Iteration Energy Ltd. (ITX) announces an 80% Reserve increase in 2006



    CALGARY, March 6 /CNW/ - Iteration Energy Ltd ("Iteration", "ITX" or "the
Company") is pleased to provide the following update on its 2006 reserve
additions, production increases, and capital spending. Highlights for the year
include:

    
    -   An 80% increase in Proved plus Probable reserves to 10.9 mmboe.
    -   A 51% increase in Total Proved reserves to 7.0 mmboe.
    -   A 60% increase in exit production to 6050 boed.
    -   A 24% increase in annual average production to 4420 boed.
    -   Estimated capital spending of $114 million resulted in replacing
        production of 1.6 mmboe by a factor of 4.0 on a Proved plus Probable
        basis.

    The following table provides comparative data for year-end 2005 and 2006.

    -------------------------------------------------------------------------
                                                    Dec 31,   Dec 31,       %
                                                      2006      2005   Change
    -------------------------------------------------------------------------
    Total Proved Reserves (mboe)                     6,982     4,622      51
    -------------------------------------------------------------------------
    Proved plus Probable Reserves (mboe)            10,894     6,067      80
    -------------------------------------------------------------------------
    NAV PV(10) Proved plus Probable Reserves
     ($Million)(1)                                     208       149      40
    -------------------------------------------------------------------------
    Estimated Annual Average Production (boed)(2)    4,420     3,560      24
    -------------------------------------------------------------------------
    Estimated Exit Production (boed)(2)              6,050     3,770      60
    -------------------------------------------------------------------------
    Estimated Capital Expenditures ($Million) (2)      114        43     164
    -------------------------------------------------------------------------
    Proved plus Probable F&D costs without future
     Capital ($/boe)                                 15.00     28.53     (47)
    -------------------------------------------------------------------------
    Proved plus Probable F&D costs with future
     Capital ($/boe)                                 18.39     30.34     (39)
    -------------------------------------------------------------------------
    Proved plus Probable FD&A costs with future
     Capital ($/boe)                                 19.92     30.34     (34)
    -------------------------------------------------------------------------
    Shares outstanding (Million)                      57.4      48.9      17
    -------------------------------------------------------------------------
    Proved plus Probable Reserves per thousand
     shares (boe)                                      190       125      52
    -------------------------------------------------------------------------
    Exit production rate per million shares (boed)     105        77      36
    -------------------------------------------------------------------------
    Land base (thousand net acres)                     314       142     121
    -------------------------------------------------------------------------

        (1) The Company has seen a significant increase in Net Asset Values
            despite the Dec 31, 2006 value being based on the McDaniel
            Associates Consultants Ltd. January 1, 2007 price forecasts
            which are substantially lower than their forecasts a year
            earlier.
        (2) The Company's 2006 audited financial statements will be published
            before the end of March 2007.

    McDaniel and Associates Consultants Ltd conducted the independent
evaluation of the Company's 2006 reserves. Further details of the reserves
from this evaluation and the resulting finding and development costs are given
below:

    -------------------------------------------------------------------------
    2006 Finding & Development Costs and
    Finding, Development & Net Acquisition Costs               Proved Proved
                                                                 Plus   Plus
                                           Proved            Probable   Prob-
                                Capital   Reserve   Proved    Reserve   able
                           Expenditures Additions    Costs  Additions  Costs
    -------------------------------------------------------------------------
                          ($ thousands)    (mboe)   ($/boe)    (mboe) ($/boe)
    F&D exploration and
     development program
     before revisions           63,235     2,640     23.95     4,719   13.40
    -------------------------------------------------------------------------
    F&D exploration and
     development program
     after revisions (a)        63,235     2,390     26.45     4,215   15.00
    -------------------------------------------------------------------------
    Change in proved future
     development capital (b)     8,400       n/a       n/a       n/a     n/a
    -------------------------------------------------------------------------
    Change in proved plus
     probable future
     development capital (c)    14,290       n/a       n/a       n/a     n/a
    -------------------------------------------------------------------------
    Proved F&D including
     change in future
     development capital
     (d) =
     (a+b)                      71,635     2,390     29.97       n/a     n/a
    -------------------------------------------------------------------------
    Proved plus probable F&D
     including change in
     future development capital
     (e) =
     (a+c)                      77,525       n/a       n/a     4,215   18.39
    -------------------------------------------------------------------------
    Net acquisition/disposition
     activity (f)               50,836     1,585     32.07    2,229    22.80
    -------------------------------------------------------------------------
    Total 2006 proved FD&A
     costs including future
     development capital (d+f) 122,471     3,975     30.81      n/a      n/a
    -------------------------------------------------------------------------
    Total 2006 proved plus
     probable FD&A costs
     including future
     development capital (e+f) 128,361       n/a       n/a    6,444    19.92
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Summary of Company Gross Reserves (forecast prices)
                                                              2006      2005
    -------------------------------------------------------------------------
    Proved
    -------------------------------------------------------------------------
      Light and medium oil (mbbls)                              86        56
    -------------------------------------------------------------------------
      Heavy Oil (mbbls)                                        160         -
    -------------------------------------------------------------------------
      Gas (mmcf)                                            39,324    26,187
    -------------------------------------------------------------------------
      NGL (mbbls)                                              182       201
    -------------------------------------------------------------------------
      BOE (mboe)                                             6,982     4,622
    -------------------------------------------------------------------------
    Proved plus probable
    -------------------------------------------------------------------------
      Light and medium oil (mbbls)                             161       113
    -------------------------------------------------------------------------
      Heavy Oil (mbbls)                                        257         -
    -------------------------------------------------------------------------
      Gas (mmcf)                                            61,267    34,214
    -------------------------------------------------------------------------
      NGL (mbbls)                                              265       252
    -------------------------------------------------------------------------
      BOE (mboe)                                            10,894     6,067
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Summary of Oil and Gas Reserves and Net Present Values of Future Net
    Revenue As of December 31, 2006

