Great Plains Reports Third Quarter 2007 Financial and Operational Results



    CALGARY, Nov. 13 /CNW/ - Great Plains Exploration Inc. (TSX - GPX) (Great
Plains) is pleased to announce its financial and operational results for the
three and nine months ended September 30, 2007.

    The highlights for the third quarter 2007 are as follows:

    
    Operations
    ----------
    -   Efforts were primarily directed toward securing drilling licenses,
        expanding our seismic database and identifying opportunities for our
        winter drilling program. Six wells are planned for Q4 including two
        Nisku wells at Crossfire

    -   Continued to develop prospect inventory with a primary focus on high
        impact light oil targets, while starting a new drive toward
        developing multiple uphole gas targets at Pembina

    -   Invested $2.2 million in the Company's capital expenditure program;
        drilled and completed three wells, two currently awaiting tie-in and
        completed a 3D seismic program generating light oil leads at
        Morinville

    -   Production averaged 1,030 boe/d for the quarter, lower than the prior
        period primarily due to the temporary regulatory shut-in of two wells
        at Randell plus a facility turnaround at Spirit River and production
        interruptions at Pembina. Subsequent to the quarter the EUB permitted
        full production at one Randell well with the second well expected to
        return to full production by year-end. Production is currently
        averaging 1,200 boe/d and Great Plains anticipates it will exit the
        year at 1,400 boe/d with a 65% light oil weighting

    Financial
    ---------
    -   Cash flow for the third quarter was $1.8 million ($0.04 per share)
        and $6.6 million ($0.15 per share) for the nine months ended
        September 30th. The decrease in cash flow for the third quarter
        reflects the temporary decrease in production volumes in addition to
        certain one-time general and administrative expenses that accounted
        for $3.02 per boe

    -   Net operating revenue for the third quarter was $31.84 per bbl
        including processing and other income

    -   Third quarter debt and working capital deficit was $12.1 million;
        reduced slightly over the prior period. Effective November 1, 2007,
        the Company's credit facility has increased to $28 million with a
        scheduled increase to $29 million upon receipt of the Good Production
        Practice (GPP) approval at Randell by year-end. In addition, Great
        Plains has a $14 million acquisition line providing the Company with
        financial strength

    -   Completed a $597,500 private placement to new employees issuing
        100,000 flow-through common shares at $1.125 with 538,889 issued as
        common shares at $0.90 per share

    -   Subsequent to quarter-end, Great Plains completed two strategic asset
        transactions involving the purchase of additional operated light oil
        production at Randell and the sale of non-operated gas assets at
        Spirit River for a net production gain of 135 bopd. A further
        $1.5 million in minor asset sales, representing 30 boe/d is expected
        to be finalized prior to year-end
    

    Operations Review
    -----------------
    During the third quarter, Great Plains drilled three wells; two gas
discoveries at Pembina which are now awaiting tie-in and a third well at
Garrington which was found to be uneconomic. Great Plains also brought
production on-stream from its Leduc light oil discovery in the Morinville area
and additional production from a new development well in the Nisku HH pool at
Pembina. Further 3D seismic was shot at Morinville with its interpretation
revealing four drillable Leduc light oil prospects. Great Plains continued to
focus its attention on actively licensing drilling locations, acquiring land
and evaluating existing seismic data for further locations in all of its core
areas.
    At Crossfire, licenses for the drilling of two Nisku exploration wells
are expected within the next two weeks. Great Plains and its partner are
planning to drill both wells prior to year-end, with Great Plains' working
interest set at 28% and 40% respectively for each of these wells. Great
Plains' partner has recently completed construction of a new oil battery and
pipeline which is expected to expedite tie-in for one of our locations with
production potentially on stream in the first half of 2008. If successful,
these Nisku wells average 1,000 bopd with 1 million barrels of reserves per
well. Great Plains and its partner also have plans underway to drill four
shallow gas wells in this area. The first well is currently being drilled, two
additional wells are being licensed while surface access is being negotiated
for the fourth location. It is expected that all of these wells will be
drilled during the fourth quarter. These wells have a target size between 1 to
4 Bcf with production ranging from 500 to 3,000 mcf per day, per well,
targeting stacked pay zones focusing on the Rock Creek, Glauconite and Nordegg
formations. We are continuing to develop new leads and prospects in the
general Pembina Crossfire area, both from new geological interpretation and
ongoing evaluation with our seismic database.
    At Randell, which is a winter only access area, Great Plains' anticipates
that by the end of December it will be able to immediately begin its program
of recompletions and work-overs. Great Plains also expects to drill four to
six wells as part of its 2008 capital program with the first well expected to
be spudded in late December subject to surface access. These wells will be
drilled to take advantage of the remaining royalty holiday available for new
pool exploration and will be targeting light Gilwood oil with production
capability averaging 150 boe/d. Recent acquisition activity highlighted below
has resulted in Great Plains now owning 100% working interest in the majority
of the current production base and exploratory acreage at Randell.
    At Puskwa, in the Peace River Arch, Great Plains and its partner are
following up on a Q2 oil discovery which is not yet on production. Great
Plains expects it will participate in the drilling of two wells (10% working
interest), targeting Beaverhill Lake light oil with multi-zone potential prior
to year-end. Competitor activity and announcements regarding the Puskwa area
have revealed some very prolific light oil successes which have tested at
rates as a high as 5,000 boe/d.
    Subsequent to the quarter Great Plains entered into two separate
agreements; the first to purchase additional light oil assets at Randell for
$8.25 MM ($34,091/bbl, net of land) and the second to sell its gas weighted
property at Spirit River for $5.05 million ($59,412/boe). The Randell purchase
included approximately 220 bbls/d of light oil production, 388 mbbls (P & P)
of reserves, recently upgraded facilities and 7,352 net acres of undeveloped
land independently valued at approximately $750,000. At Spirit River the
Company sold 85 boe/d of production, 189 mbbls (P & P) of reserves and a land
base that Great Plains considered to be fully developed. These transactions
increased Great Plains' oil weighting to 65% and increased the volume of
assets under the Company's control as operator. Great Plains anticipates that
operating costs will be positively impacted by these agreements as Randell has
an average cost of under $10/boe and Spirit River had costs of over $20/boe.

    Outlook
    -------
    The Company is currently reviewing the recent royalty regime changes as
proposed by the Alberta government and believes that these adjustments, if
enacted, will be particularly onerous on junior companies that are engaged in
high impact oil exploration. Great Plains is carefully analyzing the impact
these changes would have on our new prospects and the Company's future
direction. It is important to note that these royalty adjustments are not yet
finalized and based on recent statements from government officials, some
potential exists for improvement in the proposed royalty burden. Indeed the
October 25, 2007 report by the government of Alberta refers to adjustments
which may be made to ensure there are not unintended consequences to its
decisions.
    Great Plains has recently been involved in a series of meetings with a
group of primarily junior explorers all of whom have built their business
plans around the pursuit of high quality conventional light oil. These parties
have all been negatively impacted in terms of share price declines as a direct
result of the perceived detrimental effect which the royalty changes would
have on high volume, higher risk exploration programs. As a group, we are
developing clear cases to illustrate the potential damage to our companies so
that we can demonstrate the magnitude of these "unintended consequences". We
will then forward alternative recommendations to the government which are
intended to mitigate the potential damage which would be inflicted upon future
exploration programs if the current proposals are enacted into legislation.
    Great Plains' management remains optimistic about the long-term outlook
for commodity prices, however in the short-term, the Company has locked in
pricing on approximately 50% of its production base to mitigate risk on
available cash flow for capital expenditures in 2008. Great Plains will
continue to maintain an evenhanded approach to its business and pursue the
Company's corporate objectives - to balance its growth, acquire wisely and
drill and explore.

    On behalf of the Board of Directors,
    "Signed"
    Stephen P. Gibson
    President and CEO
    November 13, 2007

    Investors should note that boes may be misleading, particularly if used
in isolation. A boe conversion rate of 6 Mcf: 1bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.

    Advisory Regarding Forward Looking Statements

    This press release contains forward-looking statements which include, but
are not limited to: operations plans and outlook, expectations, opinions,
forecasts, projections, guidance or other statements that are not statements
of fact. Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it cannot give any assurance that
such expectations will prove to be correct. Results of the Company may be
affected by a variety of variables and risks associated with oil and gas
exploration, production and transportation, such as loss of market, volatility
of oil and gas prices, currency fluctuations, imprecision of reserve
estimates, environmental risks, competition from other producers, ability to
access sufficient debt and equity capital from internal and external sources,
ability to replace and expand oil and gas reserves, ability to generate
sufficient cash flow from operations to meet its current and future
obligations, and risks associated with existing and potential future lawsuits
and regulatory actions made against the Company; as a consequence, actual
results could differ materially from those anticipated or implied in the
forward-looking statements.
    The Company's forward-looking statements are expressly qualified in their
entirety by this cautionary statement and are made as of the date of this new
release. Unless otherwise required by applicable securities laws, the Company
does not intend nor does it undertake any obligation to update or review any
forward-looking statements to reflect subsequent information, event, results
or circumstances or otherwise.

