Pine Cliff Energy Ltd. Announces First Quarter Results



    CALGARY, May 28 /CNW/ - Pine Cliff Energy Ltd. (www.pinecliffenergy.com)
(TSX-V:PNE) is pleased to announce its financial and operational results for
the three months ended March 31, 2009.

    
    Highlights

    For the three months ended            March 31  December 31     March 31
                                              2009         2008         2008
    -------------------------------------------------------------------------
    FINANCIAL ($)
    Revenue - Oil and Gas                  193,725      295,944      143,116
    Cash Flow from Operations             (229,307)     (68,211)    (204,923)
      Per Share Basic and Diluted            (0.01)        0.00         0.00
    Net Loss                              (498,532)  (6,423,691)    (317,113)
      Per Share Basic and Diluted            (0.01)       (0.14)       (0.01)
    Capital Expenditures and
     Acquisitions                          119,786    1,067,843      281,388
    Total Assets                         4,966,907    5,570,015   12,221,650
    Working Capital                      1,903,038    2,316,982    7,937,179
    Shareholders' Equity                 4,644,004    5,044,701   12,003,398
    -------------------------------------------------------------------------
    OPERATIONS
    Oil and NGL's  - Barrels Per Day             1            2            4
                   - Average Price
                     ($ per barrel)          48.06        53.46        56.91
    Natural Gas    - MCF Per Day               392          453          168
                   - Average Price
                     ($ per MCF)              5.32         6.92         8.17
    Total Barrels of Oil Equivalent
     (BOE) Per Day(1)                           64           77           32
    -------------------------------------------------------------------------
    (1) Barrels of oil equivalent (BOE) are calculated using a conversion
        ratio of 6 MCF to 1 barrel of oil. The conversion is based on an
        energy equivalency conversion method primarily applicable at the
        burner tip and does not represent a value equivalency at the wellhead
        and as such may be misleading if used in isolation.
    

    Report to Shareholders

    Pine Cliff Energy Ltd. ("Pine Cliff" or "the Company") is pleased to
report its operating and financial results for the three months ended March
31, 2009.
    Pine Cliff realized disappointing drill results in Argentina during 2008
and the potential negative political and economic changes in Argentina
continue to provide a difficult environment in which to operate. In addition,
positive changes in the Canadian energy sector may mean a domestic focus has
once again become more favourable than an international focus.
    With due consideration given to these factors, the Board of Directors and
Management recognize that there is a need to evaluate the overall direction
for the Company and are presently assessing various options and opportunities
available to add value on behalf of shareholders.

    Operations

    During the fourth quarter of 2008, Pine Cliff participated in drilling
one natural gas well (15 percent working interest) in the Sundance area of
Alberta. The well averaged approximately 320 MCF per day net to the Company
during the fourth quarter and anticipated production for 2009 is estimated
between 150 to 200 MCF per day net to Pine Cliff.
    Pine Cliff is giving consideration to participating in one gross
exploration well (0.25 net) in the Laguna de Piedra concession, a property in
Argentina which the Company has deemed highly prospective. Drilling is
expected to take place in late 2009 or early 2010. The Company's share of the
costs to drill well is expected to be approximately $500,000.

    Financial:

    The Company is currently focused on decreasing general and administrative
(G&A) expenses and has reduced its consulting services and other international
expenses in the second quarter of 2009. As a majority of the G&A expenses
relate to its South American activities, a significant reduction in these
costs is anticipated.
    As of March 31, 2009, Pine Cliff had positive working capital of
$1,907,037. These funds will be used to cover the Company's budgeted 2009
capital expenditures of $750,000 in relation to the drilling of its Laguna de
Piedra Concession as well as miscellaneous capital costs in respect of its
Canadian oil and gas operations.

    Outlook

    Pine Cliff is indeed operating within challenging circumstances. However,
the Board of Directors and management remain optimistic that it will be able
to take advantage of the many opportunities that are available and continue to
believe that a domestic perspective may once again be more economic than in
foreign jurisdictions. As such, the Company will take an aggressive approach
in Canada with regard to pursuing acquisitions and other opportunities to add
value.

    FORWARD-LOOKING INFORMATION

    Certain statements contained in this press release include statements
which contain words such as "anticipate", "could", "should", "expect", "seek",
"may", "intend", "likely", "will", "believe" and similar expressions,
statements relating to matters that are not historical facts, and such
statements of our beliefs, intentions and expectations about development,
results and events which will or may occur in the future, constitute
"forward-looking information" within the meaning of applicable Canadian
securities legislation and are based on certain assumptions and analysis made
by us derived from our experience and perceptions. Forward-looking information
in this press release includes, but is not limited to: expected cash provided
by continuing operations; future capital expenditures, including the amount
and nature thereof; oil and natural gas prices and demand; expansion and other
development trends of the oil and natural gas industry; business strategy and
outlook; expansion and growth of our business and operations; and maintenance
of existing customer, supplier and partner relationships; supply channels;
accounting policies; credit risks; and other such matters.
    All such forward-looking information is based on certain assumptions and
analyses made by us in light of our experience and perception of historical
trends, current conditions and expected future developments, as well as other
factors we believe are appropriate in the circumstances. The risks,
uncertainties, and assumptions are difficult to predict and may affect
operations, and may include, without limitation: the risks of foreign
operations; foreign exchange fluctuations; equipment and labour shortages and
inflationary costs; general economic conditions; industry conditions; changes
in applicable environmental, taxation and other laws and regulations as well
as how such laws and regulations are interpreted and enforced; the ability of
oil and natural gas companies to raise capital; the effect of weather
conditions on operations and facilities; the existence of operating risks;
volatility of oil and natural gas prices; oil and gas product supply and
demand; risks inherent in the ability to generate sufficient cash flow from
operations to meet current and future obligations; increased competition;
stock market volatility; opportunities available to or pursued by us; and
other factors, many of which are beyond our control. The foregoing factors are
not exhaustive.
    Actual results, performance or achievements could differ materially from
those expressed in, or implied by, this forward-looking information and,
accordingly, no assurance can be given that any of the events anticipated by
the forward-looking information will transpire or occur, or if any of them do,
what benefits will be derived therefrom. Except as required by law, Pine Cliff
disclaims any intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events or
otherwise.
    The forward-looking information contained herein is expressly qualified
by this cautionary statement.

