Iteration Energy announces September 30, 2007 quarter end results



    (All amounts are in Canadian dollars, unless stated otherwise)

    CALGARY, Nov. 14 /CNW/ - Iteration Energy Ltd. (TSX-ITX) ("Iteration" or
the "Company") announced today its financial and operating results as at and
for the three and nine months ended September 30, 2007. The financial
statements, together with Management's Discussion and Analysis (MD&A), have
been filed on the Company's SEDAR profile at www.sedar.com. They are also
available on the Company's website at www.iterationenergy.com.

    The major highlights of the three month period ended September 30, 2007
include:

    
     -  Drilled 4 net oil wells and 12 net gas wells at a 100% success rate.

     -  Average production was slightly better than guidance at 6,304
        boed which amounts to a 35% increase from the quarter ended
        September 30, 2006.

     -  As expected, third quarter 2007 average production was
        approximately equivalent to that in the second quarter of 2007
        since the Company held back some of its summer drilling until later
        in the year when surface access and drilling costs are less
        expensive.

     -  Successfully closed the acquisition of some Alberta producing
        properties on September 28, 2007:

           -  Price: $52.375 million, before adjustments ($50.501 million
              after preliminary adjustments)

           -  Effective date: June 1, 2007

           -  Production: 1,140 boed capability (50% oil, 50% gas)

           -  Third party engineering: 3.41 million boed Proved plus Probable
              reserves

           -  Value of land, seismic and movable facilities: $3.5 million

           -  Metrics: $42,580/boed, $14.35/boe Proved plus Probable

        The acquisition, coupled with ongoing drilling operations boosts the
        Company's guidance for the fourth quarter of 2007 to average
        production of 8,250 boed, up from the previous guidance of 7,200
        boed.

     -  The Company issued, pursuant to a bought deal financing, 5.21 million
        Subscription Receipts at a price of $4.80 per Subscription Receipt.
        Gross proceeds from the offering were $25 million (net proceeds were
        approximately $23.4 million), which were applied to reduce the
        Company's credit facility. The offering closed October 17, 2007, at
        which time the Subscription Receipts were exchanged for Common Shares
        of the Company for no additional consideration. The underwriters were
        also granted an over-allotment option for an additional 781,500
        Subscription Receipts at a price of $4.80 per Subscription Receipt.
        On November 13, 2007 the underwriters exercised their option for
        767,400 Subscription Receipts, which were immediately converted into
        Common Shares, and resulted in additional gross proceeds of
        $3.7 million (net proceeds of $3.5 million) which were applied to
        reduce drawings on the Company's credit facility.

    SUMMARY OF RESULTS

    Year over year comparative results are as follows:

    -------------------------------------------------------------------------
                                    Three Months            Nine Months
                                    Ended Sept 30,          Ended Sept 30,
    -------------------------------------------------------------------------
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Production (boed)              6,304       4,680       6,163       4,140
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Realized commodity
     price ($/boe)                $38.21      $39.22      $43.22      $41.24
    -------------------------------------------------------------------------
    Operating netbacks ($/boe)    $21.10      $21.72      $25.38      $24.48
    -------------------------------------------------------------------------
    Production expense ($/boe)     $6.53       $9.57       $7.66       $7.31
    -------------------------------------------------------------------------
    G & A expense ($/boe)          $2.19       $2.94       $2.21       $2.38
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Production revenue
     before royalties ($M)       $22,161     $16,888     $72,711     $46,600
    -------------------------------------------------------------------------
    Funds from
     operations ($M) (1)         $10,562      $7,676     $37,403     $24,637
    -------------------------------------------------------------------------
    Funds from operations
     per basic and diluted
     share ($) (2)                 $0.16       $0.14       $0.61       $0.48
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Stock based compensation
     expense (recovery)
     included in net loss        $(1,486)      $(183)     $3,722     $(1,865)
    -------------------------------------------------------------------------
    Net loss ($M)                $(1,985)    $(2,370)    $(6,293)    $(1,193)
    -------------------------------------------------------------------------
    Loss per basic and diluted
     share ($) (2)                $(0.03)     $(0.04)     $(0.10)     $(0.02)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Net undeveloped land ('000's acres)                      260         177
    -------------------------------------------------------------------------

    (1)    Management uses funds from operations and funds from operations
           per share (before changes in non-cash working capital) to analyze
           operating performance and leverage. Funds and funds per share as
           presented do not have any standardized meaning prescribed by
           Canadian GAAP and therefore they may not be comparable with the
           calculation of similar measures for other entities. Funds as
           presented is not intended to represent operating cash flow or
           operating profits for the period nor should it be viewed as an
           alternative to cash flow from operating activities, net earnings
           or other measures of financial performance calculated in
           accordance with Canadian GAAP. All references to funds and funds
           per share throughout this report are based on cash flow from
           operating activities before changes in non-cash working capital.

    (2)    For periods with a net loss, basic and diluted common shares used
           in the per share calculations are the same as options and warrants
           have an anti-dilutive effect.
    

