Pilot Energy Ltd.
TSX VENTURE : PGY

Pilot Energy Ltd.

May 30, 2006 17:00 ET

Pilot Energy Announces Its 2006 First Quarter Results

CALGARY, ALBERTA--(CCNMatthews - May 30, 2006) - Pilot Energy Ltd. ("Pilot") (TSX VENTURE:PGY) is pleased to announce its financial and operating results for the three months ended March 31, 2006.



Highlights

------------------------------------------------------------------------
Three Months
Ended March 31
--------------------------------
2006 2005 % Change
------------------------------------------------------------------------

FINANCE
($ thousands, except per share amounts)

Revenue 3,791 2,204 72

Funds from operations (1) 1,471 1,071 37
Per share - basic 0.07 0.07 12
Per share - diluted 0.07 0.07 12

Net income 192 230 (16)
Per share - basic 0.01 0.01 (31)
Per share - diluted 0.01 0.01 (31)

Capital expenditures 1,890 5,114 (63)

Debt (including working capital) 10,234 4,983 105

Shares outstanding (000's) 19,736 17,890 10

Weighted average shares outstanding (000's)
basic 19,643 16,017 23
diluted 19,874 16,286 22

OPERATIONS

Daily production
Oil and ngl's (bbl/d) 767.3 467.7 64
Natural gas (mcf/d) 367.9 334.1 10
Total oil equivalent (boe/d @ 6:1) 828.6 523.3 58

------------------------------------------------------------------------

Note:

(1) Funds from operations is calculated as cash provided by operating
activities from the statement of cash flows, adding change in
non-cash working capital and asset retirement expenditures. Funds
from operations is used to analyze the Company's operating
performance and leverage. Funds from operations does not have a
standardized measure prescribed by Canadian Generally Accepted
Accounting Principles and therefore may not be comparable with the
calculations of similar measures for other companies.


The first quarter results mark the sixth consecutive quarter of continuous profitable growth for Pilot since its creation in April of 2004.

Highlights from the quarter include a 58 percent growth in year over year production, marginally offset by a 10 percent increase in shares outstanding.

The majority of operations in the first quarter were on Pilot's Alberta properties. In our Chauvin area the Company closed an acquisition of 45 boe per day. Management believes the Company can increase the value of the acquisition by adding a water disposal well to the property and through operational efficiencies with an increased presence in the area.

Pilot recompleted a 100 percent working interest oil well in the Halkirk area which is currently producing 45 boe per day of light oil.

In the Faust area of Alberta, Pilot completed and tied in a gas well which is currently producing 90 Mcf per day, net to Pilot. The Company also drilled a shallow gas well in Leduc that is currently waiting on completion.

Pilot's southeastern Saskatchewan activity was slower than anticipated in the quarter due to the lack of availability of drilling rigs. We have since secured access to drilling services in Saskatchewan and are currently drilling a deep test in our Huntoon area. We expect to have a second rig working in June.

With a strong production base in excess of 800 boe per day and the largest prospect inventory in the Company's history, Pilot is well positioned to grow through the remainder of 2006 and into 2007.

Reader Advisory

Barrels of oil equivalent ("boe") amounts mentioned herein have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. This conversion conforms to National Instrument 51-101 - Standards for Oil and Gas Activities of the Canadian Securities Administrators (NI 51-101). The term "boe" may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead

Certain statements in this press release are forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by Pilot at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors, many of which are beyond the control of Pilot. There is no representation by Pilot that actual results achieved during the forecast period will be the same, in whole or in part, as forecast.

Pilot's disclosure documents can be viewed under the Company's SEDAR profile at www.sedar.com or copies can be obtained by e-mailing the Company at info@pilot-energy.com.

Issued and Outstanding Common Shares: 19,736,362

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

Contact Information

  • Pilot Energy Ltd.
    Todd Lemieux
    President
    (403) 514-8115 ext. 226
    or
    Pilot Energy Ltd.
    Douglas Smith
    Chief Financial Officer
    (403) 514-8115 ext. 232