    
    FINANCIAL & OPERATIONAL HIGHLIGHTS

    -------------------------------------------------------------------------
    ($000s except per unit amounts)      Three     Three                Nine
                                        Months    Months              Months
                                         Ended     Ended               Ended
                                       Sept 30   June 30         %   Sept 30
                                          2007      2007    Change      2007
    -------------------------------------------------------------------------

    Oil and gas sales                    5,064     7,063       (28)   18,374
    Cash flow                            1,812     3,085       (41)    6,559
      Per share (basic)                   0.04      0.06       (33)     0.14
    Net loss                            (1,353)     (256)      429    (2,823)
      Per share (basic and diluted)      (0.03)    (0.01)      200     (0.06)
    Capital expenditures, net of
     dispositions                        2,227    (2,040)      n/a    15,088
    Bank debt and working capital
     deficit                            12,105    12,378        (2)   12,105
    Common shares outstand.
     (000s) basic                       48,264    47,625         1    48,264
    -------------------------------------------------------------------------

    Production
      Crude oil (bbls/d)                   415       615       (33)      514
      NGLs (bbls/d)                         38        45       (16)       45
      Natural gas (mcf/d)                3,460     4,196       (18)    3,965
    -------------------------------------------------------------------------
      Total (boe/d)                      1,030     1,359       (24)    1,219

    Realizations
      Crude oil ($/bbl)                  79.84     69.61        15     70.54
      NGLs ($/bbl)                       40.61     59.51       (32)    59.01
      Natural gas ($/mcf)                 5.89      7.66       (23)     7.17
    -------------------------------------------------------------------------
      Average ($/boe)                    53.47     57.11        (6)    55.20

    Netbacks ($/boe)
      Oil and gas sales                  53.47     57.11        (6)    55.20
      Royalties, net of ARTC             (8.56)    (8.69)       (1)    (9.30)
      Operating costs                   (14.69)   (15.22)       (3)   (15.15)
      Transportation                     (1.65)    (1.01)       63     (1.23)
      Asset retirement expenditures      (0.33)    (1.35)      (76)    (1.80)
    -------------------------------------------------------------------------
      Operating netback                  28.24     30.84        (8)    27.72
      Processing and other income         3.70      1.95        90      1.82
      General and administrative        (10.56)    (5.72)       85     (8.07)
      Interest                           (2.59)    (1.61)       61     (1.65)
      Current taxes (recovery)            0.35     (0.51)      n/a     (0.09)
    -------------------------------------------------------------------------
      Cash flow netback                  19.14     24.94       (23)    19.73
    -------------------------------------------------------------------------


                     MANAGEMENT'S DISCUSSION AND ANALYSIS
    

    The following Management's Discussion and Analysis ("MD&A") of financial
results as provided by the management of Great Plains Exploration Inc. ("Great
Plains" or the "Corporation") should be read in conjunction with the unaudited
interim financial statements and selected notes for the three and nine month
periods ended September 30, 2007 and 2006 and the audited consolidated
financial statements and MD&A for the years ended December 31, 2006 and 2005.
This commentary is based on information available as at November 12, 2007.
    The following information has been prepared by management in accordance
with Canadian generally accepted accounting principles ("GAAP"). All financial
results are reported in Canadian dollars and production and reserve numbers
are stated before crown or lessor royalties. Natural gas reserves and volumes
are converted to barrels of oil equivalent (boe) on the basis of six thousand
cubic feet (mcf) of gas to one barrel (bbl) of oil. Included in the MD&A are
references to terms commonly used in the oil and gas industry such as cash
flow and cash flow per share. Cash flow as used in this report represents cash
flow from operating activities before changes in non-cash working capital. The
Corporation believes that cash flow represents an indicator of the
Corporation's performance. The Corporation also discloses cash flow per share,
where cash flow is divided by the weighted average number of common shares
outstanding. These terms are not defined by Canadian GAAP and therefore are
referred to as non-GAAP measures and therefore may not be comparable with the
calculation of similar measures for other companies.

    The information contained herein contains forward-looking statements and
assumptions, such as those relating to the 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. Readers are cautioned that the assumptions used in the
preparation of such information, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance should not
be placed on forward-looking statements.

    Great Plains Exploration Inc. is a Canadian-based company whose common
shares are traded on The Toronto Stock Exchange (TSX) under the symbol "GPX".
Additional information relating to the Corporation can be found on the SEDAR
website at www.sedar.com or on the Corporation's website at
www.greatplainsexp.com.

    Disclosure Controls

    Disclosure controls and procedures are designed to provide reasonable
assurance that all relevant information is gathered and reported on a timely
basis to senior management, so that appropriate decisions can be made
regarding public disclosure. As at the end of the period covered by this MD&A,
management evaluated the effectiveness of the Corporation's disclosure
controls and procedures as required by Canadian securities laws.
    Based on that evaluation, management has concluded that, as of the end of
the period covered by this MD&A, the disclosure controls and procedures,
subject to certain limitations indicated below, were effective to provide
reasonable assurance that information required to be disclosed in the
Corporation's annual filings and interim filings (as such terms are defined
under Multilateral Instrument 52-109 - Certification of Disclosure in Issuers'
Annual and Interim Filings) and other reports filed or submitted under
Canadian securities laws is recorded, processed, summarized and reported
within the time periods specified by those laws, and that material information
is accumulated and communicated to management as appropriate to allow timely
decisions regarding required disclosure.

    Internal Controls Over Financial Reporting

    The Chief Executive Officer and the Chief Financial Officer of
Great Plains are responsible for designing a system of internal controls over
financial reporting, or causing them to be designed under their supervision,
in order to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
reporting purposes in accordance with Canadian generally accepted accounting
principles.
    We have designed and implemented a system of internal controls over
financial reporting which we believe is effective for a company of our size.
During the review of the design of the Corporation's control system over
financial reporting it was noted that due to the limited number of staff at
Great Plains, there is an inherent weakness in the system of internal controls
due to our inability to achieve appropriate segregation of duties. The limited
number of staff may also result in weaknesses with respect to accounting for
complex and non-routine transactions due to a lack of technical resources, and
weaknesses in controls governing our computer systems and applications within
the Corporation. While management of Great Plains has put in place certain
procedures to mitigate the risk of a material misstatement in the
Corporation's financial reporting, there is no assurance that this risk can be
reduced to less than a remote likelihood of a material misstatement.

    Corporate Vision, Core Businesses and Strategy

    Great Plains is an oil and gas company engaged in the exploration for,
and development and production of, oil and natural gas in Western Canada.
Great Plains was formed through the division of Eurogas Corporation under a
Plan of Arrangement dated April 5, 2004. The Corporation focuses on the
Western Canadian Sedimentary Basin and intends to pursue a strategy of growth
through corporate acquisitions and value creation from full-cycle exploration.

    Subsequent Event

    Subsequent to September 30, 2007 the Corporation entered into an
agreement to purchase additional properties containing light oil production of
approximately 220 boe per day for $8.25 million.
    The Corporation also disposed of certain properties for $5.05 million
which had primarily gas production of approximately 85 boe per day during
September. As the change in depletion rate is less than 20 percent, no gain or
loss on disposition will be recognized on this disposition.
    As a result of the above transactions the Corporation's revolving demand
credit facility authorized borrowing amount was increased to $28 million with
a further increase to $29 million due upon receipt of regulatory approval to
increase production at a specific property. It is anticipated that regulatory
approval will be received by January 2008.

    Production

    For the three and nine month periods ended September 30, 2007, production
volumes averaged 1,030 and 1,219 boe per day, compared to 1,455 and 1,545 boe
per day average in the same periods in 2006 (a 29 and 21 percent decrease,
respectively).

    
    -------------------------------------------------------------------------
                                                 For the
                                                   three
                                 For the three    months        For the nine
                                  months ended     ended        months ended
                                  September 30   June 30        September 30
    -------------------------------------------------------------------------
                                2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Oil (bbls/d)                 415       455       615       514       476
    NGLs (bbls/d)                 38        86        45        45        81
    Natural Gas (mcf/d)        3,460     5,485     4,196     3,965     5,928
    -------------------------------------------------------------------------
    boe/d (6:1)                1,030     1,455     1,359     1,219     1,545
    -------------------------------------------------------------------------
    % natural gas production      56        63        51        54        64
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Crude oil and natural gas liquids sales volumes averaged 453 bbls/d for
the three month period ended September 30, 2007, a 16 percent decrease over
the 541 bbls/d for the same period in 2006 and a decrease of 31 percent over
the three months ended June 30, 2007. The decreased volumes from the second
quarter were due to a regulator imposed production decrease at two wells
located at Randell that reduced daily production by approximately 150 bbl/d.
Subsequent to September 30 the regulator permitted full production at one
well. It is expected that the second well will return to full production by
January 2008. There was also a bottom hole pump replacement required at one
well at Pembina resulting in reduced daily oil production of approximately
50 bbl/d for September. Additional production did commence during the third
quarter at Morinville with the 1-30 well coming on stream at 25 bbl/d.
    Natural gas sales volumes averaged 3,460 mcf/d during the three months
ended September 30, 2007 compared to 5,485 mcf/d for the same period of 2006,
a 37 percent decrease, due to disposition of several properties representing
1,037 mcf/d that was undertaken during the past twelve months ended
September 30, 2007, and the expected natural decline rate of 22 percent. At
Spirit River, as well as natural declines, a turnaround at a facility reduced
daily production by approximately 55 boe/d for September. The natural declines
continued from June 30 to September 30, 2007 and the Corporation has focused
its exploration and development activity on increasing its oil producing
properties.
    Subsequent to the period end, the Corporation also purchased additional
daily production of approximately 220 bbl at the Randell location in
October, 2007 and sold its interests in Spirit River.

    
    Commodity Pricing

    -------------------------------------------------------------------------
                                                 For the
                                                   three
                                 For the three    months        For the nine
                                  months ended     ended        months ended
                                  September 30   June 30        September 30
    -------------------------------------------------------------------------
                                2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Oil ($/bbl)                79.84     76.65     69.61     70.54     72.21
    NGLs ($/bbl)               40.61     65.39     59.51     59.01     62.88
    Natural Gas ($/mcf)         5.89      6.13      7.66      7.17      6.83
    -------------------------------------------------------------------------
    $/boe                      53.47     50.95     57.11     55.20     51.76
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Prices for the three month period ended September 30, 2007, increased by
5 percent on an average $/boe basis over the comparable period in 2006. Oil
was 4 percent higher, NGLs were 38 percent lower and natural gas prices were
4 percent lower. The resulting increased price per boe for 2007 as compared to
2006 is due to oil volumes representing a greater component of total
production. All petroleum products are sold to Canadian marketers at spot
reference prices based on US$ WTI for oil and Cdn$ AECO for natural gas.
Noting industry inventory levels, volatile world oil prices and downward
pressures on the natural gas prices during the current quarter, Great Plains
entered into several financial contracts to ensure cash flow protection. As at
September 30th approximately 57% of the natural gas production was protected
by financial contracts through to March, 2008 with the lowest floor price
being $6.50/GJ. Furthermore, one contract for 2,000 GJ/day extends to
December 31, 2008 with a floor price of $6.50/GJ. All of the oil production is
protected by financial contracts, consisting of swaps on 250 bbl/d for the
balance of 2007 at an average price of $US69.65/bbl and a costless collar on
200 bbl/d through to June 30, 2008, with a floor price of US$72.50/bbl and a
cap of US$83.00/bbl. Subsequent to September 30, 2007, the Corporation entered
into another costless collar with a floor of US$75.00 bbl and a cap of
US$89.80 bbl on 100 bbl/d for November 1, 2007 to June 30, 2008.

