2006 year end results: sharp increase in revenues, up by 57.72% and net earnings, up by 38.34%



    TSX: PBC

    MONTREAL, March 30 /CNW Telbec/ - PEBERCAN INC. (the ''Company''),
(TSX: PBC) is pleased to present its results for the period ended December 31,
2006. All amounts referred to in this press release are in U.S. dollars.

    Highlights:
    -----------

    
    Performance: 2006 compared to 2005

    - Revenues: + 57.72% to $111.66 million
    - Gross profit: +39.44% to $43.47 million
    - Net earnings: + 38.34% to $30.55 million
    - Net profit margin: 27.36% on the turnover
    - Proven reserves: 12.9 Mbbl
    - Proven and probable reserves: 15.9 Mbbl
    - Cash flow: +59% to $84.5 million
    - Number of wells in production at the end of 2006: 34
    - Total production from Block 7 : + 43.55% to 7.188 Mbbl

    Sharp Increase in Net Earnings
    ------------------------------

    For the year ended December 31, 2006, Pebercan recorded total revenues of
$111.6 million, compared to $70.8 million in 2005. Revenues derived from oil
sales totalled $108.1 million, with a $29.9 million contribution from profit
oil and $78.2 million from the recovery of expenses, compared to $66.4 million
in total revenues in 2005. The combined impact of a higher price per barrel,
coupled with a notable increase in production, resulted in a significant
growth in operations.
    Accordingly, for the year 2006, Block 7's production totalled
7,188,199 barrels (19,694 barrels/day), an increase of 43.53% compared to
2005. Pebercan's net share increased by 33.63%, compared to 2005, to
2,972,241 barrels (8,143 barrels/day). The average gross selling price of oil
was $36.40 per barrel, an increase of 22 % from 2005.
    The increase in production results from major investments from the
previous year, when 5 new wells were drilled. The Company's investments
totalled $74.6 million in 2006, compared to $57.2 million in 2005.
    Production costs per barrel of oil are currently at $3.83, as fixed costs
are amortized over a higher number of barrels. The amortization of the oil
properties totalled $45.1 million or $15.17 per barrel, a sharp increase from
2005, due to significantly higher investments towards the development of the
oil reserves.
    As a result, the Company recorded net earnings of $30.55 million, an
increase of 38.34% over the year, with a net profit margin of 27.36%. Finally,
cash flow totalled $84.5 million in 2006, compared to $52.9 million in 2005.

    Reserves
    --------

    As at December 31, 2006, total proven and probable reserves on Block 7
were estimated at 44.6 million barrels of oil, of which Pebercan's net share
totalled 15.9 million barrels, compared to 22,8 million barrels, as at
December 31, 2005. This estimate was prepared by BEICIP-Franlab, a subsidiary
of the French Institute for Petroleum. This organization, which has been
working in Cuba for more than 20 years, understands fully the complexity of
the Cuban geology and, in particular, of the fractured carbonate reservoirs
from which the Company derives its oil production. BEICIP-Franlab is
recognized by the Canadian and international financial communities, and its
evaluation was prepared in accordance with National Instrument 51-101 of the
Canadian Securities Administrators.
    The renewal rate remains normal, proven reserves totalling 12.9 million
barrels as at December 31, 2006, compared to 12.6 million barrels as at
December 31, 2005. This renewal rate results from the development of the
Seboruco and Santa Cruz deposits.
    Probable reserves decreased substantially after being reclassified as
proven reserves, as drilling operations, both on Seboruco and Santa Cruz,
confirmed the extent of the deposits. However, the probable reserves of the
Canasi deposit are likely to fall substantially since the contract is for a
limited time and there is no firm commitment to drill and produce such
reserves in 2007. The output from the Santa Cruz wells, which was under the
previous year's estimates, also reduced the estimated probable reserves.
    Notwithstanding the fact that the proven reserves were renewed, their life
expectancy decreased to 4.6 years, compared to 5.8 the previous year, as a
result of the significant increase in production during 2006.


