Zapata Energy Corporation
TSX VENTURE : ZCO

Zapata Energy Corporation

November 21, 2005 09:00 ET

Zapata Earns $3.6 Million in Q3 2005

CALGARY, ALBERTA--(CCNMatthews - Nov. 21, 2005) - Zapata Energy Corporation (TSX VENTURE:ZCO) is pleased to report operating and financial results for its third quarter ended September 30, 2005.



OPERATIONAL & FINANCIAL HIGHLIGHTS
------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
(Thousands unless % %
otherwise noted) 2005 2004(1) Change 2005 2004(1) Change
------------------------------------------------------------------------
FINANCIAL
Gross revenue $ 14,604 $ 12,252 19% $ 41,587 $ 30,180 38%
Cash flow
from
operations 7,397 6,029 23% 20,337 14,330 42%
Per share
(basic) 0.90 0.75 20% 2.51 1.79 40%
Per share
(diluted) 0.87 0.70 25% 2.40 1.66 44%
Net income 3,552 2,672 33% 7,611 4,553 67%
Per share
(basic) 0.43 0.33 30% 0.94 0.57 65%
Per share
(diluted) 0.42 0.31 36% 0.90 0.53 70%
Capital
expenditures 5,914 7,395 (20%) 14,817 19,487 (24%)
Bank debt and
working capital
deficiency 25,804 28,485 (9%) 25,804 28,485 (9%)
Shares
outstanding
(weighted
average)
Basic 8,199 8,030 2% 8,118 7,992 2%
Diluted 8,485 8,648 (2%) 8,481 8,635 (2%)
------------------------------------------------------------------------
OPERATIONS
Natural gas
sales (mcf/d) 8,135 9,816 (17%) 8,537 8,378 2%
Average sales
price ($/mcf) 9.02 6.52 38% 8.10 6.76 20%
Field netback
($/mcf) 4.87 3.55 37% 4.32 3.82 13%
Oil sales
(bbls/d) 1,278 1,321 (3%) 1,384 1,114 24%
Average sales
price ($/bbl) 60.05 48.71 23% 54.10 44.55 21%
Field netback
($/bbl) 33.15 25.38 31% 28.87 20.43 41%
NGL sales
(bbls/d) 145 164 (12%) 154 144 7%
Average sales
price ($/bbl) 59.44 45.24 31% 53.50 40.85 31%
Field netback
($/bbl) 42.90 30.87 39% 37.10 27.99 33%
Total sales
(boe/d 6:1) 2,778 3,121 (11%) 2,961 2,654 12%
Average sales
price ($/boe) 57.13 43.50 31% 51.44 42.26 22%
Field netback
($/boe) 31.74 23.54 35% 27.89 22.14 26%
------------------------------------------------------------------------
------------------------------------------------------------------------

(1) Restated - see note 2 to the third quarter 2005 consolidated
financial statements.


- Consistent production and strong commodity prices allowed Zapata to achieve its strongest quarter ever, earning $3.6 million ($0.42 per diluted share) compared with $2.7 million ($0.31 per diluted share) earned in the third quarter of 2004. For the nine months ended September 30, net income increased 67 percent to $7.6 million ($0.90 per diluted share) from $4.6 million in 2004.

- Zapata set a new record for cash flow from operations, achieving a 23 percent increase in third quarter results to $7.4 million in 2005 from $6.0 million in 2004 and a 42 percent jump in nine month results to $20.3 million in 2005 from $14.3 million in 2004.

- Despite heavy rain and flooding which hindered production in the third quarter, strong commodity prices pushed the Corporation's third quarter revenues up by 19 percent to $14.6 million and by 38 percent to $41.6 million for the nine-month period.

- Although average nine-month production sales averaged 2,961 barrels of oil equivalent per day (boe/d), a 12 percent improvement from 2004, heavy rain and flooding delays in June and July and again in late August and early September lowered Zapata's third quarter production to 2,778 boe/d.

- Because of high cash flow and delayed capital spending, Zapata continued to reduce its total debt and working capital deficit by $6.0 million from $31.8 million at December 31, 2004 to $25.8 million at September 30, 2005.

OUTLOOK

- With cash flow from operations now averaging $2.5 million per month, Zapata has made a strategic decision to commit to a year-round drilling program. This will enable Zapata to increase production throughout the year and take full advantage of its extensive prospect inventory.

- Zapata currently has two rigs drilling which the Corporation plans to sustain through the winter. In the fourth quarter, Zapata anticipates drilling 25 (24 net) wells. Of these, seven 100 percent-owned wells are already complete, resulting in three gas wells, three oil wells and one abandonment.

- Zapata's production is averaging 3,200 boe/d at present.

- Zapata is pleased to announce its appointment of Mr. Don Johnson as Operations Manager. Mr. Johnson brings to Zapata over 35 years of industry experience ranging from production operations to completions and workovers, as well as safety and environmental management.

Zapata's complete third quarter 2005 report, which includes management's discussion and analysis and financial statements, is available on the company's website and at www.sedar.com. 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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