Redcliffe Exploration Inc.

Redcliffe Exploration Inc.

November 12, 2008 18:33 ET

Redcliffe Provides Operational Update and Extends Warrant Exercise Period

CALGARY, ALBERTA--(Marketwire - Nov. 12, 2008) -


Redcliffe Exploration Inc. (TSX VENTURE:RXP.A) (TSX VENTURE:RXP.B) ("Redcliffe" or the "Company") is pleased to provide the following update of activity. Due to competitive issues, much of this update on 2008 drilling results has been delayed in its release to the market.

Redcliffe is currently producing approximately 1,200 boe/d, consisting of 435 bbl/d of oil and natural gas liquids and 4,600 mcf/d of natural gas. Approximately 63% of this production is from the Company's Gold Creek area in the Peace River Arch, south of Grande Prairie, while the remainder is centered in the Pembina area of west central Alberta. Ongoing gas well tie-in operations from two recently completed wells in the Gold Creek area is anticipated to add up to a further 300 boe/d of natural gas and associated liquids in December 2008. In addition, Redcliffe estimates it has approximately 250 boe/d of natural gas, associated liquids and oil that is tied-in to pipelines but unable to produce due to facility limitations in the Gold Creek area. Redcliffe is continuing to work with its partners to obtain alternative solutions to bringing this constrained production on-stream.

During 2008 to date, Redcliffe has participated in the drilling of 5 (3.53 net) wells resulting in 1 (1.0 net) oil well and 4 (2.53 net) gas wells. Two (1.0 net) gas wells were drilled in the Gold Creek area; each has now been tested and tie-in operations are in progress, with production expected to commence in December 2008. Based upon the test results, Redcliffe anticipates initial rates from these two wells to exceed 4,000 mcf/d gross plus associated liquids. In the Valhalla area, the Company drilled 1 (0.53 net) gas well, which tested commercial gas. In the Pembina area, Redcliffe drilled 2 (2.0 net) wells resulting in an oil discovery and a potential gas well. The oil well has been on production since August 2008 and continues to produce at approximately 65 bbl/d. Three development wells have been identified, the first of which may be drilled prior to year-end.

Over the last few months Redcliffe has focused on increasing its acreage position in the very competitive Peace River Arch centered in the Gold Creek/Wapiti areas. This has been facilitated by the US$6.0 million Land Fund raised independently in August of this year. As a result, the Company now controls approximately 161 (83 net) sections or approximately 103,000 (53,000 net) acres of undeveloped land, which includes the Company's share of unearned lands held through the Land Fund (14,200 net acres). Redcliffe plans to remain active in acquiring lands in the area with multi-target liquid-rich gas reserves.

Assisted by the recently announced closing of a $5.0 million flow-through financing, Redcliffe intends to remain active on the drilling front over the next 5 months. We currently anticipate participating in the drilling of 4-5 wells in Pembina/Medicine River and 3-6 wells in the general Gold Creek area. Although Redcliffe's 2009 budget has not been finalized, the Company maintains a substantial drilling inventory in both the Peace River Ach and Pembina areas.

Like most junior oil and gas companies in Alberta, Redcliffe is exploring all avenues to increase cash flows against the backdrop of uncertain energy pricing and the new Alberta royalty increases scheduled to commence in 2009. In part, because of the Alberta New Royalty Framework and the incentives for deeper and horizontal drilling, Redcliffe will increase its exposure to the deeper targets and to the development of a "resource" style gas project in 2009. Redcliffe will also focus its attention towards corporate acquisitions in 2009 as a way to acquire assets in the current lower commodity price cycle and increase cash flows from which its exploration program may be expanded.

Redcliffe also announces the extension of the exercise period of the warrants previously issued on November 27, 2007 and December 6, 2007, which were set to expire 12 months from their date of issuance. Subject to regulatory approval, Redcliffe will extend the term of all 6,041,352 unexercised warrants outstanding with an exercise price of $0.55 until March 31, 2009.

Reader Advisories

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 ( 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)