Solara Exploration Ltd.
TSX VENTURE : SAA.A
TSX VENTURE : SAA.B

Solara Exploration Ltd.

May 01, 2008 16:05 ET

Solara Exploration Announces 2007 Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - May 1, 2008) - Solara Exploration Ltd. (TSX VENTURE:SAA.A) (TSX VENTURE:SAA.B) ("Solara" or the "Company") announces its financial and operating results for the year ended December 31, 2007. The audited financial statements and Management's Discussion and Analysis were filed yesterday on SEDAR at www.sedar.com. Solara also announces its reserves for the fiscal year ended December 31, 2007. In accordance with National Instrument 51-101-Standards for Disclosure of Oil and Gas Activities ("NI 51-101"), GLJ Petroleum Consultants have independently prepared the Solara GLJ Report (the "GLJ Report") which evaluated all of the Company's oil, natural gas and liquids reserves as at December 31, 2007. The summary of the GLJ Report is also available for public viewing on SEDAR at www.sedar.com. The following is an overview of the Company's fiscal year.

Overview

- Generated gross oil and gas revenues of $5,507,544

- Cash flow for the year was $2,029,158 or $0.08 per basic Class A Share

- Recorded an after-tax loss of $5,598,414 due to a ceiling test write down on certain non performing oil and gas assets at year end

- Realized a future tax reduction of $3,285,067

For the fiscal year, gross oil and gas revenues were $5,507,544 for 2007 compared to $2,149,560 in 2006 representing a 156% increase. Cash flow from operations increased from $175,959 in 2006 to $2,029,158 for an increase of 1,053%. Cash flow per basic Class A Share was $0.08 per share compared to $0.01 per share in 2006. Total capital expenditures for the year were $8,066,416 million comprised mainly of drilling, completion, geophysical and tie-in activities. A ceiling test impairment of $6,866,081 was recorded at year end 2007 primarily due to reserve adjustments by the Company's independent engineering evaluators with respect to several wells which did not perform in accordance with prior independent projections when placed on production in the late third quarter, and fourth quarter of 2007. The reserve revisions at year end 2007 reduced the prior period proved non-producing plus probable valuations for the wells by approximately $4.1 million. As well, part of the impairment resulted from lower pricing forecasts for natural gas at December 31, 2007 compared to the prior year, which had an estimated negative impact of $1.4 million on the reserve valuation at year end. As a result of the foregoing, Solara realized a future tax reduction of $3,285,067 at year end 2007.

About Solara Exploration

Solara Exploration is a publicly traded junior oil and gas company focused on the exploration, development and acquisition of oil and natural gas in western Canada.

READER ADVISORY


This news release may contain 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. 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.

BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio 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.

25,259,692 Class A Shares

1,026,800 Class B Shares

The TSXV has neither approved nor disapproved the contents of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Solara Exploration Ltd.
    Donald R. Holding
    President and Chief Executive Officer
    (403) 537-0458
    (403) 537-0462 (FAX)
    Email: don_solaraexploration@shaw.ca
    or
    Solara Exploration Ltd.
    1800, 444 - 5th Avenue S.W.
    Calgary, Alberta, Canada T2P 2T8