Zapata Energy Corporation
TSX VENTURE : ZCO

Zapata Energy Corporation

March 07, 2007 10:27 ET

Zapata Approves $19.5 Million Capital Budget for 2007

CALGARY, ALBERTA--(CCNMatthews - March 7, 2007) - Zapata Energy Corporation (TSX VENTURE:ZCO) announced today that its board of directors has approved a capital budget for 2007 of $19.5 million and up to $30 million depending on commodity pricing, tie-in delays and drilling results. Zapata's capital spending is expected to allow for conservative growth from existing properties while achieving significant debt reduction. The Corporation has budgeted to reduce its net debt by $11 million in 2007. By reducing its debt the Corporation will be in a strong position to take advantage of opportunities if appropriate. The budgeted amounts are based on existing operations and do not include potential corporate or property acquisitions.

Outlook

Zapata is steadily increasing its production. In its last news release Zapata indicated it had 200 barrels of oil equivalent per day (boepd) restricted by pipeline or plant capacity and an additional 600 boepd behind pipe awaiting tie-in. A third of the behind pipe production was recently brought on line, while an additional third is expected to be on production near the end of the first quarter of 2007. The remaining third has been delayed until the third quarter of 2007. With these changes and with normal production declines, Zapata anticipates it will produce an average of 3,250 boepd in the first quarter of 2007. With the Corporation's conservative plans for the current year, Zapata is forecasting average production of 3,400 to 3,700 boepd in 2007. This compares with average production of 3,125 boepd (estimate) for 2006 and 2,989 boepd in 2005. Zapata continues to have a balanced oil and gas production portfolio which has assisted in maintaining its strong financial position.

Option Grant

On February 9, 2007, Zapata issued 80,000 options to its directors at the closing price for the day of $4.85 per share in accordance with its directors' compensation plan. The options expire five years from the date of grant and are subject to standard vesting provisions. After taking into account this grant of options, the Corporation will have 1,395,000 options outstanding, 17,410,578 common shares outstanding and 18,805,578 fully diluted shares outstanding.

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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