Tango Energy Inc.
TSX VENTURE : TEI

Tango Energy Inc.

January 23, 2008 23:59 ET

Tango Energy Inc: 2007 & 2008 Drilling Program Update

CALGARY, ALBERTA --( Marketwire - Jan. 23, 2008) - Tango Energy Inc. ("Tango") (TSX VENTURE:TEI) is pleased to provide this update to shareholders. Tango's 2007 average production rate is expected to be about 700 barrels of oil equivalent per day ("boepd") compared with approximately 330 boepd for 2006. The 16-14 well at Cecilia was drilled in the fourth quarter of 2007 and placed on stream in mid December at a production rate of approximately 60 boepd net to the company. Tango also drilled a well at Deanne during the fourth quarter of 2007 which is anticipated to be tied-in by the end of the June, 2008. Tango's recent new pool discovery in Quaich was flow tested at just over 4 million cubic feet of gas per day (400 boepd net to Tango) and is expected to be tied in by Compton Petroleum Ltd., the operator, before the end of June, 2008. Tango and it's partner have also recently acquired additional crown petroleum and natural gas rights on this play and anticipates that this play shall attract a significant amount of Tango's 2008 capital budget.

Funds flow from operations for 2007 will be approximately $5.2 million and net debt at December 31, 2007 will be approximately $5.3 million. Tango currently has available a $9.5 million operating line of credit and a $2.75 million acquisition/development line of credit.

Tango plans to spend approximately $6.5 million on its 2008 capital program which contemplates a number of development and exploratory drilling opportunities in its core areas that could allow Tango to exit 2008 at approximately 1100 boepd. This capital program will be financed substantially from funds flow from operations but Tango expects to incur some additional debt to complete its planned programs with the result that it's debt to cash flow ratio is expected to increase to 1.4 at year end 2008. In it's forecast models Tango has used an average natural gas price forecast of $6.32/mcf for 2008. Tango will update shareholders quarterly or as results from operations require.

Tango has recently revised and updated its website which can be found at www.tangoenergy.com. Tango Energy Inc. is listed on the TSX-Venture Exchange under the Symbol TEI.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This release contains forward-looking information. By their nature, forward-looking statements involve assumptions and known and unknown risks and uncertainties that may cause actual future results to differ materially from those contemplated. These risks include such things as volatility of oil and gas prices, commodity supply and demand, fluctuations in currency and interest rates, ultimate recoverability of reserves, timing and costs of drilling activities and pipeline construction, new regulations and legislation and availability of capital. Tango does not undertake to update any such forward-looking statements except as required by law. Please refer to Tango's Annual Report for more detail as to the nature of these risks and uncertainties. Although Tango believes that the expectations represented by these forward looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

Natural gas volumes have been converted to a barrel of oil equivalent ("boe") using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with Canadian Securities Regulators National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Boe's may be misleading, particularly if used in isolation.

Funds flow from operations and funds flow from operations per share and netback are not recognized measures under Canadian generally accepted accounting principles. Management believes that these items are a useful measure of financial performance. Funds flow from operations is defined as net income plus non-cash charges including, depletion, depreciation and accretion, future taxes and stock-based compensation, after asset retirement costs. Funds flow from operations per share is calculated by dividing the weighted average number of shares outstanding during the year into funds flow from operations. Netback is the average per unit of volume for oil and gas revenues less royalties and production costs incurred. Netback is expressed in terms of dollars per boe.

Contact Information

  • Tango Energy Inc.
    John M. Gunn
    President and CEO
    (403) 266-5688

    or

    Tango Energy Inc.
    David E. Blain
    VP Finance and CFO
    (403) 266-5688
    Fax: (403) 266-8817