    -------------------------------------------------------------------------
    Forecasted Prices and Costs
                                               Reserves
    -------------------------------------------------------------------------
                                 Light and
                                  Medium         Heavy            Natural
    Reserve Category                Oil           Oil               Gas
    -------------------------------------------------------------------------
                               Gross    Net  Gross    Net     Gross       Net
    -------------------------------------------------------------------------
                               (Mbbl) (Mbbl) (Mbbl) (Mbbl)    (Mmcf)   (Mmcf)
    Proved
    -------------------------------------------------------------------------
      Developed producing      75.1   74.6   69.9   61.7  30,290.0  23,974.3
    -------------------------------------------------------------------------
      Developed non-producing  11.3   11.3      -      -   5,735.5   4,409.8
    -------------------------------------------------------------------------
      Undeveloped                 -      -   90.0   79.1   3,298.9   2,596.7
    -------------------------------------------------------------------------
    Total proved               86.4   85.9  159.9  140.9  39,324.4  30,980.7
    -------------------------------------------------------------------------
    Probable                   74.7   65.7   97.0   86.0  21,942.9  17,116.2
    -------------------------------------------------------------------------
    Total proved plus
     probable                 161.2  151.6  256.9  226.9  61,267.3  48,096.9
    -------------------------------------------------------------------------

    --------------------------------------------------------------
    Forecasted Prices and Costs
                                             Reserves
    --------------------------------------------------------------
                                  Natural Gas
    Reserve Category                Liquids             BOE
    --------------------------------------------------------------
                                 Gross    Net     Gross       Net
    --------------------------------------------------------------
                                 (Mbbl) (Mbbl)    (Mboe)    (Mboe)
    Proved
    --------------------------------------------------------------
      Developed producing        168.8  133.0   5,362.2   4,265.1
    --------------------------------------------------------------
      Developed non-producing      8.1    6.3     975.4     752.6
    --------------------------------------------------------------
      Undeveloped                  4.6    3.7     644.4     515.6
    --------------------------------------------------------------
    Total proved                 181.6  143.0   6,982.0   5,533.3
    --------------------------------------------------------------
    Probable                      83.6   65.3   3,912.5   3,069.8
    --------------------------------------------------------------
    Total proved plus probable   265.2  208.3  10,894.4   8,603.0
    --------------------------------------------------------------



                     Net Present Value of Future Revenue
    -------------------------------------------------------------------------
                                      Before Income Taxes
    Reserve Category                 Discounted at (%/year)
    -------------------------------------------------------------------------
                           0          5         10         15         20
    -------------------------------------------------------------------------
                       ($M)       ($M)       ($M)       ($M)       ($M)
    -------------------------------------------------------------------------
    Proved
      Developed
       producing       145,333.6  128,585.6  115,993.2  106,091.4   98,058.6
    -------------------------------------------------------------------------
      Developed
       non-producing    23,599.3   19,256.0   16,200.6   13,959.6   12,258.4
    -------------------------------------------------------------------------
      Undeveloped       12,648.6   10,290.4    8,647.2    7,415.6    6,447.7
    -------------------------------------------------------------------------
    Total proved       181,581.5  158,132.0  140,841.0  127,466.5  116,764.7
    -------------------------------------------------------------------------
    Probable           110,494.4   84,386.4   67,569.7   55,874.5   47,324.3
    -------------------------------------------------------------------------
    Total proved plus
     probable          292,076.0  242,518.4  208,410.8  183,341.0  164,089.0
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Summary of Pricing and Inflation Rate Assumptions
    As of December 31, 2006

