Solara Exploration Ltd.
TSX VENTURE : SAA.A

Solara Exploration Ltd.

June 30, 2011 13:43 ET

Solara Releases First Quarter Results and Provides Corporate Update

CALGARY, ALBERTA--(Marketwire - June 30, 2011) - Solara Exploration Ltd. (TSX VENTURE:SAA.A) ("Solara" or the "Company") announces the release of its financial report and Management Discussion and Analysis ("MD&A") for the three months ended March 31, 2011. The financial report and related MD&A for the three months ended March 31, 2011 have been filed with Canadian securities regulatory authorities on SEDAR at www.sedar.com. The Company advises shareholders and investors that the consolidated financial report and MD&A are now being presented in accordance with the new International Financial Reporting Standards ("IFRS"), with a restatement of comparative results achieved in Q1 2010. This change to IFRS does not affect the Company's operations and will be the basis for all future financial reporting of the Company.

The following represents the financial and operating highlights for the three month period ended March 31, 2011.

FIRST QUARTER 2011 HIGHLIGHTS

  • Average daily production increased 84% to 509 BOE/d compared to 276 BOE/d in 2010.
  • Oil & Gas revenue increased to $2.6M for the quarter which represents an increase of 126% compared to $1.1M the same quarter in 2010.
  • Oil and NGL production (bbls) increased 156% compared to the same quarter in 2010.
  • Cash Flow from Operating activities (used-in) increased to $3.7M for the quarter, compared to $715,066 for the three months ended March 31, 2010.
  • 338% increase in Funds Flow from Operations to $1,059,317.
  • Field Netbacks increased 54% to $34.24 per BOE.
  • Royalties on oil and gas operations for the quarter were $3.94 per BOE ($180,500).
  • Operating Expense decreased by 12% on a barrel of oil equivalent basis to $18.99 per BOE ($869,572).
  • Depletion and Depreciation costs were $20.03 per BOE ($917,242).
  • General and Administration Expenses for the quarter were $7.16 per BOE ($327,935).
  • Capital Expenditures for the quarter increased 413% to $3.4M as the Company was very active in land acquisitions, geophysical activities, drilling, completion and tie-in of wells.

Solara advises that it has a very active drilling program planned for the second quarter of 2011 including the drilling of up to three horizontal wells to compliment its existing producing Cardium oil wells in the Buck Lake (Pembina) area of Alberta. It will also be drilling two wells to evaluate the oil potential of separate Leduc D3 reef anomalies situated in the Sylvan Lake area of central Alberta. As well, it will be commencing the drilling of two conventional vertical wells on the Rivercourse and Borradaile oil projects within the next two weeks. The drilling emphasis of the Company is entirely on oil projects situated in Alberta. The Company continues to increase production on its Dewberry Property through recompletions and workovers.

The Company also advises that is redeeming all 8.5% fixed rate unsecured subordinated convertible debentures which were issued in July, 2006. The Company will redeem the debentures by the payment of cash in the amount of $2,756,000 and any outstanding interest to the debentureholders who tender their debentures on or after July 7, 2011.

Solara is also pleased to announce that it has appointed Willie Dawidowski, CA to the position of Chief Financial Officer effective as of July 22, 2011. Mr. Dawidowski brings over thirty years of financial and tax accounting experience to the Company.

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.

76,383,902 Class A Shares

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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