    
    Oil and Gas Sales

    -------------------------------------------------------------------------
                                           For the
                      For the three          three            For the nine
                       months ended         months            months ended
                       September 30     ended June            September 30
                   2007          2006     30, 2007         2007         2006
    -------------------------------------------------------------------------
               $000    %    $000    %    $000    %    $000    %    $000    %
    -------------------------------------------------------------------------
    Oil       3,047   60   3,206   47   3,894   55   9,889   54   9,398   43
    NGLs        191    4     519    8     243    3     725    4   1,381    6

    Natural
     Gas      1,826   36   3,095   45   2,926   42   7,760   42  11,046   51
    -------------------------------------------------------------------------
    Total     5,064  100   6,820  100   7,063  100  18,374  100  21,825  100
    -------------------------------------------------------------------------
    

    Oil and gas sales for third quarter of 2007 were $5.1 million as compared
to $6.8 million for the same period in 2006 due to lower volumes for oil,
which were partially offset by higher oil prices, as well as lower volumes and
prices for natural gas and natural gas liquids. The changes in relative
production in the current price environment have resulted in an increase in
the oil weighting from 47% to 60% of the Corporation's revenue from 2006 to
2007.

    
    Royalties

    -------------------------------------------------------------------------
                                                 For the
                                                   three
                                 For the three    months        For the nine
                                  months ended     ended        months ended
                                  September 30   June 30        September 30
    $000s                       2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Crown royalties              639       994       899     2,524     3,604
    Other                        172       325       185       582     1,128
    Alberta Royalty Tax
     Credit                        -      (125)       (9)       (9)     (367)
    -------------------------------------------------------------------------
    Total                        811     1,194     1,075     3,097     4,365
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                 For the
                                                   three
                                 For the three    months        For the nine
                                  months ended     ended        months ended
                                  September 30   June 30        September 30
    % of sales                  2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Crown royalties               13        15        13        14        17
    Other                          3         5         3         3         5
    Alberta Royalty Tax
     Credit                        -        (2)        -         -        (2)
    -------------------------------------------------------------------------
    Total                         16        18        16        17        20
    -------------------------------------------------------------------------
    

    For the nine month period ended September 30, 2007, total royalties were
$3.1 million, representing a decrease of 29 percent from the $4.4 million
incurred in 2006. As a percentage of sales, total royalty expense decreased to
16 percent in the third quarter of 2007 compared to 18 percent in 2006. The
reduction in royalties as a percentage of sales is primarily due to continued
movement towards oil production. The Corporation's oil properties are usually
subject to a lower Crown royalty rate, and the new oil production at Randell
(which represents 13% of production) is subject to a one year royalty holiday.
For the current year the Corporation is also receiving higher gas cost
allowances that reduce the effective Crown royalty rate for gas. The Alberta
Royalty Tax Credit was discontinued effective January 1, 2007, with any 2007
amounts being due to adjustments of prior year claims.
    On October 25, 2007 the Province of Alberta announced a framework to
increase royalty rates entitled the New Royalty Framework ("NRF"). The NRF is
to be effective January 1, 2009. Under the NRF, Crown royalties payable for
crude oil will be set by a single sliding rate formula containing separate
components that account for oil price and well production. Maximum royalty
rates for crude oil are to increase from 35 percent to 50 percent of a
reference price. Royalty exemptions, such as those the Corporation receives
for its Randell wells during the first year of the well's operation, will be
eliminated. Crown royalties payable for natural gas will be set by a formula
sensitive to price and production volume. Natural gas royalty rates, currently
5 percent to 35 percent, are to range from 5 percent to 50 percent of a
reference price. If enacted as proposed, the NRF may increase the
Corporation's royalty commencing in 2009.

    
    Processing and Other Income

                                                 For the
                                                   three
                                 For the three    months        For the nine
                                  months ended     ended        months ended
                                  September 30   June 30        September 30
    ($000s)                     2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Processing                   174       188        68       353       361
    Unrealized gain on
     financial instruments        90         -       341       431         -
    Other                        176       184        67       253       201
    -------------------------------------------------------------------------
    Total                        440       372       476     1,037       562
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Processing income for the three and nine month periods ended
September 30, 2007 was $173 thousand and $353 thousand ($1.83 and $1.06 per
boe respectively), compared to $188 thousand and $361 thousand ($1.40 and
$0.86 per boe respectively) in the same periods of 2006. Other income has
increased significantly in the last year primarily due to the mark to market
adjustment and settlement amounts on the Corporation's financial contracts.

    
    Operating Expenses and Transportation Costs

                                              For the
                                                three
                        For the three months   months    For the nine months
                          ended September 30    ended     ended September 30
                                           %  June 30                      %
                          2007   2006  Change    2007     2007   2006  Change
    -------------------------------------------------------------------------
    Operating expenses
     ($000)              1,391    1,909  (27)   1,882    5,045    4,622    9
    Less: Processing
     expenses ($000)       (47)     (31)  50      (51)    (124)     (98)  27
    -------------------------------------------------------------------------
    Production expenses
     ($000)              1,345    1,878  (28)   1,831    4,921    4,524    9
    Production expenses
     ($/boe)             14.20    14.03    1    14.81    14.78    10.73   38
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Transportation
     costs ($000)          157      151    4      126      411      388    6
    Transportation
     costs ($/boe)        1.65     1.13   46     1.01     1.23     0.92   34
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Production expenses for the three and nine month periods ended
September 30, 2007, were $1.35 million and $4.92 million, compared with
$1.88 million and $4.52 million for the same period in 2006. Processing costs
for three and nine months ended September 30, 2007 were $47 thousand and
$124 thousand ($0.49 and $0.37 per boe respectively) compared to $31 thousand
and $98 thousand ($0.23 per boe for both periods) for the same periods in
2006. The processing costs relate to a battery located at Pembina for which
the Corporation earns processing revenues.
    Optimizations were undertaken at Randell during the first quarter of 2007
to reduce Randell's operating costs. The positive impact from these
optimizations was restricted by the impact of the regulator imposed production
reduction, which meant the area's fixed operating costs were applied over a
lower production base. Without the regulatory restriction, the production
expenses would have been approximately $13.13 per boe for the most recent
quarter. The turnaround and relatively high declines at Spirit River also
resulted in fixed operating costs being applied over a smaller production
base. The bottom hole pump repair at Pembina in September resulted in
additional costs and reduced production while the repairs were performed.
    The subsequent sale of the Spirit River interests and purchase of
additional interest in Randell (approximately doubling the Corporation's
interest in this area) is expected to further reduce the corporate operating
costs per boe in the coming months.
    Transportation costs totalled $157 thousand and $411 thousand ($1.65 and
$1.23 per boe respectively) for the three and nine month periods ended
September 30, 2007, compared with $151 thousand and $388 thousand ($1.13 and
$0.92 per boe respectively) for the same period in 2006. The increased expense
for 2007 is due to a payment made in resolution of a dispute with an industry
partner for prior period transportation costs.

    
    General & Administrative Expenses and Stock Based Compensation

    -------------------------------------------------------------------------
                                              For the
                                                three
                        For the three months   months    For the nine months
                          ended September 30    ended     ended September 30
                                           %  June 30                      %
    $000s                 2007   2006  Change    2007     2007   2006  Change
    -------------------------------------------------------------------------
    Gross costs          1,297    1,245    4    1,019    3,737    2,798   34
    Capitalized           (296)    (376) (21)    (312)  (1,049)    (891)  18
    -------------------------------------------------------------------------
    Net Costs            1,001      869   15      707    2,688    1,907   41
    -------------------------------------------------------------------------

    Stock based
     compensation          599      205  192       77      773      805   (4)
    -------------------------------------------------------------------------
    $/boe                16.89     8.02  111     6.34    10.40     6.42   62
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    General and administrative costs (net of capitalization) averaged
$10.56 per boe for the three months ended September 30, 2007, an increase of
85 percent from the $5.72 per boe incurred during the three month period ended
June 30, 2007, and a 63 percent increase when compared to $6.49 per boe during
the third quarter of 2006. While overhead costs in dollar terms have not
changed dramatically, the reduced production in the current quarter has had a
significant impact in the cost per boe. Included in the current quarter costs
are restructuring costs of $286 thousand that were incurred related to staff
changes. The impact of these one-time costs was to increase general and
administrative costs by $3.02 per boe.
    Stock based compensation of $599 thousand was expensed for the three
month period ended September 30, 2007 compared to $205 thousand for the three
months ended September 30, 2006. In addition stock based compensation of
$145 thousand has been capitalized for the three months ended September 30,
2007 as compared to capitalized amounts of $80 thousand for the three months
ended September 30, 2006. The increased expense for the three months ended
September 30, 2007 as compared to the three months ended September 30, 2006 is
due to the granting of stock options for certain employees during the current
quarter. One-third of these stock options grants vest immediately resulting in
a large expense. Compensation expense is based on the estimated fair value of
the options on the grant date in accordance with the fair value method of
accounting for stock based compensation.

    
    Interest Expense

    -------------------------------------------------------------------------
                                              For the
                                                three
                        For the three months   months    For the nine months
                          ended September 30    ended     ended September 30
                                           %  June 30                      %
    $000s                 2007   2006   Change   2007     2007   2006  Change
    -------------------------------------------------------------------------
    Interest expense       244      356  (31)     200      550    1,031  (47)
    -------------------------------------------------------------------------
    $/boe                 2.59     2.66   (3)    1.61     1.65    2.45   (33)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Interest expense for the three month period ended September 30, 2007, was
$244 thousand ($2.59 per boe) compared to $356 thousand ($2.95 per boe) for
the third quarter in 2006. The decreased interest expense is due to less
reliance on the Corporation's credit facilities due to proceeds received from
the November, 2006 and March, 2007 share issuances that have been used to fund
2007 capital activities. Also the Corporation fully expended its obligations
with respect to the November, 2006 flow through share issuance by March 31,
2007. This resulted in a lower flow through share interest charge compared to
the period ended September 30, 2006 when there was a remaining flow through
share obligation of $2.6 million relating to a December, 2005 flow through
share issuance. During the nine months ended September 30, 2007 the
Corporation recorded $20 thousand for estimated flow through share interest
arising from an audit of the flow through share claims of a predecessor
corporation, Rock Creek Resources Ltd.

    
    Depletion, Depreciation and Accretion

    -------------------------------------------------------------------------
                                              For the
                                                three
                        For the three months   months    For the nine months
                          ended September 30    ended     ended September 30
                                           %  June 30                      %
    $000s                 2007   2006  Change    2007     2007   2006  Change
    -------------------------------------------------------------------------
    Depletion,
     depreciation and
     accretion expense   3,010    3,645  (17)   3,830   10,566   11,268   (6)
    -------------------------------------------------------------------------
    $/boe                31.79    27.23   17    30.97    31.74    26.72   19
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Depletion, depreciation and accretion expense has decreased to
$3.0 million from $3.6 million for the three month period ended September 30,
2007 compared to the same period in 2006, as a result of lower production
levels. The increased expense on a per boe basis reflects (i) an aggressive
capital program that commenced in late 2006 and continued into 2007, which has
resulted in significant facilities' costs being incurred which have no
reserves associated with them in the depletion calculation and (ii) reserve
additions from the third quarter 2007 drilling activity not yet being
determined.

