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

Redcliffe Exploration Inc.

March 11, 2009 17:28 ET

Redcliffe Reports 2008 Year-End Reserves

CALGARY, ALBERTA--(Marketwire - March 11, 2009) -

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. as at December 31, 2008 (the "McDaniel Report"). These estimates were prepared in accordance with National Instrument 51-101: Standards of Disclosure of Oil and Gas Activities ("NI 51-101"). Additional information on the Company's reserves, as required by NI 51-101, will be filed on SEDAR (www.sedar.com) prior to April 30, 2009.

HIGHLIGHTS

- Redcliffe increased both Total Proved reserves and Proved plus Probable reserves by 32% over 2007 year-end estimates due to increased reserves in its core area of Gold Creek in the Peace River Arch area of Alberta;

- Total Proved plus Probable reserves increased to 4.094 million barrels of oil equivalent, comprised of approximately 41.5% crude oil and natural gas liquids and 58.5% natural gas;

- Increased Net Present Value (before tax discounted at 10%) of Proved plus Probable reserves to $76.3 million;

- Replaced 2008 production by 2.6 times on a Proved basis and 3.9 times on a Proved plus Probable basis;

- Redcliffe's reserve life index, based on the Company's exit rate of 1,332 boe/d - representing production from the last week of December 2008, was 4.6 years on a Proved basis and 8.4 years on a Proved plus Probable basis;

- Estimated 2008 finding and development costs, including changes to future development costs, were $19.84/boe on a Proved basis and $14.09/boe on a Proved plus Probable basis. Excluding changes to future development costs, 2008 finding and development costs were $20.35/boe on a Proved basis and $12.54/boe on a Proved plus Probable basis.

- Estimated 2008 finding, development and acquisition costs, including changes to future development costs, were $18.82/boe on a Proved basis and $14.78/boe on a Proved plus Probable basis. Excluding changes to future development costs, 2008 finding, development and acquisition costs were $19.37/boe on a Proved basis and $12.97/boe on a Proved plus Probable basis; and

- Achieved a recycle ratio of 1.7 on a Proved basis and 2.4 on Proved plus Probable basis.

RESERVES

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, 2008, as assessed in the McDaniel Report using their January 1, 2009 forecasted price and cost assumptions.



Summary of Reserves(1)
------------------------------------------------
Light/Medium Oil Natural Gas(4)
Gross(2) Net(3) Gross(2) Net(3)
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(Mbbl) (Mbbl) (MMcf) (MMcf)

Proved
Producing 349.2 258.4 5,858.5 4,131.3
Non-Producing 0.6 0.6 2,189.5 1,654.5
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Total Proved 349.8 259.0 8,047.9 5,785.8
Probable 300.9 219.8 6,332.1 4,567.2
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Total Proved
plus Probable 650.8 478.8 14,380.0 10,353.0
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Summary of Reserves(1)
------------------------------------------------
Natural Gas Liquids Total Oil Equivalent
Gross(2) Net(3) Gross(2) Net(3)
----------------------------------------------------------------------------
(Mbbl) (Mbbl) (Mboe) (Mboe)

Proved
Producing 398.3 233.9 1,724.0 1,180.8
Non-Producing 163.1 100.5 528.6 376.9
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Total Proved 561.4 334.4 2,252.6 1,557.8
Probable 485.1 289.8 1,841.4 1,270.8
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Total Proved
plus Probable 1,046.5 642.2 4,094.0 2,828.5
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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 REVENUES

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, 2008 as assessed in the McDaniel Report using their January 1, 2009 forecasted price and cost assumptions.



Net Present Value of Future Net Revenues
Before Income Taxes(1)(2)(3)(4)
----------------------------------------------------------------------------
(in $ thousands) 0% 5% 10% 15%

Proved
Producing 48,766.3 41,520.9 36,371.6 32,535.8
Non-Producing 15,775.2 11,725.2 9,400.7 7,927.3
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Total Proved 64,541.4 53,246.1 45,772.2 40,463.2
Probable 56,041.5 40,033.1 30,491.4 24,275.3
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Total Proved
plus Probable 120,583.0 93,279.1 76,263.7 64,738.5
----------------------------------------------------------------------------
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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 revenues may not represent fair
market value.
(4) The net present values of future net revenues do not take into account
the Alberta government's transitional royalties or the short-term
incentives announced on March 3, 2009.


PRICE FORECASTS

The following table summarizes price forecasts used to determine future revenues from the Company's reserves.



