RSX announces 2006 year-end results, first quarter 2007 reserves and production update



    /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
    THE UNITED STATES/

    CALGARY, April 30 /CNW/ - RSX Energy Inc. ("RSX" or the "Company") is
pleased to announce 2006 year-end results and provide a first quarter reserves
and operations update. First quarter drilling is expected to increase
production to approximately 3,000 Boepd in early May with additional field
optimization still in progress.

    Introduction
    ------------
    As a result of its major gas discovery at Hinton Alberta announced in
February 2006, RSX shifted much of its capital expenditure program in 2006 to
Hinton play development, 3D seismic acquisition and Crown land purchases
during the year. Approximately 34% ($16.0 million) of the Company's capital
program for 2006 was spent in Hinton, including $4.7 million for drilling and
completion, $1.2 million for well equipment and gathering, $1.3 million in 3D
seismic shooting and most notably $8.8 million in land acquisition totaling
13,184 net acres (20.6 sections).
    Part of the Company's re-focus included the sale of its interest in the
Weyburn Unit effective January 1, 2006. RSX sold 135 Boepd and net proved plus
probable reserves of 883 Mstboe for $11.5 million. Proceeds from this
divestiture were used for Hinton land acquisition early in the first quarter
of the year. The aggressive land purchase strategy has resulted in
approximately 24 potential exploration and development locations (14.85 net)
for upper Spirit River gas in the Hinton area. Nine of the locations defined
by 3D seismic are on 100% owned lands.
    In addition to the Weyburn property sale, RSX deferred drilling in
Boundary Lake and Gold Creek from the second quarter to the fourth quarter of
the year. This allowed for significant capital to be allocated to the Hinton
play during the spring and summer of 2006. RSX also divested its interest in
several minor properties throughout the year totaling 25 Mstboe of proved plus
probable reserves.

    Drilling and Capital Expenditures - 2006
    ----------------------------------------
    RSX participated in the drilling of 21 wells in 2006 resulting in 10 oil
wells (5.59 net), 9 gas wells (5.01 net) and 2 dry holes (1.16 net) for a 90%
drilling success rate. Eleven wells or approximately 62% of the year's net
well total were drilled in the fourth quarter of the year and were not on
production as of year-end. As such, National Instrument 51-101 which pertains
to reserve evaluation prohibits full assignment of proven reserves for late
adds with no production history.
    Capital expenditures were up 72% over 2005 totaling $47.2 million. RSX
spent $11.8 million in land acquisition (75% in Hinton), $2.7 million in
seismic acquisition and shooting, $24.3 million in drilling and completion and
$8.4 million in plant and gathering costs.

    Capital Expenditure Forecast in 2007
    ------------------------------------
    RSX forecasts 2007 capital expenditures of approximately $35 million with
42% of that spent on the first quarter winter drilling program. The Company
expects to participate in the drilling of 28 exploration and development wells
(15.8 net) in 2007. In the second through fourth quarters of the year 4-6
wells are planned for the Hinton area, 6 wells at Boundary Lake (4.3 net) with
2-3 additional wells in new prospects and non-core areas. A total of
$13 million is forecast for exploration drilling, $16.8 million for
development drilling, $6.9 million for equipping and tie-in and the balance of
$3.3 million on seismic and land acquisition. As at April 1, 2007 RSX has land
value of $22 million as evaluated by Seaton-Jordan & Associates Ltd.

    Production
    ----------
    RSX increased production by 200% in the period of November 2006 -
May 2007.
    Average production in 2006 was basically flat over 2005 at 1,000 Boepd
(471 Bopd and 3.16 Mmcf/d). Fourth quarter 2006 and first quarter 2007
drilling and tie-ins have increased production in May to approximately
3,000 Boepd based on field estimates (10.1 Mmcf/d and 1,365 Boepd). RSX added
the majority of this new production in late April as well equipping and
pipelining were completed. Production adds are from 12 successful wells
drilled in the first quarter consisting of 9 oil wells (5.0 net) and 3 gas
wells (1.55 net).
    RSX expects flush production followed by normal production declines from
winter program wells. The Company forecasts average 2007 production of
approximately 2,500-2,600 Boepd. First quarter production is estimated to be
approximately 1,500 Boepd. The company expects to exit the year at 3,100-3,200
Boepd.

