Exall Energy Corporation announces results for the three and nine months ended September 30, 2011

CALGARY, Nov. 8, 2011 /CNW Telbec/ - Exall Energy Corporation ("Exall " or the "Company") (TSX:EE) is pleased to announce its International Financial Reporting Standards ("IFRS") compliant financial and operating results for the three and nine months ended September 30, 2011. Exall's public filings can all be found at www.exall.com or www.sedar.com.

Highlights:

  • Current production is 1,659 boe/d with September 30 2011 productive capability of 1,965 boe/d,

  • A third quarter 2011 production average of 1,049 boe per day a 23 percent increase over the same period in 2010,

  • A third quarter 2011 field net back of $52.82 per boe a 19 percent increase over the same period in 2010,

  • A third quarter 2011 funds flow from operations of $4,714,519 a 23 percent increase over the same period in 2010,

  • Participated in the drilling of 3.0 gross (2.10 net wells) during the third quarter of 2011, three additional wells have been drilled with all three cased since the end of the third quarter,

  • Acquired 174,400 gross (128,249 net) acres of undeveloped land in the Mitsue area, and

  • Exall has made a significant oil discovery in the Wabamun and Exshaw Formations in and adjacent to the Marten Mountain, Mitsue operational area. The Company is very encouraged by the results of drilling to date and has planned a strategy to further evaluate the potential of both zones.



HIGHLIGHTS Three months ended
September 30
Nine months ended
September 30
  2011   2010   %
change
  2011   2010   %
change
Financial ($)                      
Gross sales 8,043,280   5,188,470   55   22,885,652   15,674,073   46
Funds from operations 4,714,519   3,842,705   23   12,377,589   8,246,497   50
Netback per boe (6:1) ($) 52.82   44.45   19   51.26   37.97   35
Funds from operation per share - basic 0.08   0.07   14   0.20   0.16   25
Net earnings 1,474,145   1,748,834   (16)   4,688,679   3,132,433   50
Net earnings per share - basic 0.02   0.03   (33)   0.08   0.06   33
Capital expenditures, net 16,178,528   4,743,584   241   34,817,257   12,641,406   345
Net debt             24,248,520   10,491,867   131

Production

Exall's average daily production for the third quarter of 2011 increased 23 percent to 1,049 barrels of oil per day ("boe/d") from 854 boe/d in the third quarter of 2010. As at September 30, 2011 Exall's net exit production rate and productive capacity were as outlined below:

           
Field
 
Q3 2011
Production
boe/d
  September 30,
2011 Production
boe/d
  September 30,
2011 Capability
boe/d
           
Marten Mountain, Alberta 951   1,153   1,864
Jayar, Alberta 77   77   80
Overlea, Alberta 13   13   13
Harris Texas 7   7   7
Bow Island, Alberta 1   1   1
           
Corporate Total 1,049   1,251   1,965

The difference between the September 30, 2011 production rate of 1,251 boe/d and the productive capacity of 1,965 boe/d is the result of having one well shut in due to gas handling constraints and having one well shut in awaiting tie in operations. The gas handling constraints were eliminated on October 2011 with the completion of the battery expansion and upgrades at the Company's Mitsue battery. Tie in operations on the second well were completed in early November 2011.

Exall's production strategy is to produce all new wells at a rate approximating their productive capacity during the New Oil Well Production Period ("NOWPP"), which will usually result in the well over producing its allowable as prescribed by the ERCB. As such, each new well will see an initial period of high productivity, significantly enhancing Exall's production, followed by a period where the well is shut in. During the shut in time frame, Exall will, should the facts warrant, apply for additional waterflood approvals which will require water injection wells. Exall may convert existing producing wells into water injection wells if the result were to be an overall increase to, and/or a long term stabilization of production.

Exall estimates that as the number of producing wells continues to increase in the Marten Mountain region of Mitsue, Alberta, the significant production fluctuations now seen by the bringing on and shutting in of new wells will diminish.

