Tango Energy Inc.
TSX VENTURE : TEI

Tango Energy Inc.

March 21, 2007 23:59 ET

Tango Releases Year-End Reserves and Operations Update

CALGARY, ALBERTA--(Marketwire - March 21, 2007) -

Oil and Gas Reserves

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Tango's (TSX VENTURE:TEI) proved plus probable petroleum and natural gas reserves (net before royalty) increased 44%, after production, to 2,511 mboes as at December 31, 2006. Net reserve additions, after production, were 770 mboe, which replaced approximately 735% of Tango's production volumes during 2006. Finding and development costs, on a proven only basis, including future capital and net of revisions were $29.57 per boe. Finding and development costs, on a proven and probable basis, including future capital and net of revisions, were $19.51 per boe.

Tango's reserves for the year ended December 31, 2006 were evaluated by Paddock Lindstrom & Associates Ltd. ("Paddock Lindstrom"), and were calculated in accordance with National Instrument 51-101 ("NI 51-101").

The following tables provide information on Tango's petroleum oil and gas reserves and the present value of the estimated future net cash flow associated with such reserves as at December 31, 2006. The information set forth below is derived from the Paddock Lindstrom report, which has been prepared in accordance with the standards contained in the COGE Handbook and the reserves definitions contained in NI 51-101 and the COGE Handbook. It should not be assumed that the estimated future net cash flow shown below is representative of the fair market value of the Corporation's properties. There is no assurance that such price and cost assumptions will be attained and variances could be material. "Gross" reserve quantities include the Company's share of reserves before royalty plus royalty income volumes. "Net" reserve quantities include the Company's share of reserves after royalty plus royalty income volumes.



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SUMMARY OF OIL AND GAS RESERVES

AND NET PRESENT VALUES OF FUTURE NET REVENUE

as of December 31, 2006

FORECAST PRICES AND COSTS

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RESERVES

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LIGHT AND NATURAL NATURAL GAS

MEDIUM OIL GAS LIQUIDS

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RESERVES CATEGORY Gross Net Gross Net Gross Net

(mbbl) (mbbl) (mmcf) (mmcf) (mbbl) (mbbl)

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PROVED

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Developed Producing - - 3,970 3,215 47 32

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Developed Non-Producing - - 3,609 2,367 25 16

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Undeveloped - - - - - -

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TOTAL PROVED - - 7,579 5,582 72 48

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PROBABLE - - 6,510 4,965 88 59

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TOTAL PROVED PLUS PROBABLE - - 14,089 10,547 160 107

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NET PRESENT VALUES OF FUTURE NET REVENUE

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BEFORE INCOME TAXES DISCOUNTED AT

(%/year)

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0 5 10 15 20

RESERVES CATEGORY (m$) (m$) (m$) (m$) (m$)

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PROVED

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Developed Producing 24,904 18,817 15,331 13,082 11,507

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Developed Non-Producing 13,537 11,369 9,841 8,687 7,776

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Undeveloped - - - - -

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TOTAL PROVED 38,441 30,186 25,172 21,769 19,283

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PROBABLE 33,629 20,553 14,220 10,460 7,975

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TOTAL PROVED PLUS PROBABLE 72,070 50,739 39,392 32,229 27,258

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NET PRESENT VALUES OF FUTURE NET REVENUE

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AFTER INCOME TAXES DISCOUNTED AT

(%/year)

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0 5 10 15 20

RESERVES CATEGORY (m$) (m$) (m$) (m$) (m$)

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PROVED

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Developed Producing 23,326 18,019 14,887 12,817 11,341

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Developed Non-Producing 9,461 7,895 6,794 5,964 5,308

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Undeveloped - - - - -

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TOTAL PROVED 32,787 25,914 21,681 18,781 16,649

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PROBABLE 23,831 14,380 9,775 7,033 5,218

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TOTAL PROVED PLUS PROBABLE 56,618 40,294 31,456 25,814 21,867