    Reserves
    --------
    RSX announces that it has filed its Statement of Reserves Data and Other
Oil and Gas Information as mandated by National Instrument 51-101 of the
Canadian Securities Administrators. A copy of the Statement and related
filings can be viewed at www.sedar.com.
    The Company provides a reconciliation of reserves for the year ending
December 31, 2006 and the first quarter of 2007. The majority of reserve adds
have little or no production history and have not fully proved up their
potential within current reserve definitions. The Company divested 908 Mstboe
of proved plus probable reserves in 2006 primarily in the sale of its interest
in the Weyburn Unit effective January 1, 2006. The reserves were evaluated in
accordance with NI 51-101 by GLJ Petroleum Consultants effective December 31,
2006 and March 31, 2007. A detailed reserve summary and evaluation at
March 31, 2007 has been filed on www.sedar.com and is available for review.

    
                               RSX ENERGY INC.
                          SUMMARY OF RESERVES AS AT
                     DECEMBER 31, 2006 AND APRIL 1, 2007

    -------------------------------------------------------------------------
                                                  TOTAL PROVED PLUS PROBABLE
                                                      RESERVES (MSTBOE)
    -------------------------------------------------------------------------
    Opening Balance January 1, 2006                          4,462
    -------------------------------------------------------------------------
    Sale of Weyburn Unit Interest
     (January 1, 2006) Sale of minor properties               (908)
    -------------------------------------------------------------------------
    2006 Production                                           (364)
    -------------------------------------------------------------------------
    2006 Adds                                                  456
    -------------------------------------------------------------------------
    Closing Balance December 31, 2006                        3,646
    -------------------------------------------------------------------------
    Q1 Adds                                                    623
    -------------------------------------------------------------------------
    Estimated Q1 Production                                   (135)
    -------------------------------------------------------------------------
    Closing Balance March 31, 2007                           4,134
    -------------------------------------------------------------------------
    

    Prospect Review - Core Areas
    ----------------------------

    Hinton - Introduction
    ---------------------
    On February 10, 2006 RSX announced a major natural gas discovery in the
Hinton area of northern Alberta.
    The discovery well, Cabot RSX Hinton, 11-16-51-25 W5M (RSX 25%) was
drilled to 10,690 feet and encountered 165' of porous and fractured sand in
the Upper Spirit River formation. Bottom hole pressures were measured at
8,532 psig, approximately double that of a normally pressured reservoir at
similar depth. The well has a calculated absolute open flow (AOF) of
approximately 100 Mmcf/d and has produced into a new pipeline system at rates
up to 30 Mmcf/d. As a result of the magnitude and potential of the discovery,
RSX re-focused its 2006 capital program to immediately accommodate major Crown
land purchases, seismic shooting and development drilling in the Hinton area.
The Company spent $16.0 million in Hinton in 2006 representing 34% of its
total capital budget for the year.

    3D Seismic Shoot
    ----------------
    The Hinton discovery was based on high resolution 2D seismic data. After
the discovery, RSX initiated and participated in a regional 3D seismic survey
shot in June, 2006. The Company has acquired 50 square miles of data at a cost
of $1.3 million. The data is essential for prospect development in the area as
it provides structural and stratigraphic information necessary for finalizing
drilling locations.

    Land Acquisition
    ----------------
    RSX posted and acquired prospective Crown lands throughout 2006. The
Company spent $8.8 million to acquire 13,184 net acres (20.6 sections) in the
Hinton/Brule areas. Currently, the Company has a 25% interest in 2 sections, a
40% interest in 12 sections, a 50% interest in 2 sections and a 100% interest
in 16 sections. The Company has identified 24 potential exploration and
development locations (14.85 net) on corporate lands. Nine of the locations
are close to tie-in and are on 100% RSX lands.