    
    Quarterly Financial and Operational Highlights

                        2009                       2008
    -------------------------------------------------------------------------
                         1st         4th         3rd         2nd         1st
    Financial ($)
    Revenue - Oil
     and Gas         193,725     295,944     129,537     138,415     143,116
    Cash Flow from
     Operations     (229,307)    (68,211)   (305,368)   (224,141)   (204,923)
      Per Share
       Basic and
       Diluted         (0.01)      (0.00)      (0.01)      (0.00)      (0.00)
    Net Loss        (498,532) (6,423,691)   (505,953)   (295,111)   (317,113)
      Per Share
       Basic and
       Diluted         (0.01)      (0.14)      (0.01)      (0.01)      (0.01)
    Capital
     Expenditures
     and
     Acquisitions    119,786   1,067,843   1,511,745   2,516,214     281,388
    Total Assets   4,966,907   5,570,015  11,621,915  12,043,617  12,221,650
    Working
     Capital       1,903,038   2,316,982   3,440,165   5,278,074   7,937,179
    Shareholders'
     Equity        4,644,004   5,044,701  11,400,311  12,043,617  12,003,398
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Operations
    Oil and
     liquids
     (barrels per
     day)                  1           2           1           -           4
    Natural Gas
     (MCF per day)       392         453         146         142         168
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                   2007
    -------------------------------------------------------------------------
                                     4th         3rd         2nd         1st
    Financial ($)
    Revenue - Oil and Gas        112,685      95,160     176,590     198,515
    Cash Flow from Operations   (234,653)   (172,281)   (262,144)   (115,860)
      Per Share Basic and
       Diluted                     (0.01)      (0.01)      (0.01)      (0.00)
    Net Loss                    (381,561)   (383,540)   (346,274)   (270,109)
      Per Share Basic and
       Diluted                     (0.01)      (0.01)      (0.01)      (0.01)
    Capital Expenditures and
     Acquisitions                193,350     174,289     233,648   2,196,476
    Total Assets              12,445,994   4,173,333   3,946,888   4,211,984
    Working Capital            8,378,110    (314,684)    182,319     602,650
    Shareholders' Equity      12,205,066   3,371,089   3,749,025   4,008,304
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Operations
    Oil and liquids (barrels
     per day)                          2           1           5           7
    Natural Gas (MCF per day)        182         163         226         226
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Production
                                                 Three months ended
                                          March 31, December 31,    March 31,
                                              2009         2008         2008
    -------------------------------------------------------------------------
    Crude oil and NGLs (barrels per day)         1            2            4
    Natural gas (MCF per day)                  392          453          168
    Total BOE per day(1)                        64           77           32
    -------------------------------------------------------------------------
    (1) Barrels of oil equivalent (BOE) are calculated using a conversion
        ratio of 6 MCF to 1 barrel of oil. The conversion is based on an
        energy equivalency conversion method primarily applicable at the
        burner tip and does not represent a value equivalency at the wellhead
        and as such may be misleading if used in isolation.

    During the fourth quarter the Company completed and placed on production
one gross (0.15 net) natural gas well. The well averaged approximately 320 MCF
per day net to the Company during the fourth quarter. Production for 2009 from
this well is 258 MCF per day net to the Company. The Company has an expected
annual decline rate of approximately 20 percent on its other production.

    Revenue

                                                 Three months ended
                                          March 31, December 31,    March 31,
    ($)                                       2009         2008         2008
    -------------------------------------------------------------------------
    Revenue:
      Oil and gas sales                    193,725      295,944      143,116
    Average Realized Prices
      Crude oil and NGLs (per barrel)        48.06        53.46        56.91
      Natural gas (per MCF)                   5.32         6.92         8.17
    -------------------------------------------------------------------------

    Revenue from petroleum and natural gas sales for Q1 2009 increased by
$50,609 from Q1 2008 due to increased production volumes. A decrease in
revenue from Q4 2008 to Q1 2009 was primarily due to lower production volumes
and reduced commodity prices for natural gas. The Company did not have hedging
agreements in either 2009 or 2008 and presently does not have any future
hedging agreements.

    Royalties

                                                 Three months ended
                                          March 31, December 31,    March 31,
    ($)                                       2009         2008         2008
    -------------------------------------------------------------------------
    Crown royalties                         44,556       74,834       34,130
    Gross overriding royalties               4,796       10,204        2,738
    -------------------------------------------------------------------------
    Total royalty expense                   49,352       85,038       36,868
    -------------------------------------------------------------------------

    Crown royalties are higher in the first quarter of 2009 compared to the
first quarter of 2008 due to higher production volumes and revenue. Gross
overriding royalties are also higher for the same reason. Crown and gross
overriding royalties were lower for Q1 2009 compared to Q4 2008 due to lower
commodity prices and production volumes in Q1 2009.

