Zapata Energy Corporation
TSX VENTURE : ZCO

Zapata Energy Corporation

April 17, 2008 09:00 ET

Zapata Achieves Positive Earnings on $21 Million Cash Flow in 2007

CALGARY, ALBERTA--(Marketwire - April 17, 2008) - Zapata Energy Corporation (TSX VENTURE:ZCO) achieved cash flow of $21 million, earned $1.9 million, maintained production and strengthened its balance sheet in 2007 despite a challenging year for the oil and gas industry.



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Year ended December 31
(Thousands except where noted) 2007 2006 Change
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FINANCIAL
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Gross revenue $ 54,399 $ 54,886 (1%)
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Cash flow from operations 21,065 23,840 (12%)
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Cash flow per share (basic) 1.21 1.41 (14%)
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Cash flow per share (diluted) 1.20 1.37 (13%)
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Net income 1,881 5,931 (68%)
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Net income per share (basic) 0.11 0.35 (69%)
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Net income per share (diluted) 0.11 0.34 (69%)
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Capital expenditures 16,198 46,420 (65%)
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Bank debt 37,950 39,300 (3%)
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Bank debt and working capital deficiency 43,115 46,262 (7%)
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Shares outstanding
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Weighted average (basic) 17,395 16,916 3%
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Weighted average (diluted) 17,551 17,368 1%
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OPERATIONS
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Natural gas sales (mcf/d) 9,252 9,079 2%
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Average sales price ($/mcf) 7.08 6.68 6%
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Field netback ($/mcf) 3.08 3.27 (6%)
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Oil (bbls/d) 1,243 1,465 (15%)
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Average sales price ($/bbl) 58.56 56.15 4%
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Field netback ($/bbl) 31.97 30.72 4%
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NGL (bbls/d) 182 150 21%
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Average sales price ($/bbl) 58.88 49.38 19%
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Field netback ($/bbl) 40.58 31.95 27%
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Combined (boe/d) 2,967 3,128 (5%)
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Average sales price ($/boe) 50.23 48.08 4%
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Field netback ($/boe) 25.48 25.43 0%
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NET ASSET VALUE 142,001 141,664 0%
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Net asset value per share (basic) 8.24 8.13 1%
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Net asset value per share (diluted) 8.15 8.05 1%
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The Corporation spent $5.9 million in 2007 to drill 11 (5.1 net) wells, resulting in nine (3.1 net) gas wells, one net oil well and one net abandoned well. Zapata's total capital program of $16 million, slightly lower than the budgeted amount of $19.5 million, allowed the Corporation to achieve significant debt reduction while maintaining average production at 2,967 barrels of oil equivalent per day. This compares with average production of 3,128 boe/d in 2006. Although Zapata limited its drilling activities in 2007, higher prices for oil and natural gas liquids allowed the Corporation to hold revenues steady in 2007.

The reduced capital budget and a lower natural gas price forecast resulted in a marginal decline in Zapata's year-end reserve base to 8.7 million barrels of oil equivalent (mmboe). The proved plus probable reserves, however, retained a net present value of $163 million (discounted at 10 percent). On a proved plus probable basis, finding and development costs were $17.05 per boe for 2007 and averaged $14.86 for the past three years.

Zapata exited 2007 stronger. Management believes that with a strong balance sheet, upgraded and modernized facilities and a large land and prospect base, Zapata is well positioned to move forward for future growth. Zapata commenced 2008 with an active drilling program in the first quarter having drilled a total of five wells: two (one net) deep gas wells, two (two net) gas wells in our core areas and one (one net) oil well. Three (two net) gas wells are being tied in, the oil well is being placed on production and one (one net) well is being completed. All wells are expected to be producing by the end of April 2008 and are expected to increase both the Corporation's daily production for the second quarter and its reserve base.

Based on Zapata's expectations of continued strength in commodity prices and its recent drilling successes in areas outside of its core areas, the Corporation anticipates a profitable and exciting year for Zapata and its shareholders.

Zapata is a junior oil and gas production company operating in western Canada and trades on the TSX Venture Exchange under the symbol "ZCO."

This press release may include forward-looking statements which are statements other than of historical fact, such as information regarding drilling potential and production forecasts. Factors that could cause actual results to differ materially from our expectations include exploration and development risks, commodity prices and operating hazards. A barrel of oil equivalent (boe), derived by converting gas to oil in the 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 has neither approved nor disapproved of the information contained herein.

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