Westchester Resources Inc.

Westchester Resources Inc.

February 28, 2005 16:00 ET

Westchester Resources Inc. Announces Results For The Three Months Ended December 31, 2004


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: WESTCHESTER RESOURCES INC.

TSX VENTURE SYMBOL: WSR

FEBRUARY 28, 2005 - 16:00 ET

Westchester Resources Inc. Announces Results For The
Three Months Ended December 31, 2004

TORONTO, ONTARIO--(CCNMatthews - Feb. 28, 2005) - Westchester Resources
Inc. (TSX VENTURE:WSR) announces financial results for the three months
ended December 31, 2004.

Westchester is principally engaged in the business of exploration,
development and production of oil and gas. Westchester together with its
joint venture partner Aspen Group Resources Inc. (TSX- "ASR"), has an
interest in prospective lands with oil and gas potential in
Saskatchewan, North Dakota and Manitoba. Westchester also holds an
interest in an oil and gas producing property in the Province of Alberta.

Westchester had working capital of $3,299,376 at the end of the quarter
ended December 31, 2004 compared to working capital of $124,868 at March
31, 2004.

Westchester incurred a net loss in the quarter ended December 31, 2004
of $37,984 compared to a net loss of $41,548 in the quarter ended
December 31, 2003.

Revenues during the quarter ended December 31 2004 aggregated $19,722
and were comprised of interest income of $(2,477) and oil and gas
revenues net of royalties of $22,199 from Westchester's interest in the
Sturgeon Lake property located in Alberta which were recognized for the
first time in the prior quarter. Gross revenue from the Sturgeon Lake
property for the quarter was $31,976 based on 841 barrels of oil
equivalent ("BOE") (or 9.1 BOE/day) at an average price of $38.00 per
BOE. Revenues during the quarter were reduced by $9,777 ($11.62 per BOE)
as a result of royalties paid relating to the Sturgeon Lake property.
Until Westchester acquires additional revenue producing properties or
Westchester's existing exploration stage properties reach production,
Westchester expects future revenues to vary depending upon commodity
prices and production from the Sturgeon Lake property.

Westchester incurred production and operating costs of $7,683 in the
quarter ended December 31, 2004 all related to the Sturgeon Lake
property. Depletion and depreciation costs were $43,350. Westchester
follows the full cost method of accounting for its oil and gas assets
whereby costs are accumulated in a given cost center and depleted on a
unit of production basis. Costs associated with undeveloped leases are
excluded from the calculation and included at the time the leases are
either developed or the costs are written off if they subsequently are
deemed to have no commercial merit. In this calculation approximately
$830,000 in costs relating to Westchester's interest in the undeveloped
Saskatchewan properties were excluded from the cost base. General and
administrative expenses of $6,672 were accrued during the quarter.

Some of the statements contained in this press release may be
forward-looking statements. Forward-looking statements may include, but
are not limited to, statements concerning estimates of recoverable
hydrocarbons, expected hydrocarbon prices, expected costs, statements
relating to the continued advancement of Westchester's projects and
other statements which are not historical facts. When used in this press
release, and in other published information of Westchester, the words
such as "could", "estimate", "expect", "intend", "may", "potential",
"should", and similar expressions are indicative of a forward-looking
statement. Although Westchester believes that its expectations reflected
in the forward-looking statements are reasonable, the potential results
suggested by such statements involve risk and uncertainties and no
assurance can be given that actual results will be consistent with these
forward-looking statements. Various factors, which could cause actual
results to differ from these forward-looking statements, include the
potential that Westchester's projects will experience technical and
mechanical problems, geological conditions in the reservoir which may
negatively impact levels of oil and gas production and changes in
product prices and other risks not anticipated by Westchester or
disclosed in Westchester's published material. Since forward-looking
statements address future events and conditions, by their very nature,
they involve inherent risks and uncertainties.

ISSUED AND OUTSTANDING COMMON SHARES: 37,730,763

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Westchester Resources Inc.
    Pat DiCapo
    (416) 860-1859
    The TSX Venture Exchange does not take responsibility for the adequacy
    or accuracy of this release.