    Interest Income

                                                Three months ended
                                          March 31, December 31,    March 31,
    ($)                                       2009         2008         2008
    -------------------------------------------------------------------------
    Interest income                          5,781       13,580       68,168
    -------------------------------------------------------------------------

    The Company maintains both Canadian and U.S. investment accounts that pay
interest at prime less various percentages as long as the Company maintains
certain minimum account balances. The Company was earning interest at higher
rates and on an increased cash balance throughout the first quarter of 2008.
Interest income for Q1 2009 and Q4 2008 decreased significantly due to the
lower cash balance on hand as $5,377,000 was spent on capital projects in
Canada and Argentina in 2008.

    Production Costs

                                                Three months ended
                                          March 31, December 31,    March 31,
    ($)                                       2009         2008         2008
    -------------------------------------------------------------------------
    Production costs                        57,809       49,159       26,249
    $ per BOE(1)                             10.08         7.27         9.55
    -------------------------------------------------------------------------
    (1) Barrels of oil equivalent (BOE) are calculated using a conversion
        ratio of 6 MCF to 1 barrel of oil. The conversion is based on an
        energy equivalency conversion method primarily applicable at the
        burner tip and does not represent a value equivalency at the wellhead
        and as such may be misleading if used in isolation.

    Production costs were higher in Q1 2009 versus Q1 2008 due to higher
production volumes that result in higher compression and processing costs. The
increase in production costs in the first quarter of 2009 compared to the
fourth quarter of 2008 was due to gas compression and processing cost
adjustments.

    General and Administrative

                                                Three months ended
                                          March 31, December 31,    March 31,
    ($)                                       2009         2008         2008
    -------------------------------------------------------------------------
    G&A expense                            324,997      339,344      282,129
    -------------------------------------------------------------------------

    General and administrative expenditures were similar between Q1 2009 and
Q4 2008. The increase in G&A expenses in Q1 2009 compared to Q1 2008 is
primarily due to continuous disclosure costs and contractor fees for services
provided to the Company's South American activities. The majority of the G&A
expenses pertain to the Company's operations in Argentina. With the
unsuccessful completion of the three-well drill program on the Canadon Ramirez
Concession, the Company's Board of Directors and management are reviewing the
Company's involvement in Argentina and have reduced its consulting services
and other international expenses in Q2 2009.
    Pine Cliff does not have any employees at the present time but has engaged
Bonterra Energy Corp. (Bonterra Corp) a related party (see Related Party
section), to provide management services and engage the services of
consultants on a contract or temporary basis. Pine Cliff's subsidiary
CanAmericas Energy Ltd. (CanAmericas) has also engaged the consulting services
of an individual professional as senior management and officer of CanAmericas.

    Foreign Exchange Loss (Gain)

                                                Three months ended
                                          March 31, December 31,    March 31,
    ($)                                       2009         2008         2008
    -------------------------------------------------------------------------
    Foreign exchange loss (gain)             7,043      (71,892)      (2,310)
    -------------------------------------------------------------------------

    The Company maintains foreign denominated bank accounts to facilitate its
foreign operations. The loss on foreign exchange in Q1 2009 relates to the
appreciation of the Canadian dollar with the Argentine pesos. The first and
fourth quarter gain on foreign exchange relates to the depreciation of the
Canadian dollar with the U.S. dollar.

    Stock-Based Compensation

                                                Three months ended
                                          March 31, December 31,    March 31,
    ($)                                       2009         2008         2008
    -------------------------------------------------------------------------
    Stock based compensation                97,834       68,081      115,445
    -------------------------------------------------------------------------
    

    The Company has a stock-based compensation plan. The Company records a
compensation expense over the vesting period based on the fair value of
options granted to employees of the management company (see section "Related
Party Transactions"), directors and service providers in respect of the
Company. No new options were issued in the first quarter of 2009. Of the
options outstanding as of March 31, 2009, $42,500 of stock-based compensation
is remaining to be expensed in 2009.

    Depletion, Depreciation, and Accretion and Dry Hole Exploration Costs

    During the first quarter of 2009, the Company expensed $106,540 (2008 -
$65,469) for depletion, depreciation and accretion of its property and
equipment. The increase is related to increased production volumes in the
first quarter of 2009. The fourth quarter of 2008 had a slightly higher
depletion, depreciation and accretion amount of $129,129 due to slightly
higher production. The fourth quarter of 2008 also had $6,171,140 of capital
costs expensed to dry hole costs as the three well exploration program on the
Canadon Ramirez Concession in Argentina was unsuccessful. No amounts were
expensed to dry hole costs in 2009.

    Income Taxes

    The Company follows the liability method of accounting for income taxes
under which the income tax provision is based on the temporary differences in
the accounts calculated using income tax rates expected to apply in the year
in which the temporary differences will reverse. The Company has sufficient
tax pools such that it is not liable for current income tax. However the
Company is subject to a one percent Argentina capital tax on assets in
Argentina. These amounts are deductible from future income earned in
Argentina.
    The Company has the following tax pools which can be used to reduce
future taxable income:

    
                                                       Rate of
                                                 Utilization %        Amount
    -------------------------------------------------------------------------
    Undepreciated capital costs                             25  $    393,268
    Foreign exploration expenditures                        10     5,815,989
    Share issue costs                                       20        71,018
    Canadian exploration expenditures                      100       392,110
    Canadian development expenditures                       30       544,084
    Canadian oil and gas expenditures                       10       575,231
    Non-capital loss carry forward(*)                      100     4,098,164
    -------------------------------------------------------------------------
                                                                 $11,889,864
    -------------------------------------------------------------------------
    (*) $377,869 expires 2026, $929,726 expires 2027, $1,955,891 expires in
        2028 and $834,678 expires in 2029

    Non-Controlling Interest

    A private foreign company (Foreign Corp.) owns seven percent of
CanAmericas Energy Ltd. (CanAmericas), a 93 percent owned subsidiary of Pine
Cliff. In 2008, losses in CanAmericas exceeded the non-controlling interest
investment and therefore none of CanAmericas' loss in 2009 was allocated to
the non-controlling interest.