    Exploration and Development Drilling
    ------------------------------------
    RSX participated in the drilling of 2 development wells in the Hinton
area in 2006. The wells Cabot RSX Hinton 6-21-51-25 W5M (RSX 40%) and Cabot
RSX Hinton 12-15-51-25 W5M (RSX 25%) were drilled, cased and completed in the
summer and fall of 2006. Both wells were completed in the Upper Spirit River
but the sands encountered were not as extensively fractured as the 11-16
discovery well. Combined production from both wells is expected to stabilize
at 2-3 Mmcf/d. With compression installed to offset the high line pressures
created by the 11-16 well, production may be increased.

    Future Drilling and New Joint Ventures
    --------------------------------------
    RSX plans to participate in the drilling of 4-6 exploration and
development wells in the Hinton area in 2007. RSX is participating in the
drilling of the well Cabot RSX Hinton 9-20-51-25 W5M which spudded on April 2,
2006 and is currently drilling at 2,951m. Prognosed total depth is 3,550m. RSX
has a 40% interest in the well, which, if successful, can be tied-in to the
new pipeline infrastructure one mile to the north.
    RSX will concentrate its 2007 drilling efforts north of the Athabasca
River where successful wells can readily be tied-in. Part of this effort will
include a downspacing location offsetting the 11-16 discovery well. The
application for downspacing has been submitted and partners await approval
from the AEUB.
    RSX has mapped 9 locations on 100% lands. The Company has worked closely
with forestry officials to establish surface locations that are least
disruptive to the local environment. Location approvals were recently received
allowing RSX to begin to establish additional joint ventures with industry
partners. Once completed, it is expected that drilling will start within 1-2
months. RSX expects to participate in the drilling of 2-3 deep exploration
tests in the new joint ventures and retain working interests of 25-50% in each
well as joint venture terms permit.

    Hinton Pipeline
    ---------------
    In order to accommodate high volumes of production, a new pipeline and
river crossing were required. Construction of a 12" line began in the summer
of 2006 with pipeline start-up on February 5, 2007.
    A total of 6.9 miles of 12" pipeline was laid north of the Athabasca
River and the town of Hinton. A new meter station was built at 6-29-51-25 W5M
and additional compression of 1,005 horsepower was installed at Sundance Creek
in 52-20 W5M.
    The system has current capacity of 60 Mmcf/d but can be expanded with
additional compression. RSX has reserved 13.35 Mmcf/d of firm service in the
pipeline.

    Gold Creek
    ----------
    RSX has interests in over 34,000 acres in the Gold Creek and Bezanson
areas of northern Alberta. The Company made 2 significant discoveries in the
area in 2006.
    The well RSX Gold Creek 5-7-69-4 W6M tested 2.5-3.0 Mmcf/d of natural gas
from the Fahler sands when completed in November 2006. The Company has a 100%
before payout interest and an 80% after payout interest in the well. RSX ran
approximately 5.5 miles of 4" pipeline to allow the well to begin production
in April 2007. The well is currently producing 2.4-2.6 Mmcf/d at 1,200 psig
flowing pressure. RSX is seismically mapping the Fahler zone and expects to
drill 2-3 Fahler tests in the Gold Creek area beginning in the fourth quarter
of 2007.
    The well RSX et al Gold Creek 4-14-70-4 W6M was drilled and completed in
the Gething formation in December 2006. RSX has a 50% interest in the well
which flowed clean oil on test at rates of 250-300 Boepd. A total of 4 miles
of 4" pipeline was built in the first quarter to tie the well into a central
battery. The well is subject to a 4 month AEUB restricted rate of
approximately 125 Boepd which the well has been producing for the past month.
RSX is planning to drill 2-3 step-out locations from the same pad to exploit
Gething oil reserves in the area beginning in December 2007.