    Summary of oil reserves, as at December 31, 2006
    Fixed costs and expenses

    (in millions of barrels)                              2006        2005
    -------------------------------------------------------------------------
    Proven net reserves(1)                                12.9          13
    -------------------------------------------------------------------------
    Probable net reserves(1)                               3.2        10.9
    -------------------------------------------------------------------------

    TOTAL                                                 16.1        23.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Net reserves: refers to the Company's share of the oil fields' total
        reserves (based on its percentage of interest therein), taking into
        account the provisions of the production sharing agreement, as it
        relates to cost oil and profit oil, and excluding payment of Cuban
        taxes.

    Additional information on the reserves will be available in the Company's
annual information form to be posted on SEDAR's website at: www.sedar.com and
on the Company's website at: www.pebercan.com.

    Oil Production
    --------------

    Total billable production for all (100%) of Block 7 went from 5 million
barrels in 2005, to 7.1 million barrels in 2006, for an average of
19,694 barrels per day.
    This sharp increase is mainly due to the fact that three new wells on the
Seboruco deposit and seven new wells on the Santa Cruz deposit were brought on
stream.

    Net Production: 2,972,241 barrels or 8,143 barrels per day
    ----------------------------------------------------------

    Net production refers to the Company's share of the oil fields' production
(based on its percentage of interest therein), taking into account the
provisions of the production sharing agreement, as it relates to cost oil and
profit oil, and excluding payment of Cuban taxes.


    Financial Highlights:
    ---------------------


    Consolidated Statements: Pebercan Inc.
    ------------------------------------------                 December 31,
    In thousands (except for figures per share
     and number of wells)                                 2006        2005
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oil sales (gross) ($)                              108,191      66,460
    -------------------------------------------------------------------------
    Drilling services ($)                                3,469       4,333
    -------------------------------------------------------------------------
    Total revenues ($)                                 111,660      70,793
    -------------------------------------------------------------------------
    Net earnings ($)                                    30,557      22,088
    -------------------------------------------------------------------------
    Basic net earnings per share ($)                      0.42        0.31
    -------------------------------------------------------------------------
    Diluted net earnings per share ($)                    0.40        0.29
    -------------------------------------------------------------------------
    Cash flow before non-cash items ($)                 84,515      52,953(1)
    -------------------------------------------------------------------------
    Selling price of oil (gross) ($)                     36.40       29.87
    -------------------------------------------------------------------------
    Total production: Block 7 (in '000s of barrels)      6,766       5,008
    -------------------------------------------------------------------------
    Retroactive production of the Santa Cruz deposit
     (in '000s of barrels)                                 423(3)
    -------------------------------------------------------------------------
    Pebercan's proportionate share
     (in '000s of barrels)                               2,972       2,225
    -------------------------------------------------------------------------
    Number of wells in operation,
     at the end of the period                               34          24(2)
    -------------------------------------------------------------------------
    Weighted average number of shares outstanding:
    -------------------------------------------------------------------------
    Basic                                           73,432,390  72,073,951
    -------------------------------------------------------------------------
    Diluted                                         75,822,110  75,445,415
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Please refer to the note "Measures not consistent with GAAP"
    (2) Does not include two wells which were temporarily closed on the
        Canasi deposit, and the production from Santa Cruz 100,300 and Tarara
        100, none of which is yet marketable.
    (3) The Santa Cruz deposit was declared marketable on June 30, 2006 and
        its production was included, during the second quarter of 2006, in
        Block 7's billable production.


    -------------------------------------------------------------------------
    In thousands of $
    (except for current ratio)                        December    December
                                                            31,         31,
                                                          2006        2005
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash and cash equivalents                           15,212      17,807
    -------------------------------------------------------------------------
    Working capital                                     59,152      43,117
    -------------------------------------------------------------------------
    Current ratio                                          2.4         3.6
    -------------------------------------------------------------------------
    Oil and gas properties                             131,123     101,519
    -------------------------------------------------------------------------
    Total assets                                       234,547     168,980
    -------------------------------------------------------------------------
    Shareholder's equity                               160,309     128,549
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Investments for exploration and development work on the oil properties
totalled $74,684,000 in 2006, compared to $57,244,000 in 2005.