    Loss

                                                 Three months ended
                                          March 31, December 31,    March 31,
    ($)                                       2009         2008         2008
    -------------------------------------------------------------------------
    Loss                                   498,532    6,423,691      317,113
    Loss per share                            0.01         0.14         0.00
    -------------------------------------------------------------------------

    The increase in the first quarter loss of 2009 compared to Q1 2008 was
predominantly due to decreased interest income, increased depletion costs and
increased general and administrative costs. The decrease in the Q1 2009 loss
compared to Q4 2008 loss was predominantly due to the provision for dry hole
costs of $6,171,140 relating to the unsuccessful exploration drill program on
the Canadon Ramirez Concession in the fourth quarter of 2008.

    Cash Flow from Operations

                                                 Three months ended
                                          March 31, December 31,    March 31,
    ($)                                       2009         2008         2008
    -------------------------------------------------------------------------
    Cash flow from operations             (229,307)     (68,211)    (204,923)
    Cash flow from operations per share      (0.01)       (0.00)       (0.00)
    -------------------------------------------------------------------------
    

    Cash flow deficiency increased in the first quarter of 2009 compared to
Q1 2008 as the Company had decreased interest income, increased general and
administrative costs and increased production costs which were partially
offset by higher oil and gas sales and a reduction in non-cash working capital
adjustments. The reduction in cash flow from Q1 2009 compared to Q4 2008 was
primarily due to decreased oil and gas sales.

    Related Party Transactions

    Pine Cliff has a management agreement with Bonterra Corp, a wholly owned
subsidiary of Bonterra Oil & Gas Ltd. (a company with common directors and
management with Pine Cliff), to have Bonterra Corp provide executive services
(President and CEO, CFO and COO), accounting services, oil and gas
administration and office administration. The management fee consists of a
monthly fee of $10,000 (2008 - $19,800), three percent of net earnings before
income taxes plus minor general and administrative expenses incurred by
Bonterra that were specifically attributable to Pine Cliff. Total fees for
2009 were $30,000 (2008 - $59,400). As at March 31, 2009, amounts owing to
Bonterra Corp were $64 (December 31, 2008 - $592).

    Commitments

    The Company has a related party management agreement with Bonterra Corp
that can be cancelled by giving 90 days notice.

    Liquidity and Capital Resources

    As of March 31, 2009, Pine Cliff had positive working capital of
$1,907,037 (December 31, 2008 - $2,316,982). These funds will be used to cover
the Company's budgeted 2009 capital expenditures of $750,000 in relation to
the drilling of its Laguna de Piedra Concession if it is drilled in 2009 as
well as miscellaneous capital costs in respect of its Canadian oil and gas
operations. The Company is currently focusing on reducing general and
administrative expenses related to its Argentina operations.


    
       The following consolidated financial statements and notes to the
    consolidated financial statements have been provided for further details.


    Consolidated Balance Sheets

    As at March 31, 2009 (unaudited) and December 31, 2008

                                                         2009           2008
    -------------------------------------------------------------------------
    Assets
    Current
      Cash                                        $ 2,013,898    $ 2,624,556
      Accounts receivable                              92,979        107,200
      Prepaid expenditures                             37,114         29,602
    -------------------------------------------------------------------------
                                                    2,143,991      2,761,358
    -------------------------------------------------------------------------
    Property and Equipment (Note 5)
      Property and equipment                        3,998,337      3,878,550
      Accumulated depletion and depreciation       (1,175,421)    (1,069,893)
    -------------------------------------------------------------------------
    Net Property and Equipment                      2,822,916      2,808,657
    -------------------------------------------------------------------------
                                                   $4,966,907     $5,570,015
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Liabilities
    Current
      Accounts payable and accrued liabilities       $240,954       $444,376

    Asset Retirement Obligations                       81,950         80,938
    Non-Controlling Interests (Note 4)                      -              -
    -------------------------------------------------------------------------
                                                      322,904        525,314
    -------------------------------------------------------------------------
    Commitments
    Shareholders' Equity
      Share capital (Note 7)                       14,588,722     14,588,722
      Contributed surplus                             820,802        722,968
      Deficit                                     (10,765,521)   (10,266,989)
      Accumulated other comprehensive income                -              -
    -------------------------------------------------------------------------
                                                    4,644,003      5,044,701
    -------------------------------------------------------------------------
                                                   $4,966,907     $5,570,015
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated Statements of Loss,
    Comprehensive Loss and Deficit

    For the three months ended March 31 (unaudited)