Outlook 

Exall has continued to focus its capital in development of the Marten Mountain Prospect area through the third quarter of 2011. Eight gross (5.58 net) wells have been drilled through the first nine months of 2011 adding three producing wells which were tied in and are on stream by September 30, 2011 through the Company-owned pipeline and battery facilities. Completion operations on the remaining five wells will continue through the fourth quarter.

The wells drilled during the third quarter of 2011 have continued to add reserves with multi-zone sand development and identified a number of offset drilling opportunities. The ability to continue development of this key property year round has allowed Exall to increase its production potential and accelerate development plans in the Marten Mountain area.

During the first quarter of 2011, the successful completion of two 3D seismic programs in the Mitsue area has potentially identified two Gilwood sand trends adding two well locations, which are accessible through the summer. Exall is planning to spud the first of the two wells in November to verify the seismic signature. With success the second well will be drilled immediately. Up to fourteen locations have been identified by the seismic programs and with drilling verification will add substantially to the Company's activity and production through 2012 and beyond. The Company has an inventory of up to 40 wells identified on held lands. A number of locations are on lands acquired at recent sales, or farmin and acquisitions. Exall plans to drill five wells through the balance of 2011, for a total of thirteen gross wells for the year.

Exall has completed its battery expansion and completed the modifications to fluid and gas handling capacity to accommodate increasing production rates. The Company's wells are currently constrained by limits to water injection capabilities. An electric drive compressor with adequate capacity to handle future expected increases in gas deliveries will be installed at the battery in the fourth quarter.

Current net production for Exall is approximately 1,659 BOEPD. Exall currently has well capacity to produce approximately 2,000 boe/d as there are three wells awaiting tie in operations. This productive capability reflects the fact that two wells have now come off of primary allowable, as a result these wells are now producing at their allowable rate which is 50% of their primary allowable rate. The target 2011 exit rate is currently estimated at 2,250 - 2,500 boe/d; adjusted for delays encountered to date in the planned 2011 drilling program as a result of the Forest Fires at Slave Lake in the second quarter and as a result of the floods that occurred during the third quarter at Slave Lake. These two events deferred the drilling and resultant completion and tie in activities of two wells into fiscal 2012.

Exall is a light oil-weighted company with high operating margins. Starting from a modest production base of light oil and gas, the Company has shown it is capable of setting and achieving ambitious production and cash flow targets. This puts the Company in a favorable position to exploit existing opportunities and potentially take advantage of opportunities that arise. Exall will continue to focus on organic growth through exploitation and expansion of its existing oil producing properties.

RESULTS OF OPERATIONS

Production                      
  Three months ended
September 30
Nine months ended
September 30
Daily production 2011   2010   %
Change
  2011   2010   %
Change
                       
Oil (bbl/d) 918   724   27   858   712   21
NGLs (bbl/d) 17   11   55   21   11   91
Natural gas (mcf/d) 690   710   (3)   707   673   5
Total production (boe/d) (6:1) 1,049   854   23   997   836   19

Production for the third quarter of 2011 averaged 1,049 boe/d a 23 percent increase over the same quarter in 2010.  On a year over year basis production has increased 19 percent to 997 boe/d in 2011 due primarily to the continued drilling success at Marten Mountain / Mitsue, Alberta.

For the nine months ended September 30, 2011 oil and natural gas liquids accounted for 88 percent of production which is expected to increase as the oil production from additional successful drills in the Marten Mountain area of Alberta are placed on production.

Commodity Pricing                  
  Three months ended
September 30
Nine months ended
September 30
Average sales prices realized 2011   2010 %
Change
  2011   2010 %
Change
                   
Oil ($/bbls) 90.83   73.34 24   92.63   75.46 23
NGLs ($/bbls) 66.06   48.32 37   63.53   59.46 (4)
Natural gas ($/mcf) 4.32   3.82 13   4.29   4.46 7
Weighted average ($/boe) (6:1) 83.32   66.02 26   84.11   68.70 22

The average price received per boe in the third quarter of 2011 increased 26 percent over the same period in 2010 to $83.32. The average price received per boe in the first nine months of 2011 increased 22 percent over the same period in 2010 to $84.11.