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SUMMARY OF PRICING AND INFLATION RATE ASSUMPTIONS

as of December 31, 2006

FORECAST PRICES AND COSTS

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OIL

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Cromer

Edmonton Hardisty Medium

WTI Par Price Heavy 29.0

Cushing 40 degrees 12 degrees degrees

Oklahoma API API API

Year ($US/bbl) ($Cdn/bbl) ($Cdn/bbl) ($Cdn/bbl)

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Forecast

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2007 61.00 68.58 37.58 63.78

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2008 60.00 67.40 38.40 62.69

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2009 60.00 67.37 41.37 62.66

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2010 58.00 65.04 40.54 60.49

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2011 56.00 62.71 37.88 58.32

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NATURAL Edmonton

GAS(1) Cond. & INFLATION EXCHANGE

AECO Gas Natural RATES RATE

Price Gasolines

Year ($Cdn/MMBTU) ($Cdn/bbl) %/Year ($US/Cdn)

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Forecast

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2007 7.33 68.58 2.0 0.87

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2008 7.91 67.40 2.0 0.87

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2009 7.89 67.37 2.0 0.87

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2010 7.87 65.04 2.0 0.87

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2011 8.02 62.71 2.0 0.87

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Forecast product prices and operating costs were escalated at a rate of 2.0% per year beyond 2011. The exchange rate used for the US/Canadian dollar was 0.87. The forecast prices presented above utilize Paddock Lindstrom's price forecast as at December 31, 2006.

Additional reserve information as required under NI 51-101 will be included in Tango's 51-101F1, 51-101F2 and 51-101F3 which will be filed on SEDAR.

Operations Update

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Tango is pleased to announce that current production levels have increased by more than 50% from previously announced exit rates of 500 boepd to current levels which are in excess of 750 boepd. Additional production volumes are expected from the tie in of the Ricinus 6-9 well prior to the end of March, 2007 as well as from optimization initiatives which are currently underway.

At Hanlan, the 14-35 well has been placed on production and is currently producing in excess of 10 million cubic feet per day of raw gas. Tango has a 28% working interest (WI) in this well, subject to a 12.5% non-convertible overriding royalty.

At Kakwa, the 13-1 Swan Hills well has been drilled to total depth. The well was acidized during the first week of March, and testing operations were not completed due to wildlife constraints which required all of the equipment to be removed from the lease prior to March 15. As a result, the well has been suspended pending further evaluation of the pressure data. Tango has a 30% WI in this well.

At Ricinus, the 6-9 well has been tied in and is expected to come on production prior to the end of March, 2007. Tango has a 67.5% WI in this well. Additionally, Tango acquired an additional 6 sections offsetting this discovery at the March 7 land sale at an average 67.5% WI.

At Quaich, the 3-3 well has been successfully tested and evaluated. The operator is in the process of constructing a new pipeline into the area during 2007, which is expected to result in additional opportunities on Company owned lands.

Outlook

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Tango continues its strategy of pursuing re-entry candidates in west central Alberta where it has identified gas potential in previously drilled wellbores. As well, it will follow up on previous discoveries with additional drilling, tie in, and land acquisition activities. Crown land sales will continue to be an integral part of Tangos' strategy in the future. Access to quality services and field personnel and reasonable prices will likely continue to be a challenge for Tango, as well the oil and gas industry in general.

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 of such forward-looking statements. 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.

BOE's may be misleading, particularly if used in isolation. In accordance with NI 51-101, a barrel of oil equivalent (boe) conversion ratio of 6 mcf: 1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Abbreviations used are defined as flows: m$ (thousands of dollars); mcf (thousand standard cubic feet); mmcf (million standard cubic feet); mboe (thousands of barrels of oil equivalent); mmBTU (million British Thermal Units).

Contact Information

  • Tango Energy Inc.
    John M. Gunn
    Chief Executive Officer
    Phone: (403) 266-5688

    or

    Tango Energy Inc.
    John E. Bell
    President
    Phone: (403) 266-5688
    Fax: (403) 266-8817