Edmonton Alberta AECO
WTI Light Spot Price Exchange
Year Crude Oil Crude Oil Natural Gas Inflation Rate
----------------------------------------------------------------------------
($US/bbl) ($Cdn/bbl) ($Cdn/MMBtu) (%/year) ($US/$Cdn)

2009 60.00 69.60 7.40 2.0 0.85
2010 71.40 83.00 8.00 2.0 0.85
2011 83.20 91.40 8.45 2.0 0.90
2012 90.20 93.90 8.80 2.0 0.95
2013 97.40 96.30 9.05 2.0 1.00
2014 99.40 98.30 9.25 2.0 1.00
2015 101.40 100.30 9.45 2.0 1.00
2016 103.40 102.30 9.60 2.0 1.00
2017 105.40 104.20 9.80 2.0 1.00
2018 107.60 106.40 10.00 2.0 1.00
2019 109.70 108.50 10.20 2.0 1.00
2020 111.90 110.70 10.40 2.0 1.00
2021 114.10 112.80 10.60 2.0 1.00
2022 116.40 115.10 10.80 2.0 1.00
2023 118.80 117.50 11.05 2.0 1.00
Thereafter +2%/year +2%/year +2%/year 2.0 1.00

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FINDING AND DEVELOPMENT COSTS

The Company's finding and development costs as well as finding, development and acquisition costs for each of the three fiscal periods ended December 31, 2008 are detailed in the table below.



Total / Three-
2008(1) 2007 2006(2) Year Average
----------------------------------------------------------------------------

Finding & Development Costs ("F&D")

Capital expenditures ($ millions)(3) 19.5 15.2 5.5 40.1
Change in Future Development
Capital ("FDC") ($ millions):
Proved (0.5) 0.8 0.5 0.8
Proved plus Probable 2.4 4.3 1.0 7.7

Proved reserves added (Mboe) 956.7 677.2 137.2 1,771.1
Proved plus Probable reserves
added (Mboe) 1,552.7 1,271.8 237.9 3,062.4

Proved F&D costs ($/boe):
Including FDC 19.84 23.63 43.54 23.12
Excluding FDC 20.35 22.40 39.87 22.65

Proved plus Probable F&D costs ($/boe):
Including FDC 14.09 15.28 27.28 15.61
Excluding FDC 12.54 11.93 22.99 13.10

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Total / Three-
2008(1) 2007 2006(2) Year Average
----------------------------------------------------------------------------

Finding, Development & Acquisition
Costs ("FD&A")

Capital expenditures ($ millions) 17.3 45.1 5.5 67.9
Change in Future Development
Capital ("FDC") ($ millions):
Proved (0.5) 0.8 0.5 0.8
Proved plus Probable 2.4 4.3 1.0 7.7

Proved reserves added (Mboe)(4) 894.3 1,724.2 137.2 2,755.7
Proved plus Probable reserves
added (Mboe)(4) 1,335.4 3,023.8 237.9 4,597.1

Proved FD&A costs ($/boe):
Including FDC 18.82 26.67 43.54 24.96
Excluding FDC 19.37 26.18 39.87 24.65

Proved plus Probable F&D costs ($/boe):
Including FDC 14.78 16.34 27.28 16.45
Excluding FDC 12.97 14.93 22.99 14.78

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(1) Certain information in the foregoing calculations includes information
based on estimated unaudited financial results that may change on
completion of the audited financial statements for the year ended
December 31, 2008.
(2) For the period from May 4, 2006 (date of incorporation) to December 31,
2006.
(3) Capital expenditures for the F&D calculation for the year ended
December 31, 2008 were adjusted lower by $4.2 million as this relates
to land purchases and their immediate disposition to a land fund;
management believes including such amounts in F&D capital expenditures
does not provide an accurate indication of actual F&D costs for 2008.
Reversing this adjustment would have resulted in F&D costs of $24.18
(including FDC)/boe (Proved), $24.70 (excluding FDC)/boe (Proved),
$16.77 (including FDC)/boe (Proved plus Probable), and $15.22
(excluding FDC)/boe (Proved plus Probable). FD&A costs are unaffected
by such adjustment.
(4) For the year ended December 31, 2008, the Company had net dispositions
of reserves for purposes of the FD&A calculation.


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 their independent report, to review major property assessments, and to discuss any areas of risk. The evaluation in the McDaniel Report of the 2008 year-end reserves of Redcliffe was reviewed by the Reserves Committee on March 3, 2009, and approved by the Company's Board of Directors on March 11, 2009.

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. The Company's current production is approximately 1,350 - 1,400 boe/d (approximately 70% natural gas).

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