    Randell
    -------
    RSX participated in the drilling of 3 Gilwood oil wells (1.5 net) in the
Randell area in 2006. Two of the wells were drilled late in the fourth quarter
as ice bridge construction began early in December. The warm winter of 2006
allowed for only 1 oil well to be drilled and flowlined to a new central
battery built in March 2006. RSX has 50% interest in the battery located at
16-11-76-11 W5M which is capable of treating up to 2,500 Boepd of oil and
emulsion. RSX spent approximately $3.6 million in battery and gathering costs
in the Randell area in 2006.
    In the winter 2007 program RSX participated in the drilling of 9 Gilwood
oil tests (4.5 net) resulting in 7 oil wells (3.5 net) 1 potential oil well
(0.5 net) and 1 dry hole (0.5 net). All successful wells have been tied-in to
the central battery with final well and battery optimization being completed
in April.

    Boundary Lake
    -------------
    RSX drilled 3 wells in the fourth quarter of 2006 in the Boundary Lake
area of northwestern Alberta resulting in 1 oil well (1.0 net), 1 potential
gas well (1.0 net) and 1 dry hole (1.0 net). The well RSX Boundary Lake
8-5-86-12 W6M is currently producing approximately 50 Boepd from the Boundary
Lake member of the Charlie Lake formation. RSX plans to drill 3 (1.5 net)
additional development wells after break-up to continue to exploit the
Boundary Lake in the local area.
    Using its proprietary 30 square mile 3D seismic survey, RSX made a
significant oil discovery in the Boundary Lake area in February 2007. The well
RSX Boundary Lake 13-29-85-12 W6M flowed light sweet crude at rates of 350-400
Boepd from the Kiskatinaw formation during an extended flow test conducted in
February 2007. RSX has a 100% interest in the well which is expected to come
on stream in late April once battery construction is complete. RSX is planning
to drill 3 step-out wells (2.9 net) after break-up, beginning with a 90%
working interest location at 16-30-85-12 W6M. If successful, the well will be
flowlined to the RSX battery being constructed at the 13-29 location.

    Minor Property Development
    --------------------------
    RSX will continue development drilling in the 2 non-core areas of Karr
and Willesden Green, Alberta. The Company plans 1 development oil well at Karr
(1.0 net) and 2 additional deep tests in Willesden Green (0.6 net). Uphole
completions of shallow gas zones in existing wellbores are also expected in
the Willesden Green area in 2007.

    RSX is a Calgary based company engaged in the exploration, development
and production of oil and natural gas. The Company's common shares are listed
on the TSX Venture Exchange under the trading symbol "RSX".

    Per barrel of oil equivalent ("boe") amounts may be misleading,
particularly if used in isolation. A boe conversion ratio has been calculated
using a conversion rate of six thousand cubic feet of natural gas to one
barrel of oil ("6:1") and is based on an energy equivalency conversion method
applicable at the burner tip and does not represent a value equivalency at the
wellhead.

    This press release contains forward-looking statements, including but not
limited to operational information including drilling projections, production
and capital investment projections. These projections are based on current
expectations and are subject to a number of risks and uncertainties that could
materially affect the results. These risks include, but are not limited to,
risks associated with the oil and gas industry (e.g. operational risks in
development, exploration and production; delays or changes in plans with
respect to exploration or development projects or capital expenditures; and
the uncertainty of estimates and projections in relation to production, costs
and expenses), financial risks such as the risk of commodity price and foreign
exchange rate fluctuations and the risk that equity or debt financing will not
be available to RSX on satisfactory terms and regulatory risks. Due to the
risks, uncertainties and assumptions inherent in forward-looking statements,
prospective investors in the company's securities should not place undue
reliance on these forward-looking statements.