                                                         2009           2008
    -------------------------------------------------------------------------
    Revenue
      Oil and gas sales                              $193,725       $143,116
      Royalties                                       (49,352)       (36,868)
      Interest income                                   5,781         68,168
    -------------------------------------------------------------------------
                                                      150,154        174,416
    -------------------------------------------------------------------------
    Expenses
      Production costs                                 57,809         26,249
      General and administrative                      324,997        282,129
      Foreign exchange loss (gain)                      7,043         (2,310)
      Stock based compensation                         97,834        115,445
      Depletion, depreciation and accretion           106,540         65,469
    -------------------------------------------------------------------------
                                                      594,223        486,982
    -------------------------------------------------------------------------
    Loss Before Taxes and Non-Controlling Interests  (444,069)      (312,566)
    -------------------------------------------------------------------------
    Taxes (Note 6)
      Current                                          54,463         27,889
      Future                                                -              -
    -------------------------------------------------------------------------
                                                       54,463         27,889
    -------------------------------------------------------------------------
    Loss before Non-Controlling Interests            (498,532)      (340,455)
    Loss applicable to non-controlling interests
     (Note 4)                                               -         23,342
    -------------------------------------------------------------------------
    Loss and Comprehensive Income for the Period     (498,532)      (317,113)
    Deficit, Beginning of Period                  (10,266,989)    (2,725,121)
    -------------------------------------------------------------------------
    Deficit, End of Period                       ($10,765,521)   ($3,042,234)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Loss Per Share - Basic and Diluted                 ($0.01)        ($0.01)
    -------------------------------------------------------------------------

    Weighted Average Common Shares
      Basic                                        45,275,695     45,275,695
      Diluted                                      45,477,048     46,133,294
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated Statements of Cash Flow

    For the three months ended March 31 (unaudited)

                                                         2009           2008
    -------------------------------------------------------------------------
    Operating Activities
      Loss for the period                           ($498,532)     ($317,113)
      Items not affecting cash
        Stock based compensation                       97,834        115,445
        Depletion, depreciation and accretion         106,540         65,469
        Foreign exchange loss (gain)                        -         (2,310)
        Loss applicable to non-controlling interests        -        (23,342)
    -------------------------------------------------------------------------
                                                     (294,158)      (161,851)
    -------------------------------------------------------------------------
      Change in non-cash working capital
        Accounts receivable                            14,221        (34,543)
        Prepaid expenditures                           (7,512)        (5,059)
        Accounts payable and accrued liabilities       58,142         (3,470)
    -------------------------------------------------------------------------
                                                       64,851        (43,072)
    -------------------------------------------------------------------------
    Cash Used in Operating Activities                (229,307)      (204,923)
    -------------------------------------------------------------------------
    Financing Activities                                    -              -
    -------------------------------------------------------------------------
    Cash Provided by Financing Activities                   -              -
    -------------------------------------------------------------------------
    Investing Activities
      Property and equipment expenditures            (119,786)      (281,388)
      Proceeds on disposal of restricted term
       investments                                          -      2,689,601
      Change in non-cash working capital
        Accounts payable and accrued liabilities     (261,565)         3,704
    -------------------------------------------------------------------------
    Cash Provided by (Used in) Investing Activities  (381,351)     2,411,917
    -------------------------------------------------------------------------
    Foreign Exchange (Loss) Gain on Cash Held in
     Foreign Currency                                       -          2,310
    -------------------------------------------------------------------------
    Net Cash Inflow (Outflow)                        (610,658)     2,209,304
    Cash, Beginning of Period                       2,624,556      5,769,448
    -------------------------------------------------------------------------
    Cash, End of Period                           $ 2,013,898    $ 7,978,752
    -------------------------------------------------------------------------

    Cash interest paid                            $         -    $         -
    Cash taxes paid                               $     7,717    $         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Notes to the Consolidated Financial Statements
    Periods ended March 31, 2009 and 2008 (unaudited)

    1.  SIGNIFICANT ACCOUNTING POLICIES

        The accounting policies and methods of application followed in the
        preparation of the interim financial statements are the same as those
        followed in the preparation of Pine Cliff Energy Ltd.'s (the Company
        or Pine Cliff) 2008 annual financial statements except as described
        below. These interim financial statements do not include all
        disclosures required for annual financial statements. The interim
        financial statements as presented should be read in conjunction with
        the 2008 annual financial statements.

        In February 2008, the Canadian Institute of Chartered Accountants
        (CICA) issued Section 3064, "Goodwill and intangible assets",
        replacing Section 3062, "Goodwill and other intangible assets" and
        Section 3450, "Research and development costs". Various changes have
        been made to other sections of the CICA Handbook for consistency
        purposes. The new Section is applicable to financial statements
        relating to fiscal years beginning on or after October 1, 2008.
        Accordingly, the Company adopted the new standards for its fiscal
        year beginning January 1, 2009. It establishes standards for the
        recognition, measurement, presentation and disclosure of goodwill
        subsequent to its initial recognition and of intangible assets by
        profit-orientated enterprises. Standards concerning goodwill are
        unchanged from the standards included in the previous Section 3062.
        The adoption of this Standard did not have an impact on the
        Consolidated Financial Statements.

        In January 2009, the CICA issued EIC-173, "Credit Risk and the Fair
        Value of Financial Assets and Financial Liabilities". The EIC
        provides guidance on how to take into account credit risk of an
        entity and counterparty when determining the fair value of financial
        assets and financial liabilities, including derivative instruments.
        This standard is effective for the Company's fiscal periods ending on
        or after January 20, 2009 with retrospective application. The
        application of this EIC did not have a material effect on the
        Consolidated Financial Statements.