The price for light, sweet oil at Edmonton in 2011 averaged $91.82 per barrel in the third quarter and $94.32 for the first nine months of 2011, up from an average of $76.60 for the first nine months of 2010. Alberta natural gas at AECO averaged $3.71 per mcf in the third quarter of 2011, $3.74 per mcf for the first nine months of 2011 and is currently trading at approximately $3.50 per mcf.

The Company's Marten Mountain oil production attracts a price approximating the Edmonton light, sweet oil price due to its high quality.  The Company's Marten Mountain gas production attracts a premium price due to its high heat content. The Company has not entered into any commodity hedges to date.

Oil and Gas Production Sales
  Three months ended
September 30
Nine months ended
September 30
  2011 2010 2011 2010
  $   %   $   %   $   %   $   %
                               
Oil 7,668,033   95   4,888,402   94   21,686,692   95   14,670,884   94
NGLs 101,009   1   49,822   1   370,573   1   184,315   1
Natural gas 274,238   4   250,246   5   828,387   4   818,874   5
Total 8,043,280   100   5,188,470   100   22,885,652   100   15,674,073   100

Oil and gas sales in the third quarter of 2011 increased 55 percent from the same period in 2010 as a result of the 23 percent increase in production and the 26 percent increase in commodity prices received on a period over period basis. For the nine months ended September 30, 2011 oil and gas sales increased 46 percent to $22,885,652 with oil and liquids sales contributing 96 percent of the sales.  The 46 percent increase for the nine months ended September 30, 2011 from the same period in 2010 was a result of the 19 percent increase in production and the 22 percent increase in commodity prices received on a period over period basis.

Royalties
  Three months ended
September 30
Nine months ended
September 30
  2011   2010   %
Change
  2011   2010   %
Change
                       
Royalties $ 2,046,088   1,234,130   66   6,321,397   5,486,645   15
Average royalty rate (%) 25   24   4   28   35   (20)
Royalties ($/boe) 21.19   15.71   35   23.23   24.05   (3)

The flat royalty rate in the third quarter of 2011 is reflective of two facts; 1) during the third quarter of 2010 Exall had shut in two wells which were paying 50% royalties and produced from two other wells which paid 5% royalties, and 2) effective January 01, 2011 the maximum royalty rate was adjusted from 50% to 40%. The decrease in the royalty rate for the first nine months of 2011, as compared with those in 2010, was primarily the result of a significant portion of the Company's production from wells which were  are now paying a maximum royalty rate of 40%.

The increase in royalties per boe in the third quarter reflects the 26 percent increase in commodity prices received during the third quarter of 2011 as compared to the third quarter of 2010 in addition to the marginal increase in the average royalty rate paid. The year over year decrease in the royalties per boe reflect the new royalty rates in Alberta, applicable to oil production. Effective January 01, 2011 the oil royalty rates were revised to a maximum of 40% from the 50% paid during fiscal 2010.

Oil and Gas Production Expenses
  Three months ended
September 30
Nine months ended
September 30
$ 2011   2010   %
Change
  2011   2010   %
Change
                       
Operating expenses 892,711   460,564   94   2,593,575   1,523,303   70
Operating expenses ($/boe) 9.31   5.86   59   9.62   6.68   44

Operating expenses in the third quarter of 2011 increased 94 percent from the same period in 2010, primarily as a result of; 1) increases in operator costs, reflective of increased production operations, 2) increased equipment rentals associated with the rental of a second compressor, costs which will be eliminated with the installation of the electric drive compressor in the first quarter of 2012, 3) increases in costs associated with chemicals and treating, reflective of increased production operations, 4) increased fuel and power costs as a result of the rental of the second compressor, costs which will be significantly reduced with the installation of the electric drive compressor in the first quarter of 2012, 5) increases in costs associated with trucking, reflective of increased production operations, 6) increased road & lease maintenance costs as a result of the significant rainfall during the months of June and July in the Mitsue, Alberta area, and 7) increases in costs associated with equipment maintenance, reflective of increased production operations.  On a per boe basis, operating costs increased 59 percent, to $9.31 per boe due the previous items listed.

