ProspEx Resources Ltd. Provides Operational Update



    CALGARY, Aug. 27 /CNW/ - ProspEx Resources Ltd. ("ProspEx" or the
"Company") is announcing an update to the Company's operations.
    With the continued weakness in the natural gas markets, the Company today
is announcing that it is shutting-in an additional 600 barrels of oil
equivalent ("boe") per day of production over the 500 boe per day previously
announced in the Company's second quarter press release. The total curtailment
of 1,100 boe per day represents 42% of the Company's current total net
production capacity of 2,600 boe per day. The production is to be curtailed
until natural gas prices improve and it is anticipated that this curtailment
will last at least until November 1, 2009.
    ProspEx intends to maintain production in its core operating areas of
Kakwa in the Deep Basin and Ricinus and Harmattan in West Central Alberta,
with the majority of its production outside of these areas curtailed until
natural gas prices improve. The Company believes that curtailing this
production until prices improve will better maximize shareholder value.
    ProspEx estimates the total cash flow impact of this 600 boe per day
production curtailment for the two month period ending November 1, 2009 would
result in a reduction of cash flow of $0.4 million, assuming current forward
prices for natural gas. Please be advised that guidance regarding the
anticipated reduction in cash flow may constitute a "financial outlook" as
contemplated by National Instrument 51-102 of the Canadian Securities
Administrators entitled Disclosure Obligations ("NI 51-102"). The purpose of
such financial outlooks is to forecast the anticipated reduction in cash flow
resulting from the planned production curtailment described above. Please be
advised that the information may not be appropriate for other purposes.

    Reader's Advisory

    ProspEx is a Calgary based junior oil and gas company focused on
exploration for natural gas in the Western Canadian Sedimentary Basin.
    Certain information contained in this press release constitutes
forward-looking information or statements including, without limitation,
information and statements respecting: anticipated cash flow, capital
expenditures, production forecasts, production additions and deletions,
reserves and resources additions and deletions, additions to and deletions
from the Company's historical and future capital programs, acquisitions or
dispositions, operating expenses, G&A, royalties, expected timing of the
tie-in of wells, expected timing of the receipt of regulatory approvals and
expected timing of the completion of facilities projects.

    Forward-looking information and statements are often, but not always,
identified by the use of words such as "anticipate", "seek", "believe",
"expect", "hope", "plan", "intend", "forecast", "target", "project",
"guidance", "may", "might", "will", "should", "could", "estimate", "predict"
or similar words or expressions suggesting future outcomes or language
suggesting an outlook. By their very nature, forward-looking information and
statements involve inherent risks and uncertainties, both general and
specific, and risks that predictions, forecasts, projections and other
forward-looking information and statements will not be achieved. We caution
readers not to place undue reliance on these statements as a number of
important factors could cause the actual results to vary materially from the
forward-looking information or statements. These factors include, but are not
limited to: the volatility of oil and gas prices; production and development
costs and capital expenditures; the imprecision of reserve and resource
estimates and estimates of recoverable quantities of oil, natural gas and
liquids; the Company's ability to replace and expand oil and gas reserves;
environmental claims and liabilities; incorrect assessments of value when
making acquisitions or dispositions; increases in debt service charges; the
loss of key personnel; the marketability of production; defaults by third
party operators; unforeseen title defects; fluctuations in foreign currency
and exchange rates; adequacy of insurance coverage; compliance with
environmental laws and regulations; changes in tax and royalty laws; the
Company's ability to access external sources of debt and equity capital; and
the Company's ability to obtain equipment in a timely manner to carry out
development activities. Further information regarding these factors may be
found under the headings "Risk Factors" and "Industry Conditions" in the
Company's most recent Annual Information Form, under the heading "Business
Risks" in the Company's Management's Discussion and Analysis for the year
ended December 31, 2008, and in the Company's most recent consolidated
financial statements, management information circular, quarterly reports,
material change reports and news releases available under the Company's
profile on SEDAR (www.sedar.com). Readers are cautioned that the foregoing
list of factors that may affect future results is not exhaustive. When relying
on our forward-looking statements to make decisions with respect to the
Company, investors and others should also carefully consider information set
forth in the section "Forward-Looking Information" of the Company's most
recent Annual Information Form respecting the assumptions upon which the
Company bases certain forward-looking information and the uncertainties
inherent in such assumptions.
    The Company does not assume responsibility for the accuracy and
completeness of the forward-looking information or statements and such
information and statements should not be taken as guarantees of future
outcomes. Subject to applicable securities laws, the Company does not
undertake any obligation to revise these forward-looking information or
statements to reflect subsequent events or circumstances. Furthermore, the
forward-looking information contained in this press release are made as of the
date of this document and the Company does not undertake any obligation to
update publicly or to revise any of the included forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by applicable law. The forward-looking information and statements
contained in this press release are expressly qualified by this cautionary
statement.
    For the purposes of this press release, boe have been calculated on the
basis of six thousand cubic feet of gas to one barrel of oil. The term boe may
be misleading, particularly if used in isolation. A boe conversion ratio of
six thousand cubic feet to one barrel is based on an energy equivalency
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.
    Netbacks are calculated by subtracting transportation costs, royalties
payable and operating costs from the average price received during the period.

    %SEDAR: 00021285E




For further information:

For further information: John Rossall, President & Chief Executive
Officer, jrossall@psx.ca, (403) 268-3940; or George Yee, Vice President
Finance and Chief Financial Officer, gyee@psx.ca, (403) 268-3940

Organization Profile

PROSPEX RESOURCES LTD.

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