Reece Energy announces second quarter results, achieves record profit and cash flow



    MEDICINE HAT, AB, Aug. 29 /CNW/ - Reece Energy Exploration Corp.
(TSX-V/RXR) ("Reece" or the "Corporation") is pleased to provide the results
for the second quarter of 2008. Some of the more salient year over year
highlights include:

    
    -   increased revenues by 139%;
    -   increased profit by 424% to 1,133,251 from -$347,831;
    -   increased cash flow from operations by 351% to $4,862,531 from
        $1,078,491;
    -   average production for the quarter increased by 37%;
    -   completed a private placement financing for $7.5 million;
    -   increased the Corporation's credit facility by $7 million to
        $20 million;
    -   drilled nine (9.0 net) extended reach, multi-stage fractured,
        horizontal wells in the Dodsland field with a 100% success rate;
    -   acquired more land in the Dodsland field on which to drill further
        horizontal wells; and
    -   drilled the first two (1.0 net) horizontal wells on Reece's Bakken
        land.
    

    Reece's growth continued in the second quarter of 2008 through further
drilling at Dodsland and Crystal Hill, as well as the start of its exploratory
Bakken project. A total of 12 (10.33 net) wells were drilled during the
quarter achieving a 95% success rate.
    As a result of the new drilling, Reece's average production for the
quarter was up by 276 BOE/d or 37% to 1,016 BOE/d over 2007 and by 11% to
98 BOE/d over the first quarter of 2008. Reece's average production for the
month of June, 2008 was 1,213 BOE/d, with field estimates of average
production for the month of August, 2008 increasing to approximately
1,500 BOE/d. Due to the increased production and high commodity prices,
Reece's cash flow and revenues have increased significantly. Cash flow from
operations in the second quarter of 2008 was up by 351% year over year,
reaching a total of $4.9 million. In turn, revenues increased to $7.9 million
or by 139% when compared to the same period in 2007.
    In order to expedite planned capital expenditures, Reece completed a
private placement financing in April raising $7.5 million. In addition, on the
strength of Reece's third-party engineering report dated December 31, 2007,
the Corporation had its credit facility increased from $13 million to
$20 million.
    The Dodsland Viking play near Kindersley, Saskatchewan saw the majority
of the activity and expenditures in the second quarter of 2008. Nine (9.0 net)
horizontal, multi-staged fractured wells were drilled during the quarter. At
the end of June, seven of these wells were on production which added over
400 bbl/d of light oil net to Reece. Drilling, completions and tie-ins are
continuing in this core area with the wells being tied into a 100% owned and
operated battery in the field.
    The Bakken play has been progressing as planned with two (1.0 net) of the
three scheduled exploratory wells having been drilled in the second quarter.
The first exploratory well was considered a success and is now on production.
This well is scheduled to be fractured before the end of September. Testing of
the second exploratory well was completed in July, 2008, and it was determined
that the well did not have sufficient quantity of oil to be considered
economic. Drilling of the third exploratory well was completed at the end of
July, 2008, and the well is currently being tested. Drilling of the fourth
well has commenced and the project has moved into the delineation stage. A
further four to seven (2 to 3.5 net) wells are scheduled to be drilled before
the end of the year. Reece has decided not to release any further drilling,
testing or production information concerning these wells until the end of the
third quarter due to competitive land issues.
    During the second quarter, Reece drilled one (0.33 net) well at its
Crystal Hill play. The well was successful and has added approximately
12 bbl/d net of light oil production to Reece. An additional 5 to 7 (1.7 to
2.3 net) wells have been scheduled to be drilled in this field before the end
of the year.

    Reece is a publicly held oil and gas company headquartered in Medicine
Hat, Alberta, Canada that trades on the TSX Venture Exchange under the symbol
"RXR".

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.

    BOEs derived by converting gas to oil at a ratio of six thousand cubic
feet of gas to one barrel of oil (6 Mcf: 1 bbl). BOEs may be misleading,
particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead.

    Certain statements in this news release including (i) statements that may
contain words such as "anticipate", "could", "expect", "seek", "may" "intend",
"will", "believe", "should", "project", "forecast", "plan" and similar
expressions, including the negatives thereof, (ii) statements that are based
on current expectations and estimates about the markets in which Reece
operates and (iii) statements of belief, intentions and expectations about
developments, results and events that will or may occur in the future,
constitute "forward-looking statements" and are based on certain assumptions
and analysis made by Reece. Forward-looking statements in this news release
include, but are not limited to, statements with respect to future capital
expenditures, including the amount, nature and timing thereof; oil and natural
gas prices and demand; other development trends within the oil and natural gas
industry; business strategy; expansion and growth of Reece's business and
operations and other such matters. Such forward-looking statements are subject
to important risks and uncertainties, which are difficult to predict and that
may affect Reece's operations, including, but are not limited to: the impact
of general economic conditions; industry conditions; government and regulatory
developments; oil and natural gas product supply and demand; competition; and
Reece's ability to attract and retain qualified personnel. Reece's actual
results, performance or achievements could differ materially from those
expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any of them do
transpire or occur, what benefits Reece will derive therefrom. Subject to
applicable law, Reece disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
    All forward-looking statements contained in this document are expressly
qualified by this cautionary statement. Further information about the factors
affecting forward-looking statements is available in Reece's current Annual
Report which has been filed with Canadian provincial securities commissions
and is available on www.sedar.com.





For further information:

For further information: Lorne Swalm, President & C.E.O., Reece Energy
Exploration Corp., Phone: (403) 526-9700, lswalm@reeceenergy.com,
www.reeceenergy.com

Organization Profile

REECE ENERGY EXPLORATION CORP.

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