For the reasons stated above, the operating expenses for the nine months ended September 30, 2011 increased 70 percent from the same period in 2010, and on a per boe basis, operating costs increased 44 percent, to $9.62. Management is confident that as production increases during the remaining three months of 2011, and with the installation of the electric drive compressor at the Company's Mitsue battery, the per boe cost of operations will return to historical levels.

Operating Netback

Exall realized the following netbacks from oil and gas operations:
  Three months ended
September 30
Nine months ended
September 30
Netback per boe (6:1) $ 2011   2010   %
Change
  2011   2010   %
Change
                       
Production revenue 83.32   66.02   26   84.11   68.70   22
Royalties 21.19   15.71   35   23.23   24.05   (3)
Operating expenses 9.31   5.86   59   9.62   6.68   44
Operating netbacks ($/boe) 52.82   44.45   19   51.26   37.97   35

Operating netbacks in the third quarter of 2011 increased 19 percent to $52.82 per boe compared to the third quarter 2010 operating netbacks of $44.45 per boe. This is primarily the result of the overall commodity price improvement of 26 percent on a third quarter over third quarter basis.

On a nine month period over nine month basis, 2011 operating netbacks increased by 35 percent to $51.26 per boe. This is primarily the result of two factors, 1) overall commodity prices improved 26 percent on a period over period basis, and 2) royalty rates have improved 20 percent reflecting; a) the new royalty rates in Alberta, applicable to oil production, which, effective January 01, 2011, were revised to a maximum of 40% from the 50%, and b) a significant portion of the Company's production was from wells which were producing under the New Oil Well Production period and as such were paying a 5% royalty rate.

Depletion, Depreciation and Amortization ("DD&A")
  Three months ended
September 30
Nine months ended
September 30
$ 2011   2010   %
Change
  2011   2010   %
Change
                       
Depletion & Depreciation 2,005,955   1,074,978   87   4,971,623   3,184,315   56
Amortization 3,238   2,613   24   9,713   7,764   25
Total 2,009,193   1,077,591   86   4,981,336   3,192,079   56
DD&A ($/boe) 20.81   13.87   50   18.31   14.19   29

Depletion is calculated using the unit-of-production method based on total estimated proved plus probable reserves.  DD&A for the third quarter of 2011 was $2,009,193 compared to $1,077,591 for the same period in 2010. DD&A in for the first nine months of 2011 was $4,981,336 or $18.31 per boe compared to $3,192,079 or $14.19 per boe for the same period in 2010. DD&A expense per boe in 2011 has increased from 2010; a result of continued successful drilling operations at Marten Mountain, Alberta. It is this continued drilling success which management believes will lead to increased reserve assignments by the Company's third party Reserve Engineers at year end resulting in DD&A per boe rates being reduced to more historical levels. As at September 30, 2011, the Company recorded a $8,082 impairment against its United States properties at Harris County.

Administration Expenses
  Three months ended
September 30
Nine months ended
September 30
$ 2011   2010   %
Change
  2011   2010   %
Change
                       
Administration, gross 485,395   521,681   (7)   1,805,359   1,604,182   12
Overhead recoveries (244,454)   (134,134)   82   (562,244)   (283,317)   (98)
Administration, net 240,941   387,847   (38)   1,243,115   1,320,865   (6)
Administration ($/boe) 2.51   4.93   (49)   4.61   5.79   (20)

General and administration costs represent the costs required to effectively operate a public company. The increase in costs from 2010 reflect the increased cost of staffing commitments made in conjunction with the increased production and capital expenditures in 2010 and 2011 as Exall continues to achieve positive results with regard to its drilling program in the Marten Mountain, Mitsue area.