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

    
    2006 OPERATING AND FINANCIAL HIGHLIGHTS
    -   Sale(*) of interest in the Weyburn Unit effective January 1, 2006 to
        focus on Hinton gas discovery.
    -   $8.8 million in Hinton land purchases in year ending December 31,
        2006.
    -   Participated in proprietary 3D seismic shoot in Hinton area.
    -   In 2006 Q4, added to land position at Hinton with purchase of
        2 prospective sections, RSX now has an average working of 68% in
        32 sections of crown land in the Hinton Area.
    -   In 2006 Q4 drilling included 11 gross wells (7.32 net(xx)), 62% of
        the net drilling activity for 2006.
    -   2006 year end petroleum and natural gas sales down 19% over 2005.
    -   2006 year end production down 6% over 2005 (net of Weyburn Unit
        divestiture and other non-core properties)(*).
    -   Operating netback of $33.87/boe (before G&A and interest cost),
        despite a substantial natural gas price decline.
    -   2006 year end cash flow from operations down 32% over 2005 as a
        result of lower natural gas prices along with a daily production
        volume switch to natural gas from oil.
    -   2006 year end cash flow from operations of $0.20 per share basic and
        diluted as compared to $0.33 per share basic and $0.31 per share
        diluted during same period 2005.
    -   2006 year end net income of $532k as compared to $4,306k during same
        period 2005.
    -   2006 year end capital expenditures of $47,196k, up 72% over 2005
        capital expenditures of $27,514k.


                          Three    Three
                          Month    Month
                         Period   Period     Year     Year % Change     Year
                          Ended    Ended    Ended    Ended     Year    Ended
                        Dec. 31, Dec. 31, Dec. 31, Dec. 31,    Over  Dec. 31,
        Highlights         2006     2005     2006     2005     Year     2004
    -------------------------------------------------------------------------
    Financial ($000's
     except per share data)
      Petroleum and
       natural gas sales  4,704    6,484   19,366   23,783     -19%   13,062
      Cash flow from
       operations         2,238    3,800    9,530   13,987     -32%    6,225
        Per share -
         basic             0.05     0.09     0.20     0.33     -39%     0.17
        Per share -
         diluted           0.05     0.09     0.20     0.31     -35%     0.16
      Net income (loss)    (502)     681      532    4,306     -88%      835
        Per share - basic
         and diluted      (0.01)    0.02     0.01     0.10     -90%     0.02
      General &
       administrative       506      425    2,137    1,584      35%    1,381
      Capital
       expenditures      15,908    7,101   47,196   27,514      72%   17,346
      Debt and working
       capital                            (19,993) (21,241)      6%   (7,877)
      Property
       divestitures(*)        -        -  (11,223)       -       -%        -
      Shareholders'
       equity                              55,761   26,041     114%   23,207
      Total assets                         86,270   58,505      47%   38,061
    Operating (average
     daily production)
      Oil (bopd)            453      683      471      692     -32%      534
      Natural gas (mcfd)  3,496    2,250    3,159    2,209      43%    1,405
      Equivalent barrels
       (boepd)            1,035    1,058      997    1,060      -6%      768

    (*) Property divestitures

    Effective January 1, 2006, RSX divested its 0.44792% interest in the
    Weyburn oil unit to a Calgary-based royalty trust for $11 million. At the
    time of sale, RSX's net share of production from the Weyburn unit was
    approximately 130 boepd with total proved reserves of 646 mstboe as
    evaluated by GLJ Petroleum Consultants Ltd. effective December 31, 2005.
    During the 2006 Q2, RSX continued its divestiture program. RSX sold
    non-core properties for $254k. The approximate production from these
    non-core properties was 20 boepd. Proceeds from the divestitures have
    been used to partially fund RSX's drilling program including lands,
    seismic and drilling costs in the Hinton area.


                              Year Ended  Year Ended    % Change  Year Ended
                                December    December   Year Over    December
            Highlights          31, 2006    31, 2005        Year    31, 2004
    -------------------------------------------------------------------------
    Land Position
      Net acres                   82,109      63,047         30%      46,935
    Wells Drilled
      Gross                           21          24        -13%          25
      Net                          11.76       10.73         10%       10.20
    Reserves (mboe)
      Total proved                 2,038       2,778        -27%       2,079
      Probable                     1,608       1,684         -5%         714
      Total proved plus
       probable                    3,646       4,462        -18%       2,793
      Reserve life index
       (proved plus probable)  5.1 years   7.5 years        -32%   8.8 years
    Common Share Information
      Shares outstanding -
       basic                  52,488,574  43,202,039         21%  42,746,039
      Shares outstanding -
       diluted                54,193,574  45,781,039         18%  45,781,039
      Weighted average
       during the period
        Basic                 46,814,255  42,944,601          9%  37,432,109
        Diluted               47,748,166  44,581,351          7%  39,106,172
      Closing share price,
       period end ($)               3.60        1.95         85%        1.34
      Weighted average share
       price ($)                    3.37        1.58        113%        1.14
      Trading volume          22,232,767  17,106,810         30%  11,212,949
      Daily average trading
       volume                     88,577      68,155         30%      42,961