    Taxes

    A current income tax recovery of $33,000 was recorded by the Corporation
for the three month period ended September 30, 2007, compared to a nil
provision during the same period of 2006. The current period income tax
provision consists of estimated additional tax, interest, and penalties of
$23,000 arising from an income tax audit of a predecessor corporation, Rock
Creek Resources Ltd, and a provision of $10,000 relating to Saskatchewan
capital taxes and related interest charges.
    A future income tax recovery of $322,000 was recorded for the three month
period ended September 30, 2007, compared to a future income tax recovery of
$300,000 for the same period in 2006.
    Great Plains and its subsidiaries have combined tax pools of
approximately $54.9 million of which $5.4 million is available for deduction
against Alberta income only.

    Cash Flow

    Cash flow for the three month period ended September 30, 2007, totalled
$1.8 million ($0.04 per basic and diluted share). For the three month period
ended September 30, 2006, cash flow was $2.7 million ($0.07 per basic and
diluted share) and it was $3.1 million ($0.06 per basic and diluted share) for
the second quarter of 2007.
    Cash flow totalled $19.14 per boe for the three month period ended
September 30, 2007, a reduction from the $20.03 per boe recorded for the same
period in 2006. Cash flow was $24.94 per boe for the second quarter of 2007.
The third quarter 2007 cashflow reflects the impact of reduced production due
to regulator imposed reductions and temporary production curtailments due to
repairs, as well as certain restructuring costs recorded as part of general
and administrative expenses.

    
                                                 For the
                                                   three
                                 For the three    months        For the nine
                                  months ended     ended        months ended
                                  September 30   June 30        September 30
    $/boe                       2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Oil and gas sales          53.47     50.95     57.11     55.20     51.76
    Royalties, net of ARTC     (8.56)    (8.92)    (8.69)    (9.30)   (10.35)
    Operating costs           (14.69)   (14.77)   (15.22)   (15.15)   (11.42)
    Transportation             (1.65)    (1.13)    (1.01)    (1.23)    (0.92)
    Asset retirement
     expenditures              (0.33)    (0.24)    (1.35)    (1.80)    (0.24)
    -------------------------------------------------------------------------
    Operating netback          28.24     25.89     30.84     27.72     28.83
    Processing and other
     income                     3.70      3.29      1.95      1.82      1.79
    General and
     administrative           (10.56)    (6.49)    (5.72)    (8.07)    (4.52)
    Interest                   (2.59)    (2.66)    (1.61)    (1.65)    (2.45)
    Current taxes (recovery)    0.35         -     (0.51)    (0.09)     0.06
    -------------------------------------------------------------------------
    Cash flow                  19.14     20.03     24.94     19.73     23.71
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash flow (000's)          1,812     2,682     3,085     6,559     9,998
    Changes in non-cash
     working capital balances
     relating to operating
     activities                  122     2,005    (3,207)   (2,617)   (3,879)
    -------------------------------------------------------------------------
    Cash provided by operating
     activities                1,934     4,687      (122)    3,942     6,119
    -------------------------------------------------------------------------
    

    Net Earnings

    Net loss for the three and nine months ended September 30, 2007 was
$1.4 million and $2.8 million respectively, as compared to a net loss of
$836 thousand and $203 thousand for the same periods in 2006. Loss per share
for the three and nine months ended September 30, 2007 was $0.03 and $0.06
respectively, as compared to a loss per share of $0.02 and $0.01 for the same
respective periods in 2006.
    The previously discussed NRF is not effective until January 1, 2009. Cash
flow from operations and net earnings until December 31, 2008 will not be
affected. Funds from operations and net earnings for periods from January 1,
2009 onwards may be negatively impacted by differing royalty rates. The actual
effect of the NRF on the Corporation will be determined based on the actual
enacted legislation, the production rates, commodity prices and product mix
subsequent to January 1, 2009. In addition, if the proposed royalty rates used
in the NRF were to significantly increase the Corporation's royalties, then a
ceiling test calculation could result in a writedown of the Corporation's
Property and Equipment amounts.

    Capital Expenditures

    During the third quarter 2007, three wells were drilled as the
Corporation focused its efforts toward actively licensing drilling locations
and evaluating existing seismic data for further locations. These wells are
suspended at September 30, 2007. Two wells await tie-in to a facility while
the remaining well continues to be evaluated. A total of 17 wells (6.1 net)
were drilled for the nine months of 2007. Of this total, 8 wells (2.7 net) are
classified as oil wells, 1 well (0.4 net) is classified as a gas well, 6 wells
(2.0 net) are suspended and 2 wells (1.0 net) are dry and abandoned. The
Corporation increased its prospect inventory in Pembina during the current
quarter, with 8 to 13 new targets identified in stacked pay intervals in the
Nordegg, Rock Creek, and Ellerslie formations.
    In the quarter ended September 30, 2007, expenditures on drilling and
completing were $1.843 million, while land, geological and geophysical,
equipping and facilities costs totalled $353 thousand. The Corporation also
closed on dispositions of certain royalty interests and unproven properties
during the third quarter for $286 thousand. The Corporation also capitalized
$296 thousand of general and administrative costs during the current quarter.
In addition to the above amounts, the Corporation has capitalized
$189 thousand and $714 thousand in stock based compensation and related future
income taxes for the three and nine months ended September 30, 2007.
    A total of $32 thousand was spent with respect to abandonment and site
restoration activities for the three months ended September 30, 2007, compared
with $32 thousand in the same period of 2006. These amounts were recorded as a
reduction of the asset retirement obligation liability.

    Liquidity and Capital Resources

    At September 30, 2007, Great Plains' total debt and working capital
deficiency totalled $12.1 million compared to $13.9 million at the end of
2006.
    The Corporation has a $26 million revolving demand credit facility with a
Canadian chartered bank with a balance outstanding at September 30, 2007, of
$15.2 million with an additional $0.4 million due in respect of outstanding
cheques. Subsequent to September 30, 2007 the Corporation's revolving demand
credit facility authorized borrowing amount was increased to $28 million with
a further increase to $29 million due upon receipt of regulatory approval to
increase production at the Randell location. It is anticipated that regulatory
approval will be received by January 2008. In addition, a $14.0 million non-
revolving acquisition/development credit facility is available. Interest is
charged at the bank's prime rate per annum. Standby fees associated with the
facilities are 0.10% per annum on the undrawn portion of each of the
facilities. Collateral for the facility consists of a general security
agreement, providing a security interest over all present and after acquired
personal property and a floating charge on all present and after acquired land
interests of the Corporation.
    The next review of this facility is scheduled for April 30, 2008.
    The Corporation expects to be able to fund its capital expenditure
program for the remainder of 2007 using cash flow and available credit
facilities.

    Commitments and Contingencies

    During 2006, Great Plains and its wholly owned subsidiaries issued a
total of $8.0 million flow-through shares. As at September 30, 2007, the
Corporation had incurred sufficient eligible exploration and development
expenditures to satisfy its obligations from this issue.
    In connection with the issuance of flow-through shares in March, 2007 and
September, 2007, the Corporation is required to expend $10.1 million of
eligible exploration and development expenditures by December 31, 2008. At
September 30, 2007, the Corporation had expended $1.38 million towards this
obligation.
    The Corporation has entered into lease arrangements for office space to
March 31, 2010. The future minimum lease payments total $684 thousand.
    The Corporation also enters into various contractual obligations in the
normal course of its operations, including the purchase of various operational
services, operating agreements, and office equipment. These contractual
obligations were entered into in the ordinary course of business and the terms
reflect market conditions.
    As a result of a dispute with a former contractor for the construction of
a drilling rig the Corporation provided a Letter of Guarantee totalling
$450,000 to the Province of Alberta. The Guarantee is provided as security for
costs incurred by the former contractor of the drilling rig until actual costs
can be determined. No amount has been claimed on this Letter of Guarantee. The
Guarantee expires February 16, 2008. Management is of the opinion that the
$450,000 claim made by the former contractor is without merit. Amounts paid,
if any, by the Corporation to settle this dispute will be recorded when the
amounts become known.

    Capitalization

    During the three months ended September 30, 2007, the Corporation issued
638,889 shares pursuant to a private placement, of which 100,000 were issued
on a flow-through basis. During the quarter ended March 31, 2007, the
Corporation had issued 6.7 million flow through shares pursuant to a private
placement. At the end of September, 2007 (with no change to November 9, 2007)
there was a total of 48.3 million Class "A" common shares outstanding, as
follows:

    
    -------------------------------------------------------------------------
    Issued and outstanding
     Class "A" common shares                 Number of shares         Amount
    -------------------------------------------------------------------------
    Balance, December 31, 2006                     40,957,672  $  86,760,222
    Tax effect on flow-through shares                       -     (2,466,319)
    Flow through shares issued for cash on
     private placement                              6,667,000     10,000,500
    Flow through shares issued for cash on
     private placement                                100,000        112,500
    Share issued for cash on private
     placement                                        538,889        485,000
    Share issue costs, net of future
     taxes, totalling $211,888                              -       (482,628)
    -------------------------------------------------------------------------
    Balance, September 30, 2007                    48,263,561  $  94,409,275
    -------------------------------------------------------------------------
    

    On August 3, 2007, the Corporation granted to directors and employees
1,784,000 stock options to purchase common shares at an exercise price of
$0.95 per share, of which 400,000 were issued under the employment inducement
provision, Section 613(c), of the TSX Company Manual. At September 30, 2007
(with no change to November 9, 2007) the Corporation had a total of
4.90 million stock options outstanding with a weighted average exercise price
of $1.14 per common share.
    The weighted average number of shares outstanding for the three and nine
month period ended September 30, 2007 was 47,714,949 and 45,725,817 (diluted -
47,756,907 and 45,813,237). For the three and nine month period ended
September 30, 2006, the weighted average number of shares outstanding was
37,207,672 and 37,192,151, respectively (diluted - 37,244,318 and 37,312,671).