    Outlook for 2007

    The Company is continuing to expand its project inventory in its focus
areas. This portfolio of opportunities is being evaluated in light of the
recently announced Alberta royalty changes so as to optimize the Company's
spending. At today's prices, the Company is relatively unaffected by the
upcoming royalty changes as approximately 43% of production is from British
Columbia, and much of the Alberta production is from lower rate wells. Future
drilling for higher rate wells will be impacted to a greater extent and, as a
result, the effect of the future Alberta royalty rate changes will be factored
into our assessment when choosing where to pursue future growth opportunities
for the Company. In the short term, the Company expects to meet previous
guidance, adjusted for the impact of the September 28, 2007 acquisition, as
follows:

    
    -------------------------------------------------------------------------
                                            Pre September     Post September
                                               28, 2007           27, 2007
                                              Guidance           Guidance
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Projected average production,
     fourth quarter 2007                       7,200 boed         8,250 boed
    -------------------------------------------------------------------------
    Projected average production 2007          6,400 boed         6,680 boed
    -------------------------------------------------------------------------
    Projected 2007 capital expenditures,
     including acquisitions                   $92 million       $149 million
    -------------------------------------------------------------------------
    Projected 2007 funds flow                 $51 million        $54 million
    -------------------------------------------------------------------------
    Estimated December 31, 2007 net debt      $34 million        $61 million
    -------------------------------------------------------------------------
    


    Advisory - Forward-Looking Information

    Natural gas is converted to crude oil equivalent at a ratio of six
thousand cubic feet to one barrel. Boe's may be misleading, particularly if
used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.
    This press release was prepared on November 14, 2007 and is management's
assessment of Iteration's historical financial and operating results. The
reader should be aware that historical results are not necessarily indicative
of future performance. This press release contains forward-looking statements
relating to future events or future performance. In some cases,
forward-looking statements can be identified by terminology such as "may",
"will", "should"," expects", "projects", "plans", "anticipates" and similar
expressions. These statements represent management's expectations or beliefs
concerning, among other things, future operating results and various
components thereof affecting the economic performance of Iteration. Undue
reliance should not be placed on these forward-looking statements which are
based upon management's assumptions and are subject to known and unknown risks
and uncertainties, including the business risks discussed below, which may
cause actual performance and financial results in future periods to differ
materially from any projections of future performance or results expressed or
implied by such forward-looking statements. Accordingly, readers are cautioned
that events or circumstances could cause results to differ materially from
those predicted. The Company undertakes no obligation, except as required by
applicable securities legislation, to update publicly or to revise any of the
included forward looking statements, whether as a result of new information,
future events or otherwise.
    The forward looking statements contained herein are expressly qualified
by this cautionary statement. Readers are cautioned that the following list of
risk factors is not exhaustive.
    In particular, this press release contains forward-looking statements and
information pertaining to the following:

    
        -  The quantity and recoverability of our reserves;
        -  The timing and amount of future production;
        -  Prices for natural gas produced;
        -  Operating and other costs;
        -  Business strategies and plans of Management;
        -  Supply and demand of natural gas;
        -  Expectations regarding our ability to raise capital and to add to
           our reserves through acquisitions as well as exploration and
           development;
        -  The focus of capital expenditures on development activity rather
           than exploration;
        -  The sale, farming in, farming out or development of certain
           exploration properties using third party resources;
        -  The use of development activity and acquisitions to replace and
           add to reserves;
        -  The impact of changes in natural gas prices on cash flow after
           hedging;
        -  Drilling plans;
        -  The existence, operations and strategy of the commodity price risk
           management program;
        -  The approximate and maximum amount of forward sales and hedging to
           be employed;
        -  The Company's acquisition strategy, and the criteria to be
           considered and the benefits to be derived;
        -  The impact of Canadian federal and provincial governmental
           regulation on the Company relative to other issuers of similar
           size;
        -  Our treatment under governmental regulatory regimes;
        -  The goal to sustain or grow production and reserves through
           prudent management and acquisition;
        -  The emergence of accretive growth opportunities; and
        -  The Company's ability to benefit from the combination of growth
           opportunities and the means to grow through the capital markets.

    Iteration's actual results could differ materially from those anticipated
in our forward-looking statements as a result of the risk factors set forth
below and elsewhere in this press release which include but are not limited
to:

        -  Volatility in market prices for natural gas;
        -  Risks inherent in our operations;
        -  Uncertainties associated with estimating reserves;
        -  Competition for, among other things: capital, acquisitions of
           reserves, undeveloped lands and skilled personnel;
        -  Incorrect assessments of the value of acquisitions;
        -  Geological, technical, drilling and process problems;
        -  General economic conditions including fluctuations in the price of
           natural gas;
        -  Royalties payable in respect of Iteration's production;
        -  Governmental regulation of the oil and gas industry, including
           environmental regulation;
        -  Fluctuation in foreign exchange or interest rates;
        -  Unanticipated operational events that can reduce production or
           cause production to be shut-in or delayed;
        -  Stock market volatility and market valuations; and
        -  The need to obtain required approvals from regulatory authorities.
    

    Many of these risk factors and uncertainties are discussed in further
detail in the Management's Discussion and Analysis and the Annual Information
Form for the year ended December 31, 2006, as well as Management's Discussion
and Analysis for the three months and nine months ended September 30, 2007,
which are available through the internet on the Company's website at
www.iterationenergy.com and on the Company's SEDAR profile at www. sedar.com.

    The TSX has not reviewed this press release and does not accept
    responsibility for the accuracy of any of the data presented here-in.

    Iteration Energy Ltd

    Iteration is an Alberta based corporation engaged in the business of
exploring for and developing oil and natural gas reserves in Western Canada
and acquiring natural resource properties. Iteration's common shares are
listed on the Toronto Stock Exchange under the symbol "ITX".
    %SEDAR: 00002576E




For further information:

For further information: please see the Company website at
www.iterationenergy.com.; Company contacts at (403) 261-6883: Mr. Brian
Illing, President and CEO, Mr. Sean Johnson, CFO

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ITERATION ENERGY LTD.

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