    (xx) GLJ Petroleum Consultants Ltd. reserve evaluation prohibits
    assignment of proved reserves for late year additions with no production
    history. The majority of reserve adds have little or no production
    history and have not fully proved up their potential within current
    reserve definitions.


    SUMMARY OF QUARTERLY RESULTS FOR 2006 AND 2005

                                                         2006
                                             Q1       Q2       Q3       Q4
                                          -----------------------------------
    Financial ($000's except per
     share data)
      Petroleum and natural gas sales       5,068    4,898    4,696    4,704
      Cash flow from operations             2,600    2,156    2,536    2,238
        Per share - basic                    0.06     0.05     0.05     0.05
        Per share - diluted                  0.06     0.04     0.05     0.05
      Net income (loss)                       363      258      413     (502)
        Per share - basic and diluted        0.01     0.00     0.01    (0.01)
      Capital expenditures                 11,633   11,695    7,960   15,908
      Total debt and working capital      (19,305) (12,600) (17,971) (19,993)
      Total shareholders' equity           26,432   43,734   44,307   55,761
      Total assets                         56,856   66,817   72,016   86,270
    Operating (average daily production)
      Equivalent barrels (boepd)            1,011      971      972    1,035
    Common Share Information (000's)
      Shares outstanding - basic           43,202   48,154   48,339   52,489
      Shares outstanding - diluted         45,781   51,194   51,194   54,194
      Weighted average during the period
        Basic                              43,202   44,204   45,553   46,814
        Diluted                            45,293   45,711   47,130   47,748


                                                         2005
                                             Q1       Q2       Q3       Q4
                                          -----------------------------------
    Financial ($000's except per
     share data)
      Petroleum and natural gas sales       4,304    5,893    7,102    6,484
      Cash flow from operations             2,236    3,305    4,646    3,800
        Per share - basic                    0.05     0.08     0.11     0.09
        Per share - diluted                  0.05     0.07     0.11     0.09
      Net income (loss)                       560    1,131    1,934      681
        Per share - basic and diluted        0.01     0.03     0.04     0.02
      Capital expenditures                  8,835    5,007    6,571    7,101
      Total debt and working capital      (14,469) (16,046) (17,971) (21,241)
      Total shareholders' equity           22,055   23,340   25,302   26,041
      Total assets                         44,794   48,443   54,923   58,505
    Operating (average daily production)
      Equivalent barrels (boepd)              895    1,150    1,146    1,058
    Common Share Information (000's)
      Shares outstanding - basic           42,757   43,102   43,102   43,202
      Shares outstanding - diluted         45,781   45,781   45,781   45,781
      Weighted average during the period
        Basic                              42,749   42,774   42,885   42,945
        Diluted                            44,808   44,544   44,639   44,581


    OPERATING

    Operating results for the three month period and year ended December 31,
2006 and 2005 are:

    -------------------------------------------------------------------------
    Operating Results                             Three Month Period Ended
    -------------------------------------------------------------------------
                                               December 31,      December 31,
    Production Netbacks                               2006              2005
    -------------------------------------------------------------------------
    Average daily natural gas (mcfd)                 3,496             2,250
    Average daily oil & ngls (bopd)                    453               683
    Average daily oil equivalent
     (boepd at 6:1)                                  1,035             1,058
    Average natural gas price (mcf)                  $7.17            $12.20
    Average oil and ngls price (bbl)                $57.57            $63.02