    -------------------------------------------------------------------------
    Forecast Prices and Costs
    This summary table identifies benchmark reference pricing that apply to
    the Company. The oil, gas, NGL reference prices, inflation rates and
    exchange rates used in the forecasted price evaluation were prepared by
    McDaniel & Associates Consultants Ltd., the Company's independent
    qualified reserves evaluator, and are as follows:
    -------------------------------------------------------------------------
                                   WTI     Edmonton    Alberta        U.S.
                                  Crude      Light       AECO      Henry Hub
    Year                           Oil     Crude Oil  Spot Price   Gas Price
                               $US/bbl(1)   $C/bbl(2)    $C/GJ     $US/MMbtu
    -------------------------------------------------------------------------
    History
    -------------------------------------------------------------------------
    2002                           26.10       39.95        3.86        3.36
    -------------------------------------------------------------------------
    2003                           31.05       43.15        6.32        5.49
    -------------------------------------------------------------------------
    2004                           41.40       52.54        6.20        5.90
    -------------------------------------------------------------------------
    2005                           56.56       68.72        8.14        8.60
    -------------------------------------------------------------------------
    2006                           66.23       72.80        6.25        6.75
    -------------------------------------------------------------------------
    Forecast
    -------------------------------------------------------------------------
    2007                           62.50       70.80        6.85        7.40
    -------------------------------------------------------------------------
    2008                           61.20       69.30        7.05        7.60
    -------------------------------------------------------------------------
    2009                           59.80       67.70        7.40        7.95
    -------------------------------------------------------------------------
    2010                           58.40       66.10        7.50        8.05
    -------------------------------------------------------------------------
    2011                           56.80       64.20        7.70        8.25
    -------------------------------------------------------------------------
    2012                           58.00       65.60        7.90        8.50
    -------------------------------------------------------------------------
    2013                           59.10       66.80        8.10        8.65
    -------------------------------------------------------------------------
    2014                           60.30       68.20        8.25        8.85
    -------------------------------------------------------------------------
    2015                           61.50       69.50        8.45        9.00
    -------------------------------------------------------------------------
    2016                           62.70       70.90        8.60        9.20
    -------------------------------------------------------------------------
    2017                           64.00       72.30        8.75        9.40
    -------------------------------------------------------------------------
    2018                           65.30       73.80        8.95        9.55
    -------------------------------------------------------------------------
    2019                           66.60       75.30        9.10        9.75
    -------------------------------------------------------------------------
    2020                           67.90       76.80        9.30        9.95
    -------------------------------------------------------------------------
    2021                           69.30       78.30        9.50       10.15
    -------------------------------------------------------------------------
    Thereafter                    +2%/yr      +2%/yr      +2%/yr      +2%/yr
    -------------------------------------------------------------------------
    (1) West Texas Intermediate at Cushing Oklahoma 40 degrees API/0.5%
        sulphur
    -------------------------------------------------------------------------
    (2) Edmonton Light Sweet 40 degrees API, 0.3% sulphur
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Reconciliation of Company Interest Reserves by Principal Product Type