    Related Party Transactions

    The Corporation had transactions with a law firm in which a director of
the Corporation is a partner. Transactions for the nine months ended
September 30th were as follows:

    
                                       Three months ended  Nine months ended
                                          September 30        September 30
    -------------------------------------------------------------------------
    Recorded as:                          2007      2006      2007      2006
    -------------------------------------------------------------------------
    General and administrative
     expenses                         $ 49,900  $  6,004  $ 82,754  $ 51,861
    Share capital issuance costs      $    150  $      -  $ 27,295  $  1,621
    Property and equipment            $      -  $ 14,397  $      -  $ 94,657
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    As at September 30, 2007, $25,789 was accrued and payable to the law firm
(September 30, 2006 - $6,732).
    The above transactions are in the normal course of business and have been
valued in these financial statements at the exchange amount which is the
amount of consideration established and agreed to by the related parties.

    Accounting Changes

    Effective January 1, 2007 the Corporation adopted the following new
accounting standards issued by the Canadian Institute of Chartered Accountants
relating to financial instruments. These new standards have been adopted on a
prospective basis with no restatements to prior periods financial statements.

    
      (i)   Financial Instruments - Recognition and Measurement
            This standard sets out the criteria for the recognition and
            measurement of financial instruments for fiscal years beginning
            on or after October 1, 2006. This standard requires all financial
            instruments within its scope, including derivatives, to be
            included on a Corporation's balance sheet and measured either at
            fair value or, in certain circumstances when fair value may not
            be considered most relevant, at cost or amortized cost. Changes
            in fair value are to be recognized in the statements of
            operations and comprehensive income.

            All financial assets and liabilities are recognized when the
            entity becomes a party to the contract creating the item. As
            such, any of the Corporation's outstanding financial assets and
            liabilities at the effective date of adoption are recognized and
            measured in accordance with the new requirements as if these
            requirements had always been in effect. Any changes to the fair
            value of assets and liabilities prior to October 1, 2006 are
            recognized by adjusting opening deficit or opening accumulated
            other comprehensive income.

            All financial instruments are classified into one of the
            following five categories: held-to-maturity, loans and
            receivables, and other financial liabilities, available-for-sale
            financial assets, and held-for-trading. Initial and subsequent
            measurement and recognition of changes in the value of financial
            instruments depends on their initial classification:

              -  Held-to-maturity investments, loans and receivables, and
                 other financial liabilities are initially measured at fair
                 value and subsequently measured at amortized cost.
                 Amortization of premiums or discounts and losses due to
                 impairment are included in current period net earnings.

              -  Available-for-sale financial assets are measured at fair
                 value. Revaluation gains and losses are included in other
                 comprehensive income until the asset is removed from the
                 balance sheet.

              -  Held for trading financial instruments are measured at fair
                 value. All gains and losses are included in net earnings in
                 the period in which they arise.

              -  All derivative financial instruments are classified as held
                 for trading financial instruments and are measured at fair
                 value, even when they are part of a hedging relationship.
                 All gains and losses are included in net earnings in the
                 period in which they relate.

            Upon adoption of these new standards, the Corporation designated
            its cash and cash equivalents as held-for-trading, which are
            measured at fair value. Accounts receivable are classified as
            held-to-maturity investments, which are measured at amortized
            cost. Accounts payable are classified as other financial
            liabilities which are also measured at amortized cost. During the
            nine months ended September 30, 2007 the Corporation entered into
            various financial instrument contracts as more fully disclosed in
            Off Balance Sheet Arrangements.

            Prior to adoption of the new standards, physical receipt and
            delivery contracts were not within the scope of the definition of
            a financial instrument. On adoption of the new standards, the
            Corporation elected to continue to account for its commodity
            sales contracts and other non-financial contracts on an accrual
            basis rather than as non-financial derivatives

            Derivatives embedded in other financial instruments must be
            separated and fair valued as separate derivatives under the new
            standard. The Corporation has not identified any embedded
            derivatives in any of its instruments.

      (ii)  Hedging (Section 3865)
            This new standard specifies the circumstances under which hedge
            accounting is permissible and how hedge accounting may be
            performed. On adoption of these standards, the Corporation did
            not have any agreements or contracts which are following hedge
            accounting.

      (iii) Comprehensive Income (Section 1530)
            Comprehensive income is the change in shareholders' equity during
            a period from transactions and other events from non-owner
            sources. This standard requires certain gains and losses that
            would otherwise be recorded as part of net earnings to be
            presented in "other comprehensive income" until it is considered
            appropriate to recognize into net earnings. This standard
            requires the presentation of comprehensive income, and its
            components in a separate financial statement that is displayed
            with the same prominence as the other financial statements.

            The Corporation had no "other comprehensive income or loss"
            transactions during the nine months ended September 30, 2007 and
            no opening or closing balances for accumulated other
            comprehensive income or loss.
    

    Off Balance Sheet Arrangements

    The Corporation has certain lease agreements that are entered into in the
normal course of operations. All leases are treated as operating leases
whereby lease payments are included in operating expenses or general and
administrative expenses depending on the nature of the lease. No asset or
liability value has been assigned to these leases in the balance sheet as of
September 30, 2007.

    Financial Instrument Contracts

    During the nine months ended September 30, 2007 the Corporation entered
into various financial instrument contracts to reduce its exposure to
fluctuations in commodity prices. The financial instrument contracts are
classified as held for trading and recorded at fair value on the consolidated
balance sheet. No financial instrument contracts were designated as hedges
during the nine months ended September 30, 2007.

    Details of these contracts were as follows:

    
    Financial WTI Crude Oil Contracts
    -------------------------------------------------------------------------

                                                       Volume         Fixed
    Term                                    Contract   (bbl/d)        Price
    -------------------------------------------------------------------------
    October 1, 2007 - December 31, 2007      Swap        150        US$69.05
    October 1, 2007 - December 31, 2007      Swap        100        US$70.55
    October 1, 2007 - June 30, 2008          Floor       200        US$72.50
    October 1, 2007 - June 30, 2008          Cap         200        US$83.00


    Financial AECO Gas Contracts
    -------------------------------------------------------------------------

                                                       Volume         Fixed
    Term                                    Contract   (GJ/d)         Price
    -------------------------------------------------------------------------
    October 1, 2007 to March 31, 2008        Floor       1,000      Cdn$7.20
    October 1, 2007 to March 31, 2008        Floor       1,000          7.00
    April 1, 2008 to December 31, 2008       Floor       2,000          6.50
    October 1, 2007 to March 31, 2008        Cap         1,000          9.50
    October 1, 2007 to March 31, 2008        Cap         1,000          8.80
    April 1, 2008 to December 31, 2008       Cap         2,000          8.00
    -------------------------------------------------------------------------
    

    Subsequent to September 30, 2007, the Corporation entered into a costless
collar with a floor of US$75.00 bbl and a cap of US$89.80 bbl on 100 bbl/d for
November 1, 2007 to June 30, 2008.

    Critical Accounting Estimates

    The reader is advised that the critical accounting estimates, policies
and practices as described in the Management Discussion and Analysis at
December 31, 2006 Year-End Report continue to be critical in determining Great
Plains' unaudited financial results as at September 30, 2007.

    
    Selected Annual and Quarterly Information ($000s)

    -----------------------------------------------------
                                             2007
    -----------------------------------------------------
                                  Q3        Q2        Q1
    -----------------------------------------------------
    Average daily production
     (boe/d)                   1,030     1,359     1,272
    -----------------------------------------------------
    Oil & gas sales            5,064     7,063     6,247
    -----------------------------------------------------
    Cash flow                  1,812     3,085     1,662
    -----------------------------------------------------
    Net earnings (loss)       (1,353)     (256)   (1,214)
    -----------------------------------------------------
    Basic cash flow per
     share                   $  0.04   $  0.06   $  0.04
    -----------------------------------------------------
    Total assets             112,324   114,557   119,147
    -----------------------------------------------------
    Long term liabilities     21,890    22,122    22,588
    -----------------------------------------------------
    Capital expenditures,
     net of dispositions       2,227    (2,040)   15,024
    -----------------------------------------------------


    -------------------------------------------------------------------------
                                              2006                      2005
    -------------------------------------------------------------------------
                                  Q4        Q3        Q2        Q1        Q4
    -------------------------------------------------------------------------
    Average daily production
     (boe/d)                   1,265     1,455     1,598     1,583     1,604
    -------------------------------------------------------------------------
    Oil & gas sales            5,648     6,820     7,065     7,940    10,917
    -------------------------------------------------------------------------
    Cash flow                  1,556     2,682     3,211     4,105     6,828
    -------------------------------------------------------------------------
    Net earnings (loss)      (28,432)     (836)      609        24     2,153
    -------------------------------------------------------------------------
    Basic cash flow per
     share                   $  0.04   $  0.07   $  0.09   $  0.11   $  0.19
    -------------------------------------------------------------------------
    Total assets             105,270   132,400   148,378   141,593   131,189
    -------------------------------------------------------------------------
    Long term liabilities     20,883    22,002    22,356    23,841    21,238
    -------------------------------------------------------------------------
    Capital expenditures,
     net of dispositions       5,536   (10,601)    9,560    14,062     9,882
    -------------------------------------------------------------------------




                        GREAT PLAINS EXPLORATION INC.

                      Consolidated Financial Statements

        For the three months and nine months ended September 30, 2007
                                   and 2006


    GREAT PLAINS EXPLORATION INC.