    Netbacks                               $000's      Boe   $000's      Boe
    --------                               ------      ---   ------      ---
    Revenue                                $4,704   $49.38   $6,484   $66.64
    Royalties                                 689     7.23    1,151    11.82
    Production                              1,034    10.86      827     8.50
    Transportation                             93     0.97       64     0.66
                                          -----------------------------------
                                           $2,888   $30.32   $4,442   $45.66
    Administrative costs                      506     5.31      425     4.36
    Interest expense                          144     1.51      201     2.06
                                          -----------------------------------
                                           $2,238   $23.50   $3,816   $39.24
    Current income tax expense                  -        -       16     0.16
    -------------------------------------------------------------------------
    Cash flow from operations              $2,238   $23.50   $3,800   $39.08
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Operating Results                                    Year Ended
    -------------------------------------------------------------------------
                                               December 31,      December 31,
    Production Netbacks                               2006              2005
    -------------------------------------------------------------------------
    Average daily natural gas (mcfd)                 3,159             2,209
    Average daily oil & ngls (bopd)                    471               692
    Average daily oil equivalent
     (boepd at 6:1)                                    997             1,060
    Average natural gas price (mcf)                  $6.79             $9.52
    Average oil and ngls price (bbl)                $67.15            $63.79

    Netbacks                               $000's      Boe   $000's      Boe
    --------                               ------      ---   ------      ---
    Revenue                               $19,366   $53.21  $23,783   $61.48
    Royalties                               2,941     8.08    4,312    11.14
    Production                              3,744    10.29    2,943     7.61
    Transportation                            354     0.97      296     0.77
                                          -----------------------------------
                                          $12,327   $33.87  $16,232   $41.96
    Administrative costs                    2,137     5.88    1,584     4.09
    Interest expense                          631     1.73      579     1.50
                                          -----------------------------------
                                           $9,559   $26.26  $14,069   $36.37
    Current income tax expense                 29     0.08       82     0.21
    -------------------------------------------------------------------------
    Cash flow from operations              $9,530   $26.18  $13,987   $36.16
    -------------------------------------------------------------------------
    

    Production and pricing

    During 2006 Q4, production averaged 1,035 boepd, down 2% over 2005 Q4
daily production of 1,058 boepd. Production during Q4 was up 6% over 2006 Q3
production that averaged 972 boepd. RSX initiated a very active Q4 drilling
program; however, any resultant production additions (Willesden Green, Karr,
Gold Creek and Boundary Lake) were very late December and have a minimal
effect on average production for the quarter.
    Crude oil production has been reduced through the corporate divesture of
the Weyburn Unit, effective January 1, 2006, by 130-135 boepd as well as
additional non-core assets divestitures of approximately 20 boepd. During the
year ended December 31, 2006 production averaged 997 boepd, down 6% over the
same period in 2005 where daily production averaged 1,060 boepd.
    For 2006 Q4, production was comprised of 44% oil and natural gas liquids
and 56% natural gas. During 2005 Q4, the production mix was 65% oil and
natural gas liquids and 35% natural gas. This production change is a result of
oil property divestitures and the commencement of natural gas production from
the Hinton area. For the year ended December 31, 2006 the production mix was
47% oil and natural gas liquids and 53% natural gas. During the year ended
December 31, 2005 the production mix was 65% oil and natural gas liquids and
35% natural gas. As RSX continues to focus on the Hinton gas discovery, there
will be a continued movement to a more natural gas weighting over oil and
natural gas liquids.
    The blended average selling price for crude oil and natural gas liquids
in 2006 Q4 was $57.57/bbl, with natural gas at $7.17/mcf, as compared to 2005
Q4 pricing of $63.02/bbl for crude oil and natural gas liquids and $12.20/mcf
for natural gas. Crude oil had a 9% price decrease while natural gas pricing
had a 41% decrease, significantly affecting comparable netbacks. For the year
ended December 31, 2006 the blended average selling price for crude oil and
natural gas liquids was $67.15/bbl, with natural gas at $6.79/mcf. As compared
to the same period last year, crude oil had a 5% price increase while natural
gas pricing had a 29% decrease.