        Effective January 1, 2009, the Company prospectively adopted the
        Canadian Institute of Chartered Accountants (CICA) Section 1582,
        "Business Combinations", which replaces former guidance on business
        combinations. Section 1582 establishes principles and requirements of
        the acquisition method for business combinations and related
        disclosures. The adoption of this Standard did not have an impact on
        the Consolidated Financial Statements.

        Effective January 1, 2009, the Company prospectively adopted CICA
        Sections 1601, "Consolidated Financial Statements", and 1602, "Non-
        controlling Interests", which replaces existing guidance. Section
        1601 establishes standards for the preparation of consolidated
        financial statements. Section 1602 provides guidance on accounting
        for a non-controlling interest in a subsidiary in consolidated
        financial statements subsequent to a business combination. The
        adoption of this Standard did not have an impact on the Consolidated
        Financial Statements.

        Recent Accounting Pronouncements

        The Accounting Standards Board has confirmed the convergence of
        Canadian GAAP with International Financial Reporting Standards (IFRS)
        will be effective January 1, 2011. The Company has performed an
        initial scoping process in order to ensure successful implementation
        within the required timeframe. The impact on the Company's
        consolidated financial statements is not reasonably determinable at
        this time. Key information will be disclosed as it becomes available
        during the transition period.

    2.  BANKING AGREEMENT

        The Company has a line of credit through its subsidiary CanAmericas
        to the lower of its available amount of cash or US $3,690,000, which
        can be drawn by means of letters of guarantee and letters of credit.
        The line of credit may be cancelled without notice. No letters of
        guarantee or credit are currently outstanding.

    3.  RELATED PARTY TRANSACTIONS

        Bonterra Oil & Gas Ltd. ("Bonterra O&G") an oil and gas corporation
        publicly traded on the Toronto Stock Exchange with common directors
        and management with Pine Cliff and a former parent of the Company,
        through its wholly owned subsidiary Bonterra Energy Corp. ("Bonterra
        Corp") provides management services and office administration to the
        Company. Total fees for the three month period were $30,000 (2008 -
        $59,400) plus minimal administrative costs. As of March 31, 2009 Pine
        Cliff owed Bonterra Corp $64 (December 31, 2008 - $592).

        These transactions are in the normal course of operations and are
        measured at the exchange amount, which is the amount of consideration
        established and agreed to by the related parties.

    4.  NON-CONTROLLING INTERESTS

        The Company has incorporated a subsidiary company, CanAmericas Energy
        Ltd. ("CanAmericas") to explore and develop oil and gas properties
        primarily in South America. CanAmericas is owned 93 percent by the
        Company and seven percent by a foreign private corporation ("Foreign
        Corp."). CanAmericas was initially financed by investments of
        $1,400,000 U.S. for 5,600,000 common shares from the Company and
        $100,000 U.S. for 400,000 common shares from Foreign Corp.

        Changes to non-controlling interest were as follows:

                                                     March 31,   December 31,
                                                         2009           2008
        ---------------------------------------------------------------------
        Non-controlling interest, January 1       $         -    $    25,179
        Loss applicable to non-controlling
         interest                                ($         -)       (25,179)
        ---------------------------------------------------------------------
        Non-controlling interest, end of period   $         -    $         -
        ---------------------------------------------------------------------

        Foreign Corp. has been granted an option to acquire an additional
        1,000,000 common shares of CanAmericas at $0.25 U.S. per common
        share. Fifty percent of the options vested on January 13, 2007, and
        the remaining 50% vested on January 13, 2008, and all of the options
        will expire on January 13, 2011.

    5.  PROPERTY AND EQUIPMENT

                                    March 31, 2009         December 31, 2008
        ---------------------------------------------------------------------
                                       Accumulated               Accumulated
                                         Depletion                 Depletion
                                               and                       and
                                 Cost  Depreciation        Cost  Depreciation
        ---------------------------------------------------------------------
        Petroleum and
         natural gas
         properties and
         related
         equipment         $3,944,825   $1,145,005   $3,825,038   $1,041,902
        Furniture,
         equipment and
         other                 53,512       30,416       53,512       27,991
        ---------------------------------------------------------------------
                           $3,998,337   $1,175,421   $3,878,550   $1,069,893
        ---------------------------------------------------------------------

        Exploration costs of $1,384,487 included in petroleum and natural gas
        properties and related equipment presently have been excluded from
        costs subject to depletion and depreciation.

    6.  TAXES

        The Company has accrued $54,463 current tax expense related to
        Argentina capital tax. A 1% Argentina capital tax is payable in
        respect of the exploration costs for the Canadon Ramirez and the
        Laguna de Piedra Concessions.

        The Company continues to record a full valuation allowance for its
        future income tax assets as the recoverability is uncertain.

    7.  SHARE CAPITAL

        Authorized

        Unlimited number of Common Shares without nominal or par value.

        Unlimited number of Class B Preferred Shares without nominal or par
        value which may be issued in one or more series.

        Issued                                         Number         Amount
        ---------------------------------------------------------------------
        Common Shares
        Balance, January 1, 2009                   45,275,695    $14,588,722
        ---------------------------------------------------------------------
        Balance, March 31, 2009                    45,275,695    $14,588,722
        ---------------------------------------------------------------------

        A summary of the changes to the Company's contributed surplus is
        presented below:

        Contributed surplus

        ($)                                              2009           2008
        ---------------------------------------------------------------------
        Balance, January 1                            722,968        341,465
        Stock-based compensation expensed
         (non-cash)                                    97,834        115,445
        ---------------------------------------------------------------------
        Balance, March 31                             820,802        456,910
        ---------------------------------------------------------------------

        The deficit balance is composed of accumulated earnings.