    Events Subsequent to the Year End

    An account receivable of $65 million appears on the balance sheet for
2006, $37 million of which is made up of late payments owed by Cupet. To date,
the negotiations initiated since the beginning of 2007 have not led to a
signification reduction in the number of days by which CUPET is in default.
    After considering the specific requirements associated with the
development and operation of the Cuban oil deposits, and in order to maximize
the possible operational synergies between Pebercan and its partner in
Block 7, Sherrit International (Cuba) Oil and Gas Limited ("Sherritt"),
Pebercan decided, at the beginning of 2007, to transfer its responsibilities
as operator of Santa Cruz to Sherritt, which already acts as operator on
Canasi and Seboruco. As a result of combining the operation, the Company has
decided to sell the rig owned by Pebermat.
    Pebercan continues to hold a majority interest of 60% in Canasi, and of
55%, both in Seboruco and Santa Cruz. Furthermore, pursuant to the production
sharing agreement signed with the Cuban authorities, Pebercan remains the sole
representative of the Block 7 partners.

    Outlook:
    --------

    In the next few years, Pebercan intends to continue exploring and
developing its oil deposits which are currently in production on Block 7.
    The Company is also working on other alternative means to improve the
recovery of oil, such as thermal reclaiming methods, as well as a digital
simulation of a gas steam injection project. The results which are expected in
the 2nd Quarter of 2007 could lead to the installation of a pilot on Canasi.
    The Company wishes to obtain additional exploration blocks and is working
towards that end.

    Drilling Program for 2007
    -------------------------

    Pebercan is considering, in 2007, continuing the intense development of
its Cuban oil concessions. In fact, the Block 7 partnership intends to invest
between $120 million (firm budget) and $190 million (firm budget + optional),
notably for the drilling of eight firm wells and six conditional wells, based
on the drilling results of the firm wells, and the availability of the
required funds and technical capacity. In all, the drilling program could
include up to 14 wells, whereas 10 wells were drilled in 2006.
    Specifically, the Company is considering drilling four wells (two firm
and two conditional) on Seboruco, one conditional well on Canasi, and nine
wells on Santa Cruz (six firm and three conditional).
    The consolidated interim financial statements and management's discussion
and analysis thereon, for the period ended December 31, are available on the
Company's website at: www.pebercan.com and on SEDAR's website at:
www.sedar.com.

    PEBERCAN Inc. is involved in the exploration, development and operation
of oil reserves in the Republic of Cuba. Its mining domain includes three
concessions covering 93 km(2), including Block 7, the only concession operated
to date. PEBERCAN sells all of its production to the Cuban government, but is
not subject to any restrictions on the sale of its oil. The Company's shares
are listed on the TSX under the symbol PBC.

    Legal Notice - Forward-Looking Statements
    -----------------------------------------

    The forward-looking statements contained in this press release involve a
number of known and unknown risks and uncertainties as well as other factors,
the effect of which may be that the Company's actual results, performance and
accomplishments differ significantly from the future results, performance and
accomplishments stated or implied in such forward-looking statements. The
Company has no obligation to update or modify such forward-looking statements,
either as a result of new information, future events or for any other reason,
and we expressly deny any such obligation in relation thereto. The Company's
most recent annual and interim reports and other documents filed with the
relevant securities commissions and regulators in Canada contain important
additional information on such risks and uncertainties.
    %SEDAR: 00004118EF




For further information:

For further information: PEBERCAN Inc: Patrice Bedu (VP Exploration),
(514) 286-5200, pbedu@pebercan.com; RENMARK Financial Communications Inc., 
www.renmarkfinancial.com; Henri Perron : hperron@renmarkfinancial.com;
Danielle Velez : dvelez@renmarkfinancial.com; Media - Vanessa Napoli : 
vnapoli@renmarkfinancial.com; (514) 939-3939; Fax: 514-939-3717

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PEBERCAN INC.

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