SignalEnergy Inc.

November 15, 2006 23:59 ET

SignalEnergy Inc. Acquires a Private Oil and Gas Company

CALGARY--(CCNMatthews - Nov. 15) -


SignalEnergy Inc. ("Signal" or the "Corporation") (TSX:SGI) has closed the previously announced acquisition of a private company ("PrivateCo").

PrivateCo has 2.9 million boe's of proven and 3.3 million boe's of proven and probable reserves as determined by Sproule Associates Ltd. in an evaluation completed as at May 31, 2006. The consideration for the acquisition of PrivateCo was $15.0 million cash, 16.3 million common shares of Signal and the assumption of $8.2 million of indebtedness, net of working capital. The current production from the assets acquired is 550 boe/d with approximately 200 boe/d that is behind pipe. In addition, PrivateCo holds 14,000 net acres of undeveloped land with an average working interest of 54% and options to earn an additional 52,800 gross acres of undeveloped lands. The PrivateCo lands are all located in the Ladyfern area straddling the boarders of Alberta and British Columbia where there are an estimated 60 infill drilling locations with immediate access to production facilities.

Signal will have production of 850 boe/d and 3.6 million boe's of proven and 5.4 million boe's of proven and probable reserves consisting of natural gas and natural gas liquids based on independent engineering evaluations. An additional 200 boe/d of production that is behind pipe is expected to be on stream prior to year-end subject to the outcome of regulatory hearings. In addition, Signal will have 23,000 net acres of undeveloped land and the right to earn up to an additional 52,800 acres of undeveloped land.

Signal's 2007 capital budget for the combined company is estimated to be $15 million which will fund the drilling of 10 infill development wells and 5 exploration wells in the Ladyfern area, all expected to be drilled by the end of the first quarter of 2007.

BOE Presentation

Natural gas reserves and volumes recorded in thousand cubic feet are converted to barrels of oil equivalent ("boe") on the basis of six thousand cubic feet ("mcf") of gas to one barrel ("bbl") of oil. The term "barrels of oil equivalent" may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf to 1 bbl is based on an energy equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalent at the wellhead.

Caution to Reader

This news release contains forward-looking statements and the reader is cautioned not to place undue reliance on these statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. This specifically includes whether the acquisition will close or that the Arrangement will be approved or implemented. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur.

This news release is not for dissemination in the United States or to any United States news services. The common shares of Signal have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

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