        A summary of the status of the Company's stock option plan as of
        March 31, 2009 and December 31, 2008, and changes during the three
        month and twelve month periods ending on those dates is presented as
        follows:

                                      March 31, 2009          March 31, 2008
        ---------------------------------------------------------------------
                                           Weighted-               Weighted-
                                             Average                 Average
                                            Exercise                Exercise
                                 Options       Price     Options       Price
        ---------------------------------------------------------------------
        Outstanding at
         beginning of period   3,118,000       $0.63   3,053,000       $0.62
        Options granted                -           -      65,000        1.15
        Options exercised              -           -           -           -
        Options cancelled         12,000        1.15           -           -
        ---------------------------------------------------------------------
        Outstanding at
         end of period         3,106,000       $0.62   3,118,000       $0.63
        ---------------------------------------------------------------------
        Options exercisable
         at end of period      2,022,500       $0.34   2,003,500       $0.33
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The following table summarizes information about stock options
        outstanding at March 31, 2009:

                      Options Outstanding                Options Exercisable
    -------------------------------------------------------------------------
                                Weighted-
                                  Average   Weighted-              Weighted-
    Range of          Number    Remaining    Average       Number    Average
    Exercise     Outstanding  Contractual   Exercise  Exercisable   Exercise
    Prices        at 3/31/09         Life      Price   at 3/31/09      Price
    -------------------------------------------------------------------------
    $0.15          1,090,000    0.8 years      $0.15    1,090,000      $0.15
     0.50 - 0.60     825,000    0.8 years       0.51      825,000       0.51
     0.70 - 0.75      80,000    0.8 years       0.72       80,000       0.72
     1.10 - 1.20   1,071,000    1.2 years       1.18        7,500       1.18
     1.40 - 1.50      40,000    1.8 years       1.49       20,000       1.49
    -------------------------------------------------------------------------
    $0.15 - $1.50  3,106,000    1.0 years      $0.62    2,022,500      $0.34
    -------------------------------------------------------------------------

        The Company records a compensation expense over the vesting period
        based on the fair value of options granted to employees, directors
        and consultants. Unvested options as of March 31, 2009 vest 1,026,000
        in 2009 and 57,500 in 2010.

    8.  SEGMENTED INFORMATION

        The Company has operations in Canada and in South America.  All
        operating activities are related to exploration, development and
        production of petroleum and natural gas:

                                                           South
        ($)                                   Canada     America       Total
        ---------------------------------------------------------------------
        March 31, 2009
        Revenue, gross                       197,748       1,758     199,506
        Loss before non-controlling
         interest                            182,880     315,652     498,532
        Capital expenditures                   1,448     118,338     119,786
        Property and equipment             1,315,038   1,507,878   2,822,916
        Total assets                       3,264,287   1,702,620   4,996,907

        March 31, 2008
        Revenue, gross                       191,226      20,058     211,284
        Loss before non-controlling
         interest                            154,203     186,252     340,455
        Capital expenditures                   7,426     273,962     281,388

        December 31, 2008
        Property and equipment             1,416,693   1,391,964   2,808,657
        Total assets                       3,884,908   1,685,107   5,570,015
        ---------------------------------------------------------------------

    9.  FINANCIAL AND CAPITAL RISK MANAGEMENT

        Financial Risk Factors
        ----------------------

        The Company undertakes transactions in a range of financial
        instruments including:

        -  Cash deposits;
        -  Receivables;
        -  Payables;

        The Company's activities result in exposure to a number of financial
        risks including market risk (commodity price risk, interest rate
        risk, foreign exchange risk, credit risk, and liquidity risk).
        Financial risk management is carried out by senior management under
        the direction of the Board of Directors.

        The Company does not enter into risk management contracts.  The
        Company sells its oil and gas commodities at market prices at the
        date of sale in accordance with the Board directive.

        Capital Risk Management
        -----------------------

        The Company's objectives when managing capital are to safeguard the
        Company's ability to continue as a going concern, to continue
        providing returns to its Shareholders and benefits for other
        stakeholders, and to maintain an optimal capital structure to reduce
        the cost of capital. In order to maintain or adjust the capital
        structure, the Company may issue debt or new shares.

        The Company monitors capital on the basis of the ratio of budgeted
        exploration capital requirements to current working capital. This
        ratio is calculated using the projected cash requirements for a year
        in advance and maintaining a working capital balance of at least six
        months to satisfy this requirement on a continuous basis.

        The Company believes that maintaining approximately a six month
        current working capital balance to the exploration capital budget
        requirement is an appropriate basis to allow it to continue its
        future development of the Company's assets.

        The following section (a) of this note provides a summary of our
        underlying economic positions as represented by the carrying values,
        fair values and contractual face values of our financial assets and
        financial liabilities. The Company's working capital to capital
        expenditure requirement ratio is also provided.

        The following section (b) addresses in more detail the key financial
        risk factors that arise from the Company's activities including its
        policies for managing these risks.

    a)   Financial assets, financial liabilities

        The carrying amounts, fair value and face values of the Company's
        financial assets and liabilities other than cash are shown in
        Table 1.

