Spitfire Energy Ltd.
TSX VENTURE : SEL

Spitfire Energy Ltd.

February 28, 2007 14:14 ET

Spitfire Energy Announces Q3 Results and Swab Test from Significant Well

CALGARY, ALBERTA--(CCNMatthews - Feb. 28, 2007) - Spitfire Energy Ltd. (TSX VENTURE:SEL) is pleased to release its operational and financial results for the third quarter of fiscal 2007. For details, please refer to the Company's management's discussion and analysis and financial statements for the three-month period ending December 31, 2006 on Spitfire's website at www.spitfireenergy.com and on SEDAR at www.sedar.com.

Third quarter fiscal 2007 highlights

- Spitfire continued to climb in the first nine months of fiscal 2007, achieving record production, revenue and cash flow. Compared with the same period in fiscal 2006, average production increased 112% to 278 barrels of oil equivalent per day (boed), oil and gas revenues increased 104% to $3.6 million and cash flow from operations increased 60% to $973,000.

- Spitfire recently conducted a swab test on a well in which it owns an 84% working interest for a period of 12.5 hours over two days. The Company recovered 27.14 cubic meters of oil and 9.8 cubic meters of water (net of load fluid) representing an oil cut of 73% and 13.7 barrels of oil per hour. Based on this test, the daily rate extrapolates to 329 bopd (277 net boed). The well is currently being connected to Spitfire's facility and production will commence in a few days. Stabilized production rates are expected to be lower than the test rate.

- Spitfire participated in six (4.34 net) wells so far this fiscal year, resulting in two gas wells and one oil well for a success rate of 50%. Two additional wells have been surveyed and are awaiting partner approval.

- Spitfire's January 2007 production was 345 boed, with productive capability in excess of 400 boed, consisting of 70% crude oil. Approximately 35 bopd has come from a new pool in Verlo, Saskatchewan that commenced production in August and stabilized in the third quarter after producing a small associated gas cap. Another 53 boed has come from two wells drilled in Pakowki, Alberta in the first quarter and put on production in the third quarter of fiscal 2007.

Spitfire Energy Ltd. is a junior oil and gas company engaged in the exploration, development and production of natural gas and crude oil reserves. Spitfire's common shares trade on the TSX Venture Exchange under the symbol "SEL".

This press release contains forward-looking statements that are based on current expectations. There are a number of risks and uncertainties associated with the oil and gas industry that could cause actual results to differ materially from those anticipated.

A barrel of oil equivalent, derived by converting gas to oil using a ratio of six thousand cubic feet of gas to one barrel of oil, may be misleading, particularly if used in isolation. A boe conversion 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 does not accept responsibility for the adequacy or accuracy of the contents of this press release.

Contact Information

  • Spitfire Energy Ltd.
    Keith N. Chase
    President and Chief Executive Officer
    (403) 205-3400 x224
    or
    Spitfire Energy Ltd.
    Danny Zivkusic
    Chief Financial Officer
    (403) 205-3400 x228