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

Redcliffe Exploration Inc.

February 28, 2008 09:30 ET

Redcliffe Reports 2007 Year-End Reserves

CALGARY, ALBERTA--(Marketwire - Feb. 28, 2008) -

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

Redcliffe Exploration Inc. ("Redcliffe" or the "Company") (TSX VENTURE:RXP.A)(TSX VENTURE:RXP.B) is pleased to provide the following summary information from its annual independent reserve evaluation completed by McDaniel & Associates Consultants Ltd. ("MCD"), as at December 31, 2007 ("MCD Report"). These estimates were prepared in accordance with National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities (NI 51-101).

The highlights of the reserves (based on forecast prices and costs) are as follows:

- Total proved plus probable reserves increased to 3.103 million barrels of oil equivalent; approximately 38% crude oil and natural gas liquids and 62% natural gas;

- Replaced 2007 production by 9.3 times on proven reserve basis and 17.1 times on proven plus probable basis;

- Increased net present value (before tax discounted at 10%) to $61,900,000 for total proved and probable reserves;

- Redcliffe increased its reserves 1306% over 2006 year-end estimates due to significantly increased reserves in its core areas at Pembina, Gold Creek, and Medicine River, and added significant reserves from recent drilling successes in Wapiti;

- Reserves life index increased to 6.0 years on a proven basis and 11.0 years on a proven plus probable basis; and

- On an estimated basis pending final year-end financial audit, Redcliffe achieved finding and development costs of approximately $24.00 per barrel of oil equivalent on a proven basis and approximately $13.90 on a proven plus probable basis. Finding, development and acquisition costs were approximately $25.38 and approximately $14.98 per barrel of oil equivalent on a proven and proven plus probable basis, respectively.

Reserves Summary 2007 Using MCD January 1, 2008 Forecast Prices and Costs

The following table summarizes the Company's gross (working interest before royalties) and net (working interest after royalties) interests in proved and probable reserves at December 31, 2007 as assessed in the MCD Report using their January 1, 2008 forecasted price and cost assumptions.



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Summary of Reserves(1)
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Total Oil
Light/Medium Natural Gas Natural Gas Equivalent
Reserves Category Oil (Mbbl) (MMcf)(4) Liquids (Mbbl) (Mboe)(5)
---------------------------------------------------------
Gross Net Gross Net Gross Net Gross Net
(2) (3) (2) (3) (2) (3) (2) (3)
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Proved
Producing 150 143 3,886 2,972 177 114 974 752
Developed 129 103 2,516 1,856 180 122 729 535
Non-Producing
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Total Proved 279 246 6,403 4,828 357 236 1,703 1,287
Probable 240 198 5,100 3,871 310 208 1,400 1,052
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Total Proved
Plus Probable 519 445 11,502 8,699 668 444 3,103 2,339
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(1) Numbers in this table are subject to rounding error.

(2) "Gross" means Redcliffe's total working interest reserves before royalties owned by others and without including any royalty interest owned by Redcliffe.

(3) "Net" means Redcliffe's total working interest reserves and/or royalty interest share after deducting the amounts attributable to royalties owned by others.

(4) Natural gas volumes include solution gas volumes associated with Redcliffe's light and medium crude oil reserves.

(5) Natural gas is converted to barrels of oil equivalent ("boe") at a ratio of six thousand standard cubic feet to one barrel of oil.

Net Present Value of Future Net Revenue Before Income Taxes Using MCD January 1, 2008 Forecast Prices and Costs

The following table summarizes Redcliffe's share of the net present value of its reserves prior to provision for income taxes, interest and general and administrative expenses at December 31, 2007 as assessed in the MCD Report using their January 1, 2008 forecasted price and cost assumptions.



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Net Present Discounted Value of Future Net Revenue(1)(2)(3)
Before Income Taxes
($000)
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Reserves Category 0% 5% 10% 15%
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Proved
Producing 24,280.0 21,556.5 19,507.6 17,912.1
Non-Producing 21,606.6 19,501.7 17,794.9 16,384.3

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Total Proved 45,886.5 41,058.1 37,302.5 34,296.4
Probable 38,706.8 30,302.0 24,567.0 20,462.4
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Total Proved
Plus Probable 84,593.2 71,360.1 61,869.5 54,758.8

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(1) Numbers in this table are subject to rounding error.

(2) Values are net of abandonment liabilities.

(3) The net present values of future net revenue do not represent fair market value.

Summary of Pricing and Inflation Rate Assumptions as of January 1, 2008 Forecast Prices and Costs



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Natural Gas
Year WTI Cushing Edmonton Par AECO Spot Inflation Exchange
Oklahoma Price 40 degree Gas Price Rates Rate
($US/bbl) API ($Cdn/bbl) ($Cdn/GJ) %/Year ($US/$Cdn)

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2008 90.00 89.00 6.45 2.0 1.00
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2009 86.70 85.70 7.00 2.0 1.00
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2010 83.20 82.20 7.00 2.0 1.00
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2011 79.60 78.50 7.00 2.0 1.00
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2012 78.50 77.40 7.10 2.0 1.00
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2013 77.30 76.20 7.30 2.0 1.00
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2014 78.80 77.70 7.55 2.0 1.00
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2015 80.40 79.30 7.80 2.0 1.00
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2016 82.00 80.80 8.00 2.0 1.00
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2017 83.70 82.50 8.25 2.0 1.00
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2018 85.30 84.10 8.45 2.0 1.00
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2019 87.00 85.80 8.70 2.0 1.00
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2020 88.80 87.50 8.95 2.0 1.00
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2021 90.60 89.30 9.20 2.0 1.00
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2022 92.40 91.10 9.40 2.0 1.00
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Reserves Committee of Redcliffe

Redcliffe has a Reserves Committee comprised of independent board members that reviews the qualifications and appointment of the independent reserve evaluators. The Reserves Committee also reviews the process for providing information to the evaluators and meets with the independent evaluators to discuss the procedures used in the independent report, to review major property assessments and to discuss any areas of risk. The evaluation in the MCD Report of the 2007 year-end reserves of Redcliffe was reviewed by the Reserves Committee and approved by the Company's Board of Directors on February 26, 2008.

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. Redcliffe'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 Peace River Arch and Pembina 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 (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