General and administration expenses per boe in 2011 have decreased 49 percent from 2010 on a quarter over quarter basis, as a result of the 23 percent increase in production combined with the 7 percent decrease in gross administrative costs and the 82 percent increase in overhead recoveries as a result of the increased capital expenditures in the third quarter of 2011 as compared to 2010.  General and administration expenses per boe in 2011 have declined 21 percent from 2010, on a year over year basis due to increased overhead recoveries as a result of the increased capital expenditures in 2011 and as a result of the increased production, a result of continued successful drilling operations at Marten Mountain, Alberta.  Management is continually monitoring general and administrative expenses to ensure that they are being managed effectively and efficiently.

Share Based Payment Expense
    Three months ended
September 30
Nine months ended
September 30
$   2011   2010   %
Change
  2011   2010   %
Change
                         
Stock-based compensation   506,615   252,434   101   770,292   530,084   45
SBC ($/boe)   5.28   3.25   62   2.86   2.36   21

The share based payment expense represents the expense for options granted and are recorded over the vesting period of the options. Additional unamortized stock-based compensation costs will be charged to income over the remaining vesting period of the options outstanding as well as any additional options that may be granted in the future.  See note 9 of the September 30, 2011 interim financial statements for additional details on the options granted and outstanding.

Exall recorded $506,615 or $5.28 per boe of non-cash, stock based compensation expense for the three months ended September 30, 2011 and $770,292 or $2.86 per boe for the first nine months of 2011. In comparison, Exall recorded $252,434 or $3.25 per boe of non-cash, stock based compensation expense for the three months ended September 30, 2010 and $530,084 or $2.36 per boe for the first nine months of 2010.

Financing Costs
    Three months ended
September 30
Nine months ended
September 30
$   2011   2010   %
Change
  2011   2010   %
Change
                         
Accretion expense   6,937   4,518   54   25,388   21,062   21
Interest   155,958   160,219   (3)   375,365   413,671   (9)
    162,895   164,737   (1)   400,753   434,733   (8)
Interest ($/boe)   1.69   2.12   (20)   1.47   1.93   (24)

Financing costs represent the costs required to effectively finance the capital program of Exall. Exall recorded $375,365 or $1.38 per boe of interest expense for the nine months ended September 30, 2011. In comparison, Exall recorded $413,671 or $1.84 per boe of interest expense for the nine months ended September 30, 2010. The decrease in interest expenses from 2010 are directly attributable to financing completed by the Corporation on February 1, 2011 and the increased cash flow from operations in 2011 as compared to 2010.

Additionally, Exall recorded $25,388 or $0.09 per boe of accretion expense for the nine months ended September 30, 2011. In comparison, Exall recorded $21,062 or $0.09 per boe of accretion expense for the nine months ended September 30, 2010.

Other Income
  Three months ended
December 31
Year ended
December 31
$ 2010   2009   %
Change
  2010   2009   %
Change
                       
Other income -   890,854   -   -   1,313,072   -
Other income ($/boe) -   11.46   -   -   5.84   -

During fiscal 2010, Exall acquired net third party Alberta Drilling Royalty Credits ("DRC's") amounting to a gain of $1,313,072 which were recovered from crown royalties paid during the year. These DRC's were part of the Alberta Drilling Royalty Credit Program which was implemented to encourage resource drilling in the province.

