also actively engaged in obtaining all the necessary surface rights to construct the gathering and trunk lines required to get all of its previously drilled but as yet un-connected wells tied-in and brought on production. This construction work continues on in the fourth quarter.

By year-end 2006, the Corporation will have added 10 additional gas wells (4.5 net) to the six (2.7 net) gas wells presently on production in the Pembina area. In this area, it is anticipated that eight additional gas wells (4.1 net) will be drilled by the Corporation in the fourth quarter.

Texas:

The Corporation's wholly owned subsidiary, PGE, continues to be active in the Palo Duro Basin in the West Texas region. Following land acquisition work throughout 2005 and 2006, PGE had accumulated land holdings of approximately 100,000 gross acres (55,000 net) in the Floyd, Swisher, and Hale Counties for which it is the operator. These lands are in addition to the 63,000 gross acre block of land (6,300 net) in the Motley and Floyd Counties operated by Bankers Petroleum.

The McIntosh 1-77 exploratory well in Floyd County, the first of a planned four well exploratory drilling program operated by PGE, was spudded in mid-September. PGE has a 55% working interest in the well. In October it was announced that the well had successfully reached total depth at 9,900 feet, and that natural gas was encountered while drilling through the Pennsylvania shale and Granite Wash sequence. PGE is presently completing an extended flow test on this well. It is premature to draw any conclusions as to the commerciality of this gas find.

The Corporation has since gone on to drill the second well, Young 1-32. Testing will begin on a prospective oil zone within the next two weeks. The Corporation is presently drilling the third well, Cox 1-13. It hopes to complete the drilling of this well and the fourth well in the initial program prior to year end.

CORPORATE

No shares or warrants were issued during the third quarter 2006, and there were 26.9 million shares and 6.9 million warrants outstanding at September 30, 2006. During the quarter, an average of 39,850 PetroGlobe common shares traded on the TSX Venture Exchange each day at prices ranging between $1.31 and $1.75 per share.

Holders of outstanding PetroGlobe warrants have begun to tender these warrants in the fourth quarter. As prescribed on the Warrant Certificates issued on November 30, 2005, the Exercise Price of $1.80 per common share expires on November 30, 2006. Effective December 1st, the Exercise Price for these warrants increases to $2.20 per share. Those holding Warrant Certificates issued on February 1, 2006 can convert warrants into common shares at an Exercise Price of $1.80 per share until February 1, 2007. Effective February 2, 2007, the Exercise Price increases to $2.20 per share.

SUMMARY

PetroGlobe is continuing with its drilling, tie-in and sustained production program in the Pembina area of Alberta. In Texas, the current focus is to complete the initial four well exploratory program in the Palo Duro Basin and to carry out extended tests associated with these wells.

Further information on PetroGlobe's operating and financial results can be obtained at SEDAR (www.sedar.com) and on PetroGlobe's website (www.petroglobe.com) where the financial statements and management's discussion and analysis for the nine months ended September 30, 2006 are available.

Certain information set forth in this press release contains forward looking statements. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, reliance should not be placed on forward-looking statements. PetroGlobe's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits PetroGlobe will derive therefrom. PetroGlobe disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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

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