Redcliffe Exploration Inc.

Redcliffe Exploration Inc.

April 10, 2007 09:30 ET

Redcliffe Exploration Inc. ("Redcliffe") Provides Year-End Reserve Summary for Its Wholly-Owned Subsidiary, Redcliffe Exploration Ltd. ("REX")

CALGARY, ALBERTA--(CCNMatthews - April 10, 2007) -


Redcliffe Exploration Inc. ("Redcliffe" or the "Company") (TSX VENTURE:RXI.A)(TSX VENTURE:RXI.B)was formed as the result of a business combination, which closed on February 27, 2007, between Redcliffe Exploration Ltd. ("REX") and Stallion Energy Ltd. ("Stallion"), a private company. Under the business combination, REX became a wholly-owned subsidiary of Stallion, which was renamed Redcliffe Exploration Inc. For reporting purposes, the transaction was treated as a reverse takeover by REX of Stallion and, consequently, REX is considered the predecessor entity.

This report provides the 2006 year-end reserves summary for REX only, based upon operations commencing on May 4, 2006, the date REX was incorporated. It does not include Stallion year-end reserves since the business combination with Stallion did not close until 2007. Redcliffe will report separate reserve information for the pro-forma combination of Stallion and REX in a separate release.

2006 year-end reserves summary

Redcliffe hereby provides a summary of the REX reserves evaluation as of December 31, 2006, as prepared by McDaniel & Associates Consultants Ltd. ("McDaniel"), the Company's independent reserves evaluator. This reserves evaluation follows the first partial year of operations for REX, which was incorporated on May 4, 2006. Redcliffe anticipates releasing the audited financial statements of REX for the period ended December 31, 2006 later this month.

In this news release, the Company's interest before royalties is the working interest reserves plus royalty interest reserves before deductions of royalty burdens. These reserve estimates and forecast of future cash flows have been prepared in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities in Canada.

Reserves and production are stated in barrels of oil equivalent (boe) derived by converting gas to an oil equivalency in the ratio of six thousand cubic feet of gas to one barrel of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet to one barrel (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.

Highlights of the reserve report:

- Since REX commenced trading on the TSX Venture Exchange in September 2006, REX added 237,600 boe's on a proved plus probable basis. All reserve additions resulted from exploration drilling with proved reserves accounting for 58 percent of the total reserves.

- The proved plus probable reserve additions for 2006 consist of 62 percent natural gas and 38 percent light and medium crude oil and natural gas liquids.

Summary of oil and natural gas reserves - company interest before tax and royalty

The McDaniel reserve report contains a high proportion of proved non-producing and probable reserves due to 2006 being the first partial year of operations for REX with new wells having no production history. Over time management expects the relative proportion of proved producing reserves to increase.


Light & Medium Natural Gas Natural Gas
Reserve category Crude (Mbbls) (Mmcf) Liquids (Mbbls) Total (Mboe)

Proved Producing 9.6 0.6 2.20
Proved Dev.
Non-Producing 35.3 495.3 16.9 134.8
Total Proved 35.3 504.9 17.5 136.9
Total Probable 22.9 382.2 14.1 100.7
Total Proved
+ Probable 58.2 887.1 31.6 237.6

Net present value of reserves

Below is a table showing REX's net present value of future net revenue attributable to reserves using McDaniel forecast prices as at January 1, 2007 and costs. The estimated future net revenues are presented before deducting future estimated site restoration costs, and are reduced for estimated future abandonment costs and future capital costs associated with non-producing, undeveloped and probable additional reserves. Estimated values disclosed do not necessarily represent fair market value.

(in thousands of dollars)

Discounted at: Undiscounted 5% 10% 15%

Total Proved 3,719 3,374 3,088 2,848
Total Probable 2,812 2,239 1,826 1,516
Total Proved
+ Probable 6,530 5,613 4,913 4,364

Redcliffe 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. The Company's strategy is to build shareholder value through internally generated exploration and development drilling, and through selective acquisitions. Redcliffe'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 therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could effect the Corporation's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website ( 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)