Reece Energy Releases 2008 Year End Results And Reserves Data



    MEDICINE HAT, AB, April 20 /CNW/ - Reece Energy Exploration Corp.
(TSX-V/RXR) ("Reece" or the "Corporation") announces that it has filed its
Statement of Reserves Data and Other Oil and Gas Information ("NI51-101") with
an effective date of December 31, 2008. These filings can be accessed on the
System for Electronic Document Analysis and Retrieval ("SEDAR") at
www.sedar.com. Reece is also pleased to announce that its year end filings for
the year ended December 31, 2008 are now available. Some of the more salient
year over year highlights include:

    
    -   increased revenues by 171.2%;
    -   increased cash flow from operations by 429.1%;
    -   average production for the year increased by 73.6% while average
        production for the fourth quarter increased by 112%;
    -   raised $19.5 million in additional share capital;
    -   increased Reece's credit facility by $19 million to $39 million;
    -   entered into a joint venture agreement to gain access to the Lower
        Shaunavon play in south west Saskatchewan.
    

    During the year ended December 31, 2008 Reece achieved significant
growth. The Corporation had net income for the year in the amount of $5.2
million as compared to $81,032 in 2007. The difference is primarily due to the
high prices for oil and gas received during the first half of 2008 and was
accompanied by a significant addition to production which rose to 1,870 BOE/d
for the fourth quarter of 2008 as compared to 998 BOE/d for the same period in
2007. Reece is currently achieving cash flow from operations of between $1.0
million and $1.5 million per month and current production as of the date of
this MD&A is approximately 2,100 BOE/d.
    Total revenue from petroleum, natural gas and processing increased to
$36.1 million for the year ended December 31, 2008 as compared to $13.3
million for the previous year. Revenue from seismic operations, which is the
Corporations only other operating segment, increased to $1.0 million from
almost $400,000 a year earlier. The operations of the Corporation's wholly
owned subsidiary, Reece Geophysical Ltd., provides additional strategic
integrated services to the Corporation whilst providing some diversification
to the products offered by Reece.
    Reece made significant increases to its total reserves primarily through
horizontal drilling projects in its core Dodsland area in West Central
Saskatchewan. Reece also added reserves through drilling and discoveries at
its properties in Bemersyde, Rapdan, Stoughton and Forget. Additionally,
Reece's net present value (10% discount rate, before tax using forecast prices
and costs) increased significantly despite a sharp reduction in pricing
forecasts due to the increased reserves.

    Highlights

    Reece is pleased to present the following summary of highlights from the
Sproule Reserves Report:

    
    -   Total proved plus probable reserves increased 51.3% from 4,256 MBOE
        as at December 31, 2007 to 6,441 MBOE. Reece's proved plus probable
        reserves are 33.6% natural gas.
    -   Total proved reserves increased 60.2% from 2,425 MBOE to 3,884 MBOE,
        with 20.7% of Reece's proved reserves being natural gas.
    -   Reece's net present value of proved plus probable reserves at a 10%
        discount rate, before taxes using forecast prices increased by 113.9%
        from $71.7 million to $153.4 million.
    -   Reece has a total of 145,045 gross acres (89,863 net) of undeveloped
        land holdings.
    -   Reece drilled 66 wells (51.9 net) during 2008 with a 97%
        success rate.
    

    The following information is a summary of certain sections of the Sproule
Reserves Report. Sproule prepared the Sproule Reserves Report in accordance
with National Instrument 51-101 ("NI 51-101"). The Sproule Reserves Report
containing all information as required under NI 51-101 will be included with
the Corporation's yearend financial statements and MD&A which will be filed on
SEDAR (www.sedar.com) and on the Corporation's web site (www.reeceenergy.com).
Barrel of Oil Equivalent ("BOE") amounts have been calculated using a
conversion rate of 6 Mcf of natural Gas to 1 barrel of oil.

    Oil and Gas Reserves

    Throughout 2008 Reece was able to increase its total proved plus probable
reserves by 51.3% from 4,256 MBOE to 6,441 MBOE based on forecast prices and
costs. This increase represents a 345% replacement of the production
throughout 2008. Reece's proved plus probable reserves are made up of 33.6%
natural gas, 66.3% light and heavy oil and 0.1% natural gas liquids and
solution gas.

    
    Forecast Prices     Company Interest - as at
                            December 31, 2008                  Dec. 31, 2007

                                          Natural
                     Light Oil  Heavy Oil   Gas      NGL    Total     Total
    Category           (Mbbl)     (Mbbl)   (MMcf)  (Mbbl)   (MBOE)    (MBOE)
    -------------------------------------------------------------------------
    Proved Producing   1,613.0      12.7    4,473    4.8   2,406.5   1,846.4
    Proved Undeveloped   750.4       0.0      365    0.0     856.8     497.0
    Total Proved       2,526.5      12.7    6,724    9.6   3,884.1   2,425.1
    Total Probable     1,636.1      92.2    4,098    2.5   2,557.1   1,831.3
    -------------------------------------------------------------------------
    Total P+P          4,162.6     104.8   10,822   12.1   6,441.2   4,256.4
    -------------------------------------------------------------------------

    Net Present Value and Future Net Revenue

    The forecast prices used by Sproule in Reece's 2008 reserve report are
lower than those prices used in 2007. Despite the reduction in forecast prices
and costs, Reece's increased reserves resulted in a 113.9% increase in the net
present value of Reece's proved plus probable reserves.

    Forecast Prices     Company Interest - as at    Company Interest - as at
                            December 31, 2008           December 31, 2007
                               Before Taxes                Before Taxes

    Category            Discount        Discount    Discount        Discount
                         Rate 0%        Rate 10%     Rate 0%        Rate 10%
                           (M$)           (M$)         (M$)           (M$)
    -------------------------------------------------------------------------
    Proved Producing      94,958        66,521        55,048          35,938
    Proved Undeveloped    30,514        14,617        13,654           7,165
    Total Proved         143,914        93,438        70,557          44,202
    Total Probable       123,739        59,998        64,344          27,518
    -------------------------------------------------------------------------
    Total P+P            267,653       153,436       134,901          71,719
    -------------------------------------------------------------------------

    The following table compares the oil and natural gas price forecasts used
by Sproule as at December 31, 2008 and December 31, 2007.

                                         Forecast Prices

                    Oil - Edm. Par Prices          Gas - AECO Gas Prices
                 -  40 degrees API (CDN$/bbl)          - (CND$/MMBtu)

        Year    2008    2007    % Difference    2008    2007    % Difference
    -------------------------------------------------------------------------
        2009   65.35   86.01       -24.0%       6.82    7.22       -5.5%
        2010   72.78   84.65       -14.0%       7.56    7.69       -1.7%
        2011   79.95   82.77        -3.4%       7.84    7.70        1.8%
        2012   86.57   82.26         5.2%       8.38    7.61       10.1%
        2013   94.97   82.81        14.7%       9.20    7.78       18.3%


    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: please contact: Lorne Swalm, President & Chief
Executive Officer, Reece Energy Exploration Corp., Phone: (403) 526-9700,
lswalm@reeceenergy.com, www.reeceenergy.com

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REECE ENERGY EXPLORATION CORP.

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