Redcliffe Exploration Inc.

Redcliffe Exploration Inc.

April 24, 2007 18:03 ET

Redcliffe Announces 2006 Financial Results

CALGARY, ALBERTA--(CCNMatthews - April 24, 2007) -


Redcliffe Exploration Ltd. (TSX VENTURE:RXI.A) (TSX VENTURE:RXI.B) ("Redcliffe" or the "Company") is pleased to announce its financial results as of December 31, 2006 and for the period from May 4, 2006 (date of incorporation) to December 31, 2006. Redcliffe has filed its audited financial statements for the period from May 4, 2006 (date of incorporation) to December 31, 2006, and the accompanying Management's Discussion and Analysis with Canadian securities regulatory authorities. These filings are available for review at

2006 Highlights:

- Established a new junior oil and gas exploration company and successfully raised $13,600,000 in equity capital.

- The Company commenced trading on the TSX Venture exchange in September 2006.

- The Company commenced drilling activities in October 2006 with participation in the drilling of 13 (3.44 net) wells and 2 (0.54 net) re-entries, which resulted in the casing or successful re-completion of 11 (2.74 net) gas wells, 2 (0.60 net) oil wells, and 1 (0.24 net) dry hole. The Company also elected not to participate in the casing of one 1 (0.40 net) well.

- The Company entered into an amalgamation agreement with Stallion Energy Ltd. ("Stallion"), a private junior oil and gas company, on November 20, 2006, thereby creating a combined company, Redcliffe Exploration Inc. ("RXI"), with a strengthened asset base, expanded drilling opportunities, significant tax pools and financial strength. The business combination closed on February 27, 2007 and was treated as a reverse takeover by the Company of Stallion for reporting purposes.

- The Company commenced commercial production in late December 2006; as of the date of this news release, RXI is producing 500 boepd with approximately 400 boepd of behind pipe production awaiting tie in.

- The Company found its first oil and gas reserves which, according to a year-end evaluation prepared by McDaniel & Associates Consultants Ltd. ("McDaniel") in accordance with NI 51-101, totaled 136,900 boe on a total proved basis and 237,600 boe on a total proved plus probable basis at December 31, 2006 using McDaniel's forecast price and cost assumptions. On a pro forma basis, assuming the business combination between the Company and Stallion had occurred at December 31, 2006 rather than the effective date of the business combination, combined RXI reserves, as evaluated by McDaniels in accordance with NI 51-101, totaled 622,800 boe on a total proved basis and 1,055,800 boe on a total proved plus probable basis at December 31, 2006 using McDaniel's forecast price and cost assumptions.

- The Company increased its land holdings to 4,309 net acres of undeveloped land in Alberta at December 31, 2006. On a pro forma basis, assuming the business combination between the Company and Stallion had occurred at December 31, 2006 rather than the effective date of the business combination, combined RXI land holdings at December 31, 2006 were 10,249 net acres, all in Alberta.

Financial Summary:

(in dollars)

Revenues 180,533
Net loss 231,564
Net loss per basic and diluted Class A share 0.02
Working capital 6,361,875
Total assets 16,509,652
Capital expenditures 5,604,489



RXI is proposing to undertake an active drilling program focused on natural gas during 2007. The capital budget has been established at $20 million, of which over 70% will be allocated to the drilling and completion of 25 wells, including three wells drilled in the first quarter. This activity will be split approximately 67% in the Pembina project area and 33% in the Peace River Arch. Funding for this program will be provided by a combination of cash flow, available bank lines and public or private equity financings. As such the ultimate extent of the program will be subject to market conditions that include oil and gas pricing as well as the availability of equity and flow through funding.

RXI is a Calgary, Alberta based company engaged in the exploration for, and development and production of conventional crude oil and natural gas reserves in western Canada. RXI's strategy is to build shareholder value through internally generated exploration and development drilling, and through selective acquisitions. RXI's areas of operational focus include the Pembina and Peace River Arch areas of Alberta.

Forward-Looking Statements: This news release contains certain forward-looking statements, including management's assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, 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 foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances 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, including the amount of proceeds, that the Company will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could effect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website ( All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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

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

Contact Information

  • Redcliffe Exploration Inc.
    Daryl H. Connolly
    President & CEO
    (403) 539-8440
    (403) 539-8433 (FAX)
    Redcliffe Exploration Inc.
    George Gramatke
    Vice President, Finance & CFO
    (403) 539-8442
    (403) 539-8433 (FAX)