Net Earnings and Funds from Operations
    Three months ended
September 30
Nine months ended
September 30
$   2011   2010   2011   2010
                 
Net earnings   1,474,145   1,748,834   4,688,679   3,132,433
Basic per share   0.02   0.03   0.08   0.06
Diluted per share   0.02   0.03   0.07   0.06
                 
Funds from operations   4,714,519   3,842,705   12,377,589   8,246,497
Basic per share   0.08   0.07   0.20   0.16
Diluted per share   0.07   0.07   0.20   0.16

Liquidity and Capital Resources

Exall has a revolving demand credit facility with a Canadian chartered bank for $27.0 million that bears interest at the lender's base prime rate plus 1.50 percent which is reviewed periodically by the bank. At September 30, 2011, the Company had approximately $19.6 million outstanding on its revolving credit facility and an approximate working capital deficit, excluding bank indebtedness, of $4.6 million for total net debt of approximately $24.2 million.

During the three and nine month periods ended September 30, 2011, the Company used funds received through its February 2011 brokered private placement and cash flow from operations to fund capital expenditures and other financial requirements.  In 2011, the Company's capital expenditures will be limited by the cash flow available from operations, additional debt or equity as market conditions may allow and potential asset sales if the Company so chooses.

On February 01, 2011, Exall announced that it had closed a bought deal special warrant private placement, whereby Exall issued an aggregate of 5,750,000 special warrants at a price of CDN$2.00 per Special Warrant for aggregate gross proceeds of $11,500,000. The aggregate number of Special Warrants included 750,000 Special Warrants issued pursuant to the exercise in full of the option granted to the Underwriters' under the Offering. Each Special Warrant entitled the holder thereof to receive one common share of the Company on the exercise or deemed exercise of the Special Warrants.  Effective February 2, 2011, the Special Warrants were deemed to have been exercised and the Company issued an aggregate of 5,750,000 Common Shares to the Special Warrant holders.

As part of its capital management program, Exall compares its net corporate debt (the total amount of bank loan, net of working capital) to the annual, or annualized, funds from operations before changes in working capital (See Advisories - Non-GAAP Measurement - Funds Flow). Maintaining a ratio of less than 2:1 is a Company target but can be subject to significant short-term fluctuations.

                 
 
Debt to Funds From Operations Ratio(1)
 
 
 
 
Funds From
Operations
in Quarter
 
 
 
 
 
Annualized
 
 
 
Net
Corporate
Debt
 
 
 
Debt to
Funds From
Operations
                 
2010 Q1 - March 31, 2010   1,893,506   7,574,027   8,442,423   1.1
2010 Q2 - September 30, 2010   2,510,291   10,041,164   8,796,664   0.9
2010 Q3 - September 30, 2010   3,836,864   15,347,456   10,491,867   0.7
2010 Q4 - December 31, 2010   3,023,121   12,092,484   14,174,155   1.2
2011 Q1 - March 31, 2011   4,178,808   16,715,232   9,806,366   0.6
2011 Q2 - June 30, 2011   3,484,261   13,937,044   12,789,153   0.9
2011 Q3 - September 30, 2011   4,714,519   18,858,076   24,203,521   1.3

(1) See Advisories Non-GAAP Measurements - Funds From Operations

Going Concern Assessment

The consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. As at September 30, 2011, the Company had a working capital deficit, excluding bank indebtedness, of $4.6 million.

On February 01, 2011, Exall announced that it had closed a bought deal special warrant private placement, whereby Exall issued an aggregate of 5,750,000 special warrants at a price of CDN$2.00 per Special Warrant for aggregate gross proceeds of $11,500,000. The aggregate number of Special Warrants included 750,000 Special Warrants issued pursuant to the exercise in full of the option granted to the Underwriters' under the Offering. Each Special Warrant entitled the holder thereof to receive one common share of the Company on the exercise or deemed exercise of the Special Warrants. Effective February 2, 2011, the Special Warrants were deemed to have been exercised and the Company issued an aggregate of 5,750,000 Common Shares to the Special Warrant holders.

Fair Value of Financial Instruments

The Company's financial instruments as at September 30, 2011 include cash, accounts receivable, accounts payable and accrued liabilities and the bank indebtedness.  The fair value of accounts receivable, accounts payable and accrued liabilities approximate their carrying amounts due to their short terms to maturity.  The Company's bank debt bears interest at a floating market rate and accordingly the fair market value approximates the carrying value.  Additional information concerning the Company's financial instruments and related risks are in note 14 to the consolidated financial statements.