        Table 1
                                             As at March 31, 2008
        ($000)                    Carrying Value    Fair Value    Face Value
        ---------------------------------------------------------------------
        Financial assets
        Accounts receivable                   93            93           145
        Financial liabilities
        Accounts payable and
         accrued liabilities                 237           237           237
        ---------------------------------------------------------------------

        The budgeted capital expenditure to working capital base figures for
        March 31, 2009 is presented below:

        ($000)                                                March 31, 2009
        ---------------------------------------------------------------------
        Budgeted capital expenditure(1)                                  750
        ---------------------------------------------------------------------
        Current assets                                                 2,144
        Current liabilities                                             (241)
        ---------------------------------------------------------------------
        Working capital                                                1,903
        ---------------------------------------------------------------------
        Working capital to budgeted capital
         expenditure (in months)                                        30.5
        ---------------------------------------------------------------------

        (1) Budgeted capital expenditure represents the Company's estimated
            future twelve month capital expenditures.

    b)  Risks and mitigations

        Market risk is the risk that the fair value or future cash flow of
        the Company's financial instruments will fluctuate because of changes
        in market prices. Components of market risk to which Pine Cliff is
        exposed are discussed below.

        Commodity price risk
        --------------------

        The Company's principal operation is the exploration and possible
        development of its oil and gas properties in Argentina. The Company
        also engages in the exploration and development of oil and natural
        gas properties in Canada. Fluctuations in prices of these commodities
        may directly impact the Company's performance and ability to continue
        with its operations.

        The Company's management currently does not use risk management
        contracts to set price parameters for its production.

        Sensitivity Analysis

        The Company is still in the exploration stage of development of its
        exploration properties and as such generates nominal cash flow or
        earnings from these properties. In addition, the Company's petroleum
        and natural gas operations provide only moderate cash flow and as
        such changes in commodity would have no material impact on the
        Company.

        Interest rate risk
        ------------------

        Interest rate risk refers to the risk that the value of a financial
        instrument or cash flow associated with the instrument will fluctuate
        due to changes in market interest rates. Interest rate risk arises
        from interest bearing financial assets and liabilities that Pine
        Cliff uses. The principal exposure to the Company is on its cash
        balances which have a variable interest rate which gives rise to a
        cash flow interest rate risk.

        Pine Cliff's cash consists of Canadian dollar, US dollar and
        Argentinean Pesos investment chequing accounts. Since these funds
        need to be accessible for the development of the Company's capital
        projects, management does not reduce its exposure to interest rate
        risk through entering into term contracts of various lengths. As
        discussed above, the Company generally manages its capital such that
        its budgeted capital requirements to current working capital ratio
        are at least six months.

        Foreign exchange risk
        ---------------------

        The Company has foreign operations, but no revenue from production
        from the foreign properties and currently sells all of its Canadian
        product sales in Canadian currency. The Company has a US cash and
        Argentina Pesos cash balance and earns an insignificant amount of
        interest on its US and Argentinean Pesos bank accounts. Funds held in
        foreign denominated accounts are generally held for short periods of
        time, as the Company transfers and converts Canadian funds to foreign
        currency as payments for foreign currency denominated payables come
        due. As such, Pine Cliff does not mitigate exchange rate risk by
        using risk management contracts.

        Credit risk
        -----------

        Credit risk is the risk that a contracting party will not complete
        its obligations under a financial instrument and cause the Company to
        incur a financial loss. Pine Cliff is exposed to credit risk on all
        financial assets included on the balance sheet. To help mitigate this
        risk, the Company maintains the majority of its cash balances with a
        major Canadian chartered bank and invests in secure financial
        instruments.

        Substantially all of the accounts receivable balance at March 31,
        2009 ($93,000) and December 31, 2008 ($107,000) relates to product
        sales with Canadian oil and gas companies and interest income from
        major Canadian chartered banks, all of which have consistently been
        received within 30 to 60 days. The Company through its subsidiary
        CanAmericas also has a receivable of $52,000 for Argentina Value
        Added Tax on non-capital expenditures. The Company has taken a full
        allowance on the V.A.T., as the Company has no Argentina income
        subject to V.A.T. to claim it against.

        The Company assesses quarterly if there has been any impairment of
        the financial assets of the Company. The Company does not have any
        significant credit risk exposure to any single counterparty or any
        group of counterparties having similar characteristics.

        The carrying value of accounts receivable approximates their fair
        value due to the relatively short periods to maturity on this
        instrument. Currently no accounts receivable is greater than 90 days.
        The maximum exposure to credit risk is represented by the carrying
        amount on the balance sheet. There are no material financial assets
        that the Company considers past due.

        Liquidity risk
        --------------

        Liquidity risk includes the risk that, as a result of Pine Cliff's
        operational liquidity requirements:

        -  The Company will not have sufficient funds to settle a transaction
           on the due date,

        -  Pine Cliff will not have sufficient funds to continue with its
           financing of its major exploration projects,

        -  The Company will be forced to sell assets at a value which is less
           than what they are worth, or

        -  Pine Cliff may be unable to settle or recover a financial asset at
           all.

        To help reduce these liquidity risks, the Company:

        -  Has a general capital policy of maintaining at least six months of
           budgeted capital requirements as its working capital base.

        -  Maintains a continuous evaluation approach as to the requirements
           for its largest exploration programs; the Canadon Ramirez
           Concession and Laguna de Piedra Concession.


    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.
    
    %SEDAR: 00021536E




For further information:

For further information: Further information relating to the Company may
be found on www.sedar.com as well as on the Company's website at
www.pinecliffenergy.com or by contacting: George F. Fink, President and CEO,
Randy M. Jarock, COO, or Kirsten Kulyk, Manager, Investor Relations,
Telephone: (403) 269-2289, Fax: (403) 265-7488, Email:
info@pinecliffenergy.com

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Pine Cliff Energy Ltd.

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