    Consolidated Balance Sheet
    -------------------------------------------------------------------------
    (unaudited)
                                                 September 30,   December 31,
                                                         2007           2006
    -------------------------------------------------------------------------
    ASSETS

    Current
      Accounts receivable                        $  5,830,607   $  4,462,351
      Financial instruments (Note 12)                 431,740              -
      Prepaid expenses and deposits                 1,471,154      1,562,916
    -------------------------------------------------------------------------
                                                    7,733,501      6,025,267

    Property and equipment (Note 4)               104,590,969     99,244,372

    -------------------------------------------------------------------------
                                                 $112,324,470   $105,269,639
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES

    Current
      Bank debt (Note 5)                         $ 15,553,585   $  6,695,392
      Accounts payable and accrued liabilities      4,284,840     13,240,928
    -------------------------------------------------------------------------
                                                   19,838,425     19,936,320

    Asset retirement obligations (Note 6)           3,349,057      3,838,758

    Future income taxes (Note 10)                  18,540,459     17,044,252
    -------------------------------------------------------------------------
                                                   41,727,941     40,819,330
    SHAREHOLDERS' EQUITY

    Share capital (Note 7)                         94,409,275     86,760,222

    Contributed surplus (Note 9)                    4,497,680      3,177,263
    Deficit                                       (28,310,426)   (25,487,176)
    -------------------------------------------------------------------------
                                                   70,596,529     64,450,309

    Commitments and contingencies (Note 11)
    Subsequent events (Notes 12 and 15)
    -------------------------------------------------------------------------
                                                 $112,324,470   $105,269,639
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying notes



    GREAT PLAINS EXPLORATION INC.
    Consolidated Statements of Operations, Other Comprehensive Income,
    and Retained Earnings (Deficit)
    -------------------------------------------------------------------------
    (unaudited)
                              Three months ended           Nine months ended
                                    September 30                September 30
    -------------------------------------------------------------------------
                              2007          2006          2007          2006
    -------------------------------------------------------------------------
    Revenues
    Oil and gas
     sales            $  5,064,161  $  6,820,213  $ 18,373,806  $ 21,825,464
    Royalty expense,
     net of ARTC          (810,501)   (1,194,001)   (3,097,069)   (4,364,572)
    Processing and
     other income          350,353       372,661       605,636       561,969
    Unrealized gain
     on financial
     instruments
     (Note 12)              90,349             -       431,740             -
    -------------------------------------------------------------------------
                         4,694,362     5,998,873    16,314,113    18,022,861
    -------------------------------------------------------------------------
    Expenses
    Operating            1,391,365     1,909,108     5,044,630     4,621,607
    Transportation         156,542       151,071       411,027       387,694
    General and
     administrative      1,000,732       869,005     2,687,547     1,906,834
    Stock based
     compensation
     (Notes 8 and 9)       598,902       204,878       772,927       805,302
    Interest               244,053       355,769       549,557     1,031,405
    Depletion,
     depreciation
     and accretion       3,010,477     3,645,210    10,566,341    11,268,235
    -------------------------------------------------------------------------
                         6,402,071     7,135,041    20,032,029    20,021,077
    -------------------------------------------------------------------------
    Loss before taxes   (1,707,709)   (1,136,168)   (3,717,916)   (1,998,216)

    Taxes (Note 10)

    Recovery of future
     income taxes         (321,634)     (299,772)     (925,700)   (1,769,746)
    Current taxes
     (recovery)            (32,691)            -        31,034       (25,508)
    -------------------------------------------------------------------------
                          (354,325)     (299,772)     (894,666)   (1,795,254)
    -------------------------------------------------------------------------
    Net loss            (1,353,384)     (836,396)   (2,823,250)     (202,962)

    Other
     Comprehensive
     Income                      -             -             -             -

    Retained earnings
     (deficit),
     beginning
     of period         (26,957,042)    3,781,402   (25,487,176)    3,147,968
    -------------------------------------------------------------------------
    Retained earnings
     (deficit), end
     of period        $(28,310,426) $  2,945,006  $(28,310,426) $  2,945,006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net loss per
     share (basic and
     diluted)
     (Note 7)         $      (0.03) $      (0.02) $      (0.06) $      (0.01)
    -------------------------------------------------------------------------



    GREAT PLAINS EXPLORATION INC.
    Consolidated Statements of Cash Flows
    -------------------------------------------------------------------------
    (unaudited)
                              Three months ended           Nine months ended
                                    September 30                September 30
                              2007          2006          2007          2006
    -------------------------------------------------------------------------
    Operating
     Activities
    Net loss          $ (1,353,384) $   (836,396) $ (2,823,250) $   (202,962)
    Depletion,
     depreciation
     and accretion       3,010,477     3,645,210    10,566,341    11,268,235
    Stock based
     compensation          598,902       204,878       772,927       805,302
    Unrealized gain
     on financial
     instruments           (90,349)            -      (431,740)            -
    Recovery of
     future income
     taxes                (321,634)     (299,772)     (925,700)   (1,769,746)
    Expenditures on
     asset retirement
     obligations           (31,596)      (31,855)     (599,369)     (102,818)
    -------------------------------------------------------------------------
                         1,812,416     2,682,065     6,559,209     9,998,011
    Changes in non-cash
     working capital
     balances relating
     to operating
     activities
     (Note 13)             122,296     2,004,519    (2,617,413)   (3,878,938)
    -------------------------------------------------------------------------
    Cash provided by
     operating
     activities          1,934,712     4,686,584     3,941,796     6,119,073
    -------------------------------------------------------------------------
    Financing activities
    Increase in
     bank debt          (2,426,720)  (14,173,383)    8,858,193     5,401,054
    Issue of share
     capital, net of
     issue costs           597,351             -     9,903,484       350,519
    Changes in non-cash
     working capital
     balances relating
     to financing
     activities
     (Note 13)                   -             -       (32,371)      (33,824)
    -------------------------------------------------------------------------
    Cash provided by
     (used in)
     financing
     activities         (1,829,369)  (14,173,383)   18,729,306     5,717,749
    -------------------------------------------------------------------------
    Investing
     activities
    Property and
     equipment
     expenditures       (2,513,149)   (8,704,581)  (18,668,095)  (32,326,742)
    Proceeds from
     asset dispositions    286,380    19,305,200     3,579,791    19,305,200
    Changes in non-cash
     working capital
     balances relating
     to investing
     activities
     (Note 13)           2,121,426    (1,113,820)   (7,582,798)    1,184,720
    -------------------------------------------------------------------------
    Cash used in
     investing
     activities           (105,343)    9,486,799   (22,671,102)  (11,836,822)
    -------------------------------------------------------------------------
    Increase
     (decrease) in
     cash and cash
     equivalents                 -             -             -             -
    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     beginning and
     end of period    $          -  $          -  $          -  $          -
    -------------------------------------------------------------------------



    GREAT PLAINS EXPLORATION INC.
    Notes to the Consolidated Financial Statements
    For the three months and nine months
    ended September 30, 2007 and 2006 (unaudited)
    -------------------------------------------------------------------------

    1.  DESCRIPTION OF BUSINESS

        Great Plains Exploration Inc. ("Great Plains" or the "Corporation")
        was incorporated under the Canada Business Corporations Act on March
        4, 2004, and commenced operations on June 11, 2004. Its principal
        business activity is petroleum and natural gas exploration,
        development and production in Western Canada. Great Plains is listed
        on the TSX under the symbol "GPX".

    2.  BASIS OF PRESENTATION

        These consolidated financial statements include the financial
        position, results of operations and cash flows of its wholly owned
        subsidiaries Great Plains Oil & Gas Partnership and 1196823 Alberta
        Ltd.

        Certain prior year comparative figures have been reclassified to
        conform to the presentation used in the current year.

    3.  SUMMARY OF ACCOUNTING POLICIES

        The unaudited interim consolidated financial statements of the
        Corporation have been prepared by management in accordance with the
        accounting principles generally accepted in Canada. In the opinion of
        management, these interim consolidated financial statements contain
        all adjustments of a normal and recurring nature necessary to present
        fairly the Corporation's financial position as at September 30, 2007
        and the results of its operations and cash flows for the three and
        nine months ended September 30, 2007 and 2006. The unaudited interim
        consolidated financial statements have been prepared following the
        same accounting policies and methods of computation as the
        consolidated financial statements for the fiscal year ended December
        31, 2006 except for the accounting policy changes described below.
        The unaudited interim consolidated financial statement note
        disclosures do not include all of those required by Canadian
        generally accepted accounting principles ("GAAP") applicable for
        annual financial statements. Accordingly, the interim consolidated
        financial statements should be read in conjunction with the
        consolidated financial statements and the notes thereto for the years
        ended December 31, 2006 and 2005.

        Changes in accounting policies

        Effective January 1, 2007 the Corporation adopted the following new
        accounting standards issued by the Canadian Institute of Chartered
        Accountants relating to financial instruments. These new standards
        have been adopted on a prospective basis with no restatements to
        prior periods' financial statements.

        (i)   Financial Instruments - Recognition and Measurement - (Section
              3855)

              This standard sets out the criteria for the recognition and
              measurement of financial instruments commencing
              January 1, 2007. This standard requires all financial
              instruments within its scope, including derivatives, to be
              included on a Corporation's balance sheet and measured either
              at fair value or, in certain circumstances when fair value may
              not be considered most relevant, at cost or amortized cost.
              Changes in fair value are to be recognized in the statements of
              operations and other comprehensive income.

              All financial assets and liabilities are recognized when the
              entity becomes a party to the contract creating the item. As
              such, any of the Corporation's outstanding financial assets and
              liabilities at the effective date of adoption are recognized
              and measured in accordance with the new requirements as if
              these requirements had always been in effect. Any changes to
              the fair value of assets and liabilities prior to
              January 1, 2007 are recognized by adjusting opening deficit or
              opening accumulated other comprehensive income.

              All financial instruments are classified into one of the
              following five categories: held-to-maturity, loans and
              receivables, and other financial liabilities,
              available-for-sale financial assets, and held-for-trading.
              Initial and subsequent measurement and recognition of changes
              in the value of financial instruments depends on their initial
              classification:

                -  Held-to-maturity investments, loans and receivables, and
                   other financial liabilities are initially measured at fair
                   value and subsequently measured at amortized cost.
                   Amortization of premiums or discounts and losses due to
                   impairment are included in current period net earnings.
                -  Available-for-sale financial assets are measured at fair
                   value. Revaluation gains and losses are included in other
                   comprehensive income until the asset is removed from the
                   balance sheet.
                -  Held for trading financial instruments are measured at
                   fair value. All gains and losses are included in net
                   earnings in the period in which they arise.
                -  All derivative financial instruments are classified as
                   held for trading financial instruments and are measured at
                   fair value, even when they are part of a hedging
                   relationship. All gains and losses are included in net
                   earnings in the period in which they relate.

              Upon adoption of these new standards, the Corporation
              designated its accounts receivable as loans and receivables,
              which are measured at amortized cost. Bank debt and accounts
              payable and accrued liabilities are classified as other
              financial liabilities which are also measured at amortized
              cost. The Corporation had no available-for-sale assets, or
              held-for-trading instruments. During the nine months ended
              September 30, 2007, the Corporation entered into various
              financial instrument contracts as more fully disclosed in
              Note 13.

              Prior to adoption of the new standards, physical receipt and
              delivery contracts were not within the scope of the definition
              of a financial instrument. On adoption of the new standards,
              the Corporation elected to continue to account for its
              commodity sales contracts and other non-financial contracts on
              an accrual basis rather than as non-financial derivatives.

              Derivatives embedded in other financial instruments must be
              separated and fair valued as separate derivatives under the new
              standard. The Corporation has not identified any embedded
              derivatives in any of its instruments.

        (ii)  Hedging (Section 3865)

              This new standard specifies the circumstances under which hedge
              accounting is permissible and how hedge accounting may be
              performed. On adoption of these standards, the Corporation did
              not have any agreements or contracts which are following hedge
              accounting.