Capital Expenditures
    Three months ended
September 30
Nine months ended
September 30
$   2011   2010   %
Change
  2011   2010   %
  Change
                         
Land   2,486,407   211,347   1,076   4,436,323   564,298   686
Geological & Geophysical   128,627   7,795   1,550   1,902,709   114,491   1,562
Drilling and completions   11,607,112   3,951,524   194   24,212,324   9,806,406   147
Equipping, Tie-ins & Facilities   1,902,898   572,918   232   4,265,901   2,152,654   98
Administrative assets   8,484   -   -   8,484   3,557   139
Exploration & development expenditures   16,178,528   4,743,584   241   34,870,750   12,641,406   176
Asset retirement costs   223,566   -   -   277,841   62,624   344
Total Capital Expenditures   16,402,094   4,743,584   246   35,148,591   12,704,030   177

Oil and gas property expenditures were $16,178,044 for the third quarter of 2011.  During the third quarter of 2011 the Company participated in the drilling of 3.0 gross wells (2.1 net) in the Marten Mountain / Mitsue area. Oil and gas exploration and development expenditures were $4,743,584 for the third quarter of 2010.  During the third quarter of 2010 the Company participated in drilling of 2.0 gross wells (1.4 net), in the Marten Mountain / Mitsue area.

The Company has acquired 174,400 gross (128,249 net) acres of undeveloped land in the Mitsue area, during the three months ended September 30, 2011. As at September 30, 2011, the Company had 186,280 acres (135,688 acres net) of undeveloped land in Canada, primarily in the Marten Mountain / Mitsue area of Alberta.

Drilling Activities
  Drilled Completed Tied In Dry
Periods ended
September 30, 2011
3
Mnths
9
Mnths
3
Mnths
9
Mnths
3
Mnths
9
Mnths
3
Mnths
9
Mnths
                 
Gross 3.00 8.00 3.00 5.00 1.00 3.00 0.00 0.00
Net 2.10 5.58 2.14 3.54 0.72 2.16 0.00 0.00

About Exall

Exall is a junior oil and gas company active in its business of oil and gas exploration, development and production from its properties in Alberta, and Texas. Exall Energy is currently developing the new Mitsue area "Marten Mountain" discovery in north-central Alberta.

Exall Energy currently has 62,188,854 common shares outstanding. The Company's common shares are listed on the Toronto Stock Exchange under the trading symbol EE.

Reader Advisory

This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including those relating to results of operations and financial condition, capital spending, financing sources, commodity prices and costs of production. By their nature, forward-looking statements are subject to numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, actual results may differ materially from those predicted. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such factors include fluctuating commodity prices, capital spending and costs of production, and other factors described in the Company's most recent Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. Such forward-looking statements are made as at the date of this news release, and the Company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

For the purposes of calculating unit costs, natural gas has been converted to a barrel of oil equivalent (boe) using 6,000 cubic feet equal to one barrel (6:1), unless otherwise stated. The boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore boe may be misleading if used in isolation. This conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

 

SOURCE EXALL ENERGY CORPORATION

For further information:

Exall Energy Corporation
 
Frank S. Rebeyka
Vice Chairman
Tel: 403-815-6637

 
Roger N. Dueck
President & CEO
Tel: 403-237-7820 x 223
info@exall.com
  Warren F.E. Coles
VP - Finance & CFO
Tel: 403-237-7820 x 224
 

Please visit Exall Energy's website at: www.exall.com

Renmark Financial Communications Inc.
Maurice Dagenais: mdagenais@renmarkfinancial.com
Florence Liberski : fliberski@renmarkfinancial.com
Tel.: (514) 939-3989 or (416) 644-2020
www.renmarkfinancial.com

 

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EXALL ENERGY CORPORATION

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