    -------------------------------------------------------------------------
    Forecast Prices and Costs
    -------------------------------------------------------------------------
                                Light and  Natural         Natural
                                   Medium    Heavy             Gas
                                    Crude      Oil    Gas  Liquids       BOE
    -------------------------------------------------------------------------
                                    (mbbl)  (mbbl)   (bcf)  (mbbl)     (mboe)
    -------------------------------------------------------------------------
    Proved
     Producing   Opening balance     55.9       -    22.1   176.9    3,913.9
    -------------------------------------------------------------------------
                 Technical
                  revisions          27.5     5.0     1.7    17.0      336.3
                -------------------------------------------------------------
                 Exploration
                  Discoveries         9.1     4.2     4.3     6.1      736.0
                -------------------------------------------------------------
                 Drilling Extensions  1.4    78.1     2.2     9.1      453.4
                -------------------------------------------------------------
                 Infill Drilling        -       -     1.3    16.2      226.1
                -------------------------------------------------------------
                 Improved recovery      -       -       -       -          -
                -------------------------------------------------------------
                 Economic factors       -       -       -       -          -
                -------------------------------------------------------------
                 Acquisitions        24.7       -     7.9     5.2    1,338.6
                -------------------------------------------------------------
                 Production         (43.6)  (17.4)   (8.9)  (61.3)  (1,612.6)
    -------------------------------------------------------------------------
                 Closing balance     74.9    69.9    30.5   169.3    5,391.9
    -------------------------------------------------------------------------
    Total Proved Opening balance     56.1       -    26.3   201.2    4,648.7
    -------------------------------------------------------------------------
                 Technical revisions 27.3     5.0    (1.7)   (2.3)    (249.7)
                -------------------------------------------------------------
                 Exploration
                  Discoveries        19.9     4.2     6.3     6.1    1,077.2
                -------------------------------------------------------------
                 Drilling
                  Extensions          1.9   168.1     6.3    16.9    1,228.6
                -------------------------------------------------------------
                 Infill Drilling                      1.9    16.2      334.4
                -------------------------------------------------------------
                 Improved recovery      -       -       -       -          -
                -------------------------------------------------------------
                 Economic factors       -       -       -       -          -
                -------------------------------------------------------------
                 Acquisitions        24.7       -     9.3     5.2    1,585.0
                -------------------------------------------------------------
                 Production         (43.6)  (17.4)   (8.9)  (61.3)  (1,612.6)
    -------------------------------------------------------------------------
                 Closing balance     86.2   159.9    39.5   182.0    7,011.6
    -------------------------------------------------------------------------
    Probable     Opening balance     57.6       -     8.0    50.4    1,449.4
    -------------------------------------------------------------------------
                 Technical revisions  6.4       -    (1.5)   (3.3)    (254.7)
                -------------------------------------------------------------
                 Exploration
                  Discoveries         5.6     5.7     5.6     5.4      951.6
                -------------------------------------------------------------
                 Drilling
                  Extensions          2.2    91.3     4.7    18.1      890.6
                -------------------------------------------------------------
                 Infill Drilling        -       -     1.4    10.0      236.7
                -------------------------------------------------------------
                 Improved recovery      -       -       -       -          -
                -------------------------------------------------------------
                 Economic factors       -       -       -       -          -
                -------------------------------------------------------------
                 Acquisitions         3.0       -     3.8     2.8      644.4
                -------------------------------------------------------------
                 Production             -       -       -       -          -
    -------------------------------------------------------------------------
                 Closing balance     74.7    97.0    22.0    83.4    3,918.0
    -------------------------------------------------------------------------
    Proved Plus
     Probable    Opening balance    113.6       -    34.4   251.5    6,098.1
    -------------------------------------------------------------------------
                 Technical
                  revisions          33.7     5.0    (3.2)   (5.6)    (504.4)
                -------------------------------------------------------------
                 Exploration
                  Discoveries        25.5     9.9    11.9    11.5    2,028.8
                -------------------------------------------------------------
                 Drilling
                  Extensions          4.1   259.4    10.9    35.0    2,119.2
                -------------------------------------------------------------
                 Infill Drilling        -       -     3.3    26.3      571.1
                -------------------------------------------------------------
                 Improved recovery      -       -       -       -          -
                -------------------------------------------------------------
                 Economic factors       -       -       -       -          -
                -------------------------------------------------------------
                 Acquisitions        27.7       -    13.2     8.0    2,229.4
                -------------------------------------------------------------
                 Production         (43.6)  (17.4)   (8.9)  (61.3)  (1,612.6)
    -------------------------------------------------------------------------
                 Closing balance    161.0   256.9    61.5   265.4   10,929.6
    -------------------------------------------------------------------------
    Closing balances may be slightly higher than reported Company gross
    reserves due to the inclusion of recoverable royalties.
    -------------------------------------------------------------------------

    The Company was involved in the drilling of 35.4 net wells during 2006
    with a 90% success rate as follows:

                ------------------
                 Gas         24.8
                ------------------
                 Oil            7
                ------------------
                 D&A          3.6
                ------------------
                 Total       35.4
                ------------------
                 Success      90%
                ------------------


    Further information of Iteration's activities is available on the
    Company's website at www.iterationenergy.com
    
    %SEDAR: 00002576E




For further information:

For further information: Brian Illing, President and CEO, Jane
Mactaggart, VP Exploitation, (403) 261-6883

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ITERATION ENERGY LTD.

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