Redcliffe Exploration Inc.
TSX VENTURE : RXP.A
TSX VENTURE : RXP.B

Redcliffe Exploration Inc.

April 29, 2008 16:59 ET

Redcliffe Announces 2007 Financial Results and Files NI 51-101 Disclosures

CALGARY, ALBERTA--(Marketwire - April 29, 2008) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. PERSONS.

Redcliffe Exploration Inc. (TSX VENTURE:RXP.A) (TSX VENTURE:RXP.B) ("Redcliffe" or the "Company") is pleased to announce that it has filed its audited financial statements and related Management's Discussion and Analysis as of and for the year ended December 31, 2007 with Canadian securities regulatory authorities. The Company has also filed its reserves data and other oil and gas information as of and for the year ended December 31, 2007, as required under National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities. These filings are available for review at www.sedar.com.

2007 Highlights:

- Drilled and re-completed a total of 23 wells (11.22 net), resulting in several major discoveries in the Company's core areas at Wapiti and Gold Creek. Most significantly, Wapiti 7-3 (72% WI) was a major light oil discovery that tested at a gross stabilized rate of approximately 750 bbl/d (48 degree API) and 2,600 mcf/d of gas during a restricted flow period, due to the sour nature of the well.

- Increased production from nil to an average of 434 boe/d (78% natural gas) for 2007, with a 2007 exit rate of 780 boe/d. As a result of recent tie-in activity, Redcliffe's current production is approximately 1,100 boe/d, with approximately 400 boe/d of additional production capability awaiting processing facility modification and the initiation of production from the Company's 7-3 Wapiti oil discovery, which is included in the above production capability only at its allowable rate. The Company will apply for Good Production Practice on 7-3 which, once received, is expected to significantly increase production from this well.

- Increased proved reserves approximately 1,150% to 1,702.7 mboe and proved plus probable reserves approximately 1,200% to 3,103.0 mboe. The Company's reserve life index also increased substantially to 6 years on proved reserves and 11 years on proved plus probable reserves, using 2007 exit production.

- Achieved finding and development costs of $22.41/boe on a proved basis and $11.94/boe on a proved plus probable basis. Including future capital, such costs were $23.64/boe and $15.28/boe, respectively. For finding, development and acquisition costs, the Company achieved $26.09/boe on a proved basis and $14.88/boe on a proved plus probable basis. Including future capital, such costs were $26.57/boe and $16.29/boe, respectively.

- Completed two business combinations during 2007: Stallion Energy Ltd. in February and Redcliffe Energy Ltd. in December, adding production, reserves, complementary land and significant tax pools. The Company's estimated tax pools at December 31, 2007 were approximately $90 million.

- Increased land base from 14,245 acres (4,309 net acres) to 60,866 acres (38,892 net acres) in 2007, an increase of approximately 330% (approximately 800% net).



Operational & Financial Summary:

Three months ended Year ended
($ thousands, except as noted) December 31, 2007 December 31, 2007
----------------------------------------------------------------------------

Average daily production
Crude oil and natural gas
liquids (bbl/d) 152 97
Natural gas (mcf/d) 2,818 2,021
Oil equivalent (boe/d) 622 434
Exit rate (boe/d) 780 780
Average realized prices
Crude oil and natural gas
liquids ($/bbl) 59.01 51.94
Natural gas ($/mcf) 6.44 6.67
Oil equivalent ($/boe) 43.62 42.71
Petroleum and natural gas sales 2,495 6,795
Funds from operations (1) 829 1,867
Per basic and diluted share ($/share) 0.02 0.05
Net loss and other comprehensive loss 660 462
Per basic and diluted share ($/share) 0.01 0.01
Net debt 13,395 13,395
Total assets 56,922 56,922
Capital expenditures 6,129 17,363
Share structure (thousands)
Class A shares, end of period 54,406 54,406
Class B shares, end of period 1,494 1,494
Options and warrants, end of period 11,653 11,653
Weighted-average Class A shares (thousands)
Basic 49,103 38,747
Diluted 49,103 38,941
----------------------------------------------------------------------------
(1) Funds from operations is calculated as cash provided by (used in)
operating activities and adding changes in non-cash working capital.
Funds from operations does not have a standardized measure prescribed
by GAAP and therefore may not be comparable with calculations of
similar measures for other companies.


Outlook:

In its first full year of operations, Redcliffe has established itself as an emerging junior with a reserve base of over 3.1 million barrels of oil equivalent and a production potential from existing wells of over 1,500 boe/d. Our growth prospects are significant, particularly in the further development of the existing Peace River Arch properties and our exploration portfolio. We intend to invest an additional $17.5 million in 2008 developing existing production potential, expanding key operational properties and developing high impact plays for drilling in 2009.

Based upon current production levels and anticipated increases throughout the year, Redcliffe estimates debt-adjusted cash flows of approximately $10-11 million in 2008. Recent indications point towards much stronger natural gas prices in 2008 than was the case last year. We have a strong tax pool base of over $90 million to shelter this cash flow, and we have established a foothold into European equity markets that will enhance our current capital sources in North America.

Redcliffe has announced a capital budget of $17.5 million for 2008, involving the drilling of 11-16 gross wells, most of which will be drilled in the Peace River Arch. This drilling program will focus on development of existing discoveries as a primary objective. We will, however, actively pursue the development of new exploratory prospects outside Alberta. British Columbia is a natural extension of the Peace River Arch activity and preliminary work has been initiated. We will also explore acquisition opportunities that open new core areas for exploration.

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 affect 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 (www.sedar.com). 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)
    Email: dconnolly@redcliffe.ca
    or
    Redcliffe Exploration Inc.
    George Gramatke
    Vice President, Finance & CFO
    (403) 539-8442
    (403) 539-8433 (FAX)
    Email: ggramatke@redcliffe.ca