        (iii) Comprehensive Income (Section 1530)

              Comprehensive income is the change in shareholders' equity
              during a period from transactions and other events from
              non-owner sources. This standard requires certain gains and
              losses that would otherwise be recorded as part of net earnings
              to be presented in "other comprehensive income or loss" until
              it is considered appropriate to recognize into net earnings.
              This standard requires the presentation of comprehensive
              income, and its components in a separate financial statement
              that is displayed with the same prominence as the other
              financial statements.

              The Corporation had no "other comprehensive income or loss"
              transactions during the nine months ended September 30, 2007
              and no opening or closing balances for accumulated other
              comprehensive income or loss.

    4.  PROPERTY AND EQUIPMENT

        ---------------------------------------------------------------------
                                                 September 30    December 31
                                                         2007           2006
        ---------------------------------------------------------------------

        Petroleum and natural gas properties
         and related equipment                $   168,093,090 $  152,350,112
        Accumulated depletion and
         depreciation                             (63,502,121)   (53,105,740)
        ---------------------------------------------------------------------
        Net book value                        $   104,590,969 $   99,244,372
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        As at September 30, 2007, property and equipment includes
        $16.7 million (December 31, 2006 -- $12.6 million) relating to
        unproved properties which have been excluded from the depletion
        calculation. Future development costs relating to proved undeveloped
        reserves of $3.0 million (December 31, 2006 -- $6.3 million) are
        included in the depletion and ceiling test calculations.

        During the three and nine month periods ending September 30, 2007,
        the Corporation has capitalized $295,876 and $1,049,199 of general
        and administrative expenses, respectively (three and nine month
        periods ended September 30, 2006 -- $375,696 and $890,088). The
        Corporation has also capitalized $189,477 and $714,966 of stock based
        compensation and related future income taxes for three and nine
        months ended September 30, 2007 (three and nine months ended
        September 30, 2006 - $110,000).

        During the nine months ended September 30, 2007 the Corporation sold
        certain oil and gas properties for approximately $3.6 million. As the
        change in depletion rate was less than 20 percent, no gain or loss
        has been recognized on these dispositions.

    5.  BANK DEBT

        The Corporation has a revolving demand credit facility with an
        authorized borrowing amount of $26 million, with interest charged at
        the bank's prime rate per annum. In addition, a $14 million non
        revolving acquisition/development credit facility is available, with
        interest charged at the bank's prime rate per annum. Standby fees
        associated with the facilities are 0.1% per annum on the undrawn
        portion of each of the facilities. Collateral for the facility
        consists of a general security agreement, providing a security
        interest over all present and after acquired personal property and a
        floating charge on all present and after acquired land interests of
        the Corporation. The next review of this facility is scheduled for
        April, 2008.

        At September 30, 2007, $15.2 million was drawn against the revolving
        demand credit facility with an additional $400 thousand due in
        respect of outstanding cheques.

        Subsequent to September 30, 2007 the Corporation's authorized
        borrowing amount was adjusted as a result of certain asset
        transactions (note 15).

    6.  ASSET RETIREMENT OBLIGATIONS

        The following table provides a reconciliation of the beginning and
        ending aggregate carrying amount of the obligation associated with
        the retirement of property and equipment:

        ---------------------------------------------------------------------
                                                 For the nine
                                                 months ended     Year ended
                                                 September 30    December 31
                                                         2007           2006
        ---------------------------------------------------------------------
        Balance, beginning of period             $  3,838,758   $  3,728,173
        Liabilities incurred                          158,764        299,901
        Change in estimate                            171,189        335,246
        Liabilities settled                          (599,369)      (317,475)
        Liabilities eliminated with property
         sale                                        (389,608)      (399,675)
        Accretion expense                             169,323        192,588
        ---------------------------------------------------------------------
        Balance, end of period                   $  3,349,057   $  3,838,758
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The present value of the asset retirement obligation is determined
        using an inflation rate of 2% and an annual credit adjusted discount
        rate of between 5% and 7.5% per annum. The Corporation estimates the
        total undiscounted amount of cash flows required to settle its asset
        retirement obligations is approximately $6.6 million which will be
        incurred between 2006 and 2041, with the majority of the costs to be
        incurred by 2025.

    7.  SHARE CAPITAL

        Authorized:

        Unlimited number of Class "A" Common Shares without nominal or par
        value
        Unlimited number of Class "B" Non-Voting Common Shares without
        nominal or par value
        Unlimited number of Preferred Shares without nominal or par value

        Issued:
        ---------------------------------------------------------------------
        Issued and outstanding Class "A"
        common shares                        Number of shares         Amount
                                             ----------------  --------------
        Balance, beginning of period               40,957,672  $  86,760,222
        Tax effect on flow through shares                   -     (2,466,319)
        Flow through shares issued for cash
         on private placement                       6,667,000     10,000,500
        Flow through shares issued for cash
         on private placement                         100,000        112,500
        Share issued for cash on private
         placement                                    538,889        485,000
        Share issue costs, net of future
         taxes, totalling $211,888                          -       (482,628)
        ---------------------------------------------------------------------
        Balance, September 30, 2007                48,263,561  $  94,409,275
        ---------------------------------------------------------------------

        Of the shares issued during the nine months ended September 30, 2007,
        120,000 flow through and 400,000 common shares for total proceeds in
        the amount of $502,500 were issued to a director and to an officer of
        the Corporation.

        Basic earnings per common share are computed by dividing the net
        earnings available to common shareholders by the weighted average
        number of common shares outstanding. Diluted earnings per common
        share are calculated using the treasury stock method to determine the
        dilutive effect of stock options. The treasury stock method assumes
        that the proceeds received from the exercise of "in the money" stock
        options are used to repurchase common shares at the average market
        price during the period. The weighted average number of shares
        assumed to be outstanding was as follows:

        ---------------------------------------------------------------------
                                  Three months ended       Nine months ended
                                        September 30            September 30
        ---------------------------------------------------------------------
                                    2007        2006        2007        2006
        ---------------------------------------------------------------------
         Basic                47,714,949  37,207,672  45,725,817  37,192,151
         Diluted              47,756,907  37,244,318  45,813,237  37,312,671
        ---------------------------------------------------------------------

        During the nine months ended September 30, 2007 the Corporation
        commenced an employee share purchase plan (the "Purchase Plan") for
        the benefit of all salaried employees. Under the Purchase Plan,
        employees may elect to contribute up to 10 percent of their salary
        towards the purchase of common shares in the open market. The Company
        matches employee contributions at a rate of $1.00 for each $1.00 of
        employee contribution for the purchase of common shares in the open
        market.

        Costs in respect of the employee purchase plan are expensed as
        incurred. Amounts of $37,800 and $217,863 were expensed in respect of
        the Corporation's contribution for the three and nine months ended
        September 30, 2007, respectively.

    8.  SHARE OPTION PLAN

        The Corporation has established a stock option plan whereby options
        may be granted to the Corporation's directors, officers, employees
        and consultants. The number of common shares issuable under the
        Corporation's share option plan cannot exceed 10% of the issued and
        outstanding common shares of the Corporation. The number of common
        shares issuable to any one person under the plan cannot exceed 5% of
        the total number of common shares outstanding from time to time. The
        exercise price of each option equals the market price of the
        Corporation's stock on the date of the grant and option's maximum
        life of ten years. The vesting period is determined by the Board of
        Directors. Options issued by the Corporation to date vest one-third
        immediately, one-third after one year following the date of grant,
        and one-third two years following the date of grant.

        The following table sets forth a reconciliation of the stock option
        activity for the period:

        ---------------------------------------------------------------------
                                                                    Weighted
                                                   Number of         Average
                                                      shares  Exercise Price
        ---------------------------------------------------------------------
        Balance at December 31, 2006               3,090,865           $2.50
        Options exercised                                  -           $0.00
        Options issued                             4,359,000           $0.94
        Options cancelled                         (2,552,865)          $2.45
        ---------------------------------------------------------------------
        Stock options outstanding, September 30,
         2007                                      4,897,000           $1.14
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        At September 30, 2007, stock options to purchase common shares were
        exercisable as follows:

        ---------------------------------------------------------------------
                                                                     Average
                                    Number of                    Contractual
          Exercise Price  Options Outstanding     Exercisable    Life (Years)
        ---------------------------------------------------------------------
                    0.95            1,784,000 (i)     594,667           4.83
                    1.00            2,575,000 (ii)    849,750           4.50
            2.45 to 2.91              538,000         501,334           3.00
        ---------------------------------------------------------------------
                                    4,897,000       1,945,751           4.46
        ---------------------------------------------------------------------

        (i)  For stock options granted in April, 2007 the estimated weighted
             average fair value of share options of $0.36 per option was
             determined using the Black-Scholes model using the following
             weighted average assumptions:

        ---------------------------------------------------------------------
        Risk-free interest rate                                           4%
        Expected hold period to exercise   lesser of 5 years and expiry date
                                           of options
        Volatility in the price of the
         Corporation's share                                             36%
        Dividend yield                                                    0%
        ---------------------------------------------------------------------

        (ii)  For stock options granted in August, 2007 the estimated
              weighted average fair value of share options of $0.59 per
              option was determined using the Black-Scholes model using the
              following weighted average assumptions:

        ---------------------------------------------------------------------
        Risk-free interest rate                                        4.64%
        Expected hold period to exercise   lesser of 5 years and expiry date
                                           of options
        Volatility in the price of the
         Corporation's share                                             71%
        Dividend yield                                                    0%
        ---------------------------------------------------------------------

        Total compensation expense is amortized over the vesting period of
        the option. Compensation expense of $598,902 and $772,927 has been
        recognized in the three and nine month periods ended
        September 30, 2007, ($204,878 and $805,302 for the three and nine
        month periods ended September 30, 2006) based on the estimated fair
        value of the options on the grant date in accordance with the fair
        value method of accounting for stock-based compensation. An
        additional $145,093 and $547,490 in stock based compensation has been
        capitalized for the three and nine months ended September 30, 2007,
        respectively (three and nine months ended September 30, 2006 -
        $80,000).

    9.  CONTRIBUTED SURPLUS

        The following summarizes the continuity of contributed surplus:

        ---------------------------------------------------------------------
                                                 Nine months      Year ended
                                          ended September 30,    December 31,
        ---------------------------------------------------------------------
                                                        2007            2006
        ---------------------------------------------------------------------
        Balance, beginning of period            $  3,177,263    $  2,092,185
        Stock based compensation - expensed          772,927         911,485
        Stock based compensation - capitalized       547,490         228,137
        Transfer to share capital on exercise of
         options and warrants                              -         (54,544)
        ---------------------------------------------------------------------
        Balance, end of period                  $  4,497,680    $  3,177,263
        ---------------------------------------------------------------------

    10. FUTURE INCOME TAXES

        The components of the net future income tax liability are as follows:

        ---------------------------------------------------------------------
                                             September 30        December 31
                                                     2007               2006
        ---------------------------------------------------------------------
        Temporary differences related to:
        Property and equipment              $  17,330,109      $  15,476,016
        Asset retirement obligations             (957,160)        (1,191,550)
        Unrealized gain on financial
         instruments                              139,452                  -
        Share issue costs                        (610,027)          (647,232)
        Attributed Canadian royalty income       (547,449)          (546,001)
        Partnership deferral                    3,185,534          3,953,019
        ---------------------------------------------------------------------
        Future income tax liability         $  18,540,459      $  17,044,252
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The provision for future income taxes is determined as follows:

        ---------------------------------------------------------------------
                               Three months ended          Nine months ended
                                     September 30               September 30
        ---------------------------------------------------------------------
                                2007         2006          2007         2006
        ---------------------------------------------------------------------
        Combined federal
         and provincial
         corporate tax
         rate                 32.30%       34.65%        32.30%       34.65%
        Loss before
         taxes           $(1,707,709) $(1,136,168)  $(3,717,916) $(1,998,216)
        Expected tax        (551,590)    (393,682)   (1,200,887)    (692,382)
        Add (deduct)
         income tax
         effect of:
        Non-deductible
         crown royalties,
         net of ARTC               -          755             -       72,280
        Resource
         allowance                 -       18,675             -      (18,912)
        Stock
         compensation
         expense             193,446       70,990       249,656      279,037
        Rate adjustment       36,510        3,490        25,531   (1,409,769)
        ---------------------------------------------------------------------
        Recovery of
         future income
         taxes           $  (321,634)  $ (299,772)  $  (925,700) $(1,769,746)
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        During the nine months ended September 30, 2007 the Corporation paid
        $23,000 towards estimated income taxes, interest charges, and
        penalties arising from an income tax audit of a predecessor
        corporation, Rock Creek Resources Ltd and $10,000 towards
        Saskatchewan capital taxes and related interest charges.

    11. COMMITMENTS AND CONTINGENCIES

        In connection with the issuance of flow through shares issued by the
        Corporation during the year ended December 31, 2006, the Corporation
        was required to expend $8.0 million of eligible exploration
        expenditures by December 31, 2007. All amounts were expended by
        March 31, 2007.

        At September 30, 2007, in connection with the issuance of
        flow-through shares by the Corporation in March, 2007 and September,
        2007, the Corporation is required to expend $10.1 million of eligible
        exploration expenditures by December 31, 2008. As at September 30,
        2007 the Corporation incurred expenditures of approximately
        $1.38 million towards this obligation.

        The Corporation has entered into lease arrangements for office space
        to March 31, 2010. The future minimum lease payments for the next
        four years are as follows:

              2007           $  68,439
              2008             273,755
              2009             273,755
              2010              68,439
                             ---------
                             $ 684,388
                             ---------
                             ---------

        As a result of a dispute with a former contractor for the
        construction of a drilling rig the Corporation provided a Letter of
        Guarantee totalling $450,000 to the Province of Alberta. The
        Guarantee is provided as security for costs incurred by the former
        contractor of the drilling rig until actual costs can be determined.
        No amount has been claimed on this Letter of Guarantee. The Guarantee
        expires February 16, 2008. Management is of the opinion that the
        $450,000 claim made by the former contractor is without merit.
        Amounts paid, if any, by the Corporation to settle this dispute will
        be recorded when the amounts become known.

    12. FINANCIAL INSTRUMENTS

        Fair Value

        The Corporation's financial instruments consist of accounts
        receivable, financial contracts, bank debt, accounts payable and
        accrued liabilities. For all periods presented, the fair value of
        financial instruments approximated their book values due to their
        near term maturity or their variable interest rate terms except for
        the financial contracts which have been adjusted to their fair market
        value.

        Interest Rate Risk

        As at September 30, 2007, the Corporation was exposed to changes in
        interest rates with respect to its bank debt.

        Credit Risk

        The Corporation's accounts receivable are primarily with customers in
        the oil and gas industry and government agencies and are subject to
        normal credit risks.

        Foreign Currency Exchange Risk

        The Corporation is exposed to foreign currency fluctuations as crude
        oil and natural gas prices received and certain financial contracts
        are referenced to United States dollar-denominated prices.

        Commodity Price Risk Management

        During the nine months ended September 30, 2007 the Corporation
        entered into various financial instrument contracts to reduce its
        exposure to fluctuations in commodity prices. The financial
        instrument contracts are classified as held for trading and recorded
        at fair value on the consolidated balance sheet. No financial
        instrument contracts were designated as hedges during the nine months
        ended September 30, 2007.

        Details of these contracts were as follows:

        Financial WTI Crude Oil Contracts
        ---------------------------------------------------------------------
                                                                  Unrealized
                                                                  Gain/(loss)
                                                                       as at
                                       Volume     Fixed   September 30, 2007
        Term                Contract   (bbl/d)    Price    (Canadian dollars)
        ---------------------------------------------------------------------
        October 1 2007 -
         December 31, 2007      Swap      150  US$69.05           $ (199,153)
        October 1, 2007 -
         December 31, 2007      Swap      100  US$70.55             (114,717)
        October 1, 2007 -
         June 30, 2008         Floor      200  US$72.50              117,639
        October 1, 2007 -
         June 30, 2008           Cap      200  US$83.00             (121,095)

        Financial AECO Gas Contracts
        ------------------------------------------------
                                       Volume     Fixed
        Term                Contract   (bbl/d)    Price
        ------------------------------------------------
        October 1, 2007 to
         March 31, 2008        Floor    1,000  Cdn$7.20              322,298
        October 1, 2007
         to March 31, 2008     Floor    1,000      7.00              287,239
        April 1, 2008 to
         December 31, 2008     Floor    2,000      6.50              458,525
        October 1, 2007 to
         March 31, 2008          Cap    1,000      9.50              (14,136)
        October 1, 2007 to
         March 31, 2008          Cap    1,000      8.80              (20,723)
        April 1, 2008 to
         December 31, 2008       Cap    2,000      8.00             (284,137)
        ---------------------------------------------------------------------
                                                             Total  $431,740
                                                                   ----------

        Subsequent to September 30, 2007 the Corporation entered into a
        costless collar with a floor of US$ 75.00 bbl and a cap of
        US$ 89.80 bbl on 100 bbl/day for November 1, 2007 to June 30, 2008.

    13. SUPPLEMENTAL CASH FLOW INFORMATION

        Changes in non-cash working capital, excluding bank debt:


    -------------------------------------------------------------------------
                               Three months ended          Nine months ended
                                     September 30               September 30
    -------------------------------------------------------------------------
                                2007         2006          2007         2006
    -------------------------------------------------------------------------

    Accounts
     receivable          $ 2,056,960  $ 2,102,414   $(1,368,256) $ 2,349,157
    Prepaid expenses and
     deposits               (251,649)    (312,585)       91,762   (1,692,018)
    Accounts payable and
     accrued liabilities     438,411     (899,130)   (8,956,088)  (3,385,181)
    -------------------------------------------------------------------------
    Change in non-cash
     working capital     $ 2,243,722  $   890,699  $(10,232,582) $(2,728,042)
    -------------------------------------------------------------------------
    Relating to:
      Operating
       activities        $   122,296  $ 2,004,519  $ (2,617,413) $(3,878,938)
      Financing
       activities                  -            -       (32,371)     (33,824)
      Investing
       activities          2,121,426   (1,113,820)   (7,582,798)   1,184,720
    -------------------------------------------------------------------------
    Change in non-cash
     working capital     $ 2,243,722  $   890,699  $(10,232,582) $(2,728,042)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The Corporation made the following cash outlays in respect of interest
    expense and current taxes:

        ---------------------------------------------------------------------
                               Three months ended          Nine months ended
                                     September 30               September 30
        ---------------------------------------------------------------------
                                2007         2006          2007         2006
        ---------------------------------------------------------------------
        Interest expense   $ 244,053    $ 314,006     $ 714,420    $ 856,168
        Current tax        $       -    $       -     $  63,725    $ 122,473
        ---------------------------------------------------------------------


    14. RELATED PARTY TRANSACTIONS

        The Corporation had transactions with a law firm in which a director
        of the Corporation is a partner. Transactions for the three and nine
        months ended September 30th were as follows:

    -------------------------------------------------------------------------
                               Three months ended          Nine months ended
                                     September 30               September 30
    -------------------------------------------------------------------------
    Recorded as:                2007         2006          2007         2006
    -------------------------------------------------------------------------
    General and
     administrative
     expenses              $  49,900     $  6,004     $  82,754    $  51,861
    Share capital
     issuance costs        $     150     $      -     $  27,295    $   1,621
    Property and
     equipment             $       -     $ 14,397     $       -    $  94,657
    -------------------------------------------------------------------------


        As at September 30, 2007, $25,789 was accrued and payable to the law
        firm (September 30, 2006 - $6,732).

        The above transactions are in the normal course of business and have
        been valued in these financial statements at the exchange amount
        which is the amount of consideration established and agreed to by the
        related parties. Prior year comparative figures have been
        reclassified to conform to the presentation used in the current year.

    15. SUBSEQUENT EVENT

        Subsequent to September 30, 2007 the Corporation entered into an
        agreement to purchase additional properties containing light oil
        production of approximately 220 boe per day for $8.25 million.

        The Corporation also disposed of certain properties for $5.05 million
        which had primarily gas production of approximately 85 boe per day
        during September. As the change in depletion rate is less than
        20 percent, no gain or loss on disposition will be recognized on this
        sale.

        As a result of the above transactions the Corporation's revolving
        demand credit facility authorized borrowing amount was increased to
        $28 million with a further increase to $29 million due upon receipt
        of regulatory approval to increase production at a specific property.
        It is anticipated that regulatory approval will be received by
        January, 2008.
    

    %SEDAR: 00020740E




For further information:

For further information: Great Plains Exploration Inc., Stephen P.
Gibson, President & CEO, Sean Bovingdon, VP Finance & CFO, Tel: (403)
262-9620, Fax: (403) 262-9622, Website: www.greatplainsexp.com, Email:
info@greatplainsexp.com

Organization Profile

GREAT PLAINS EXPLORATION INC.

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