    Petroleum and natural gas sales

    For 2006 Q4, revenue from oil and gas sales before royalties was $4,704k
($49.38/boe), a 27% decrease over 2005 Q4 oil and gas revenues of $6,484k
($66.64/boe). The revenue decrease is due to a sharp decrease in natural gas
pricing as well as lower crude oil and natural gas liquids prices.
    For the year ended December 31, 2006 revenue from oil and gas sales was
$19,366k ($53.21/boe), a 19% decrease over the same period in 2005 when oil
and gas revenues were $23,783k ($61.48/boe). Year over year, the revenue per
boe has declined by 13%. RSX has not entered into any hedging or forward
contracts to lock-in commodity prices.

    Royalties

    For 2006 Q4, royalties were $689k ($7.23/boe) as compared to $1,151k
($11.82/boe) for the same period in 2005. RSX was been advantaged by a Deep
Gas Royalty Holiday Program in the Hinton area. As the exemption has been
fully utilized on the first well, RSX expects an increase in royalties in
2007.
    For the year ended December 31, 2006, royalties were $2,941k ($8.08/boe)
as compared to $4,312k ($11.14/boe) for the same period in 2005. During the
year ended December 31, 2005, the Company settled an outstanding Gross
Overriding Royalty (GOR) in the amount of $330k ($1.14/boe) pertaining to oil
and gas properties acquired in 2001. The royalty decrease is also due to
decreased natural gas prices along with lower average daily production.

    Production

    Production expenses have totaled $1,034k ($10.86/boe) in 2006 Q4 as
compared to $827k ($8.50/boe) during the same period in 2005. The increase in
per unit production costs is a result of lower production due to deferred
drilling programs as well as increasing field costs.
    For the year ended December 31, 2006, production expenses were $3,744k
($10.29/boe), as compared to $2,943k ($7.61/boe) during the same period in
2005. Operating costs have increased against declining volumes. As RSX
implements its deferred drilling program in late 2006 Q4 and 2007 Q1,
increased production volumes will assist in decreasing overall cost per boe.
During 2006, RSX has expensed several well workovers and pump jack repairs
that have contributed to increased total operating costs.

    Transportation

    In 2006 Q4, transportation costs were $93k ($0.97/boe) as compared to
$64k ($0.66/boe) in 2005 Q4. The increase in costs is due to the natural gas
at Hinton and increased oil and natural gas liquids at Boundary Lake. For the
year ended December 31, 2006, transportation costs were $354k ($0.97/boe), as
compared to $296k ($0.77/boe) during the same period in 2005. In 2007, as the
Hinton pipeline is commissioned, transportation costs will increase due to the
13,000 GJ/d firm commitment of $0.34389/GJ ($136k/month).

    General and administrative costs

    General and administrative costs for 2006 Q4 were $506k ($5.31/boe) as
compared to $425k ($4.36/boe) for the same period last year. For the year
ended December 31, 2006, general and administrative costs were $2,137k
($5.88/boe), as compared to $1,584k ($4.09/boe) during the same period in
2005. Capitalized administrative costs in 2006 Q4 were $78k as compared to
$66k in 2005 Q4. For the year ended December 31, 2006, capitalized
administrative costs were $303k, as compared to $265k during the same period
in 2005. The increase in general and administrative costs is due to corporate
growth along with increased reporting costs. Into 2007, RSX expects to lower
G&A per boe with the ability to add increased production volume with modest
infrastructure changes. At December 31, 2006, RSX had nine employees and three
part-time consultants, no change from October 2004.

    Interest on bank debt

    Interest expense for 2006 Q4 was $144k ($1.51/boe) as compared to $201k
($2.06/boe) in 2005 Q4. The Company has chosen to utilize debt financing to
partially fund its development and exploration capital expenditure program.
For the year ended December 31, 2006, interest expense was $631k ($1.73/boe),
as compared to $579k ($1.50/boe) during the same period in 2005. Additional
interest expense is also due to the rising prime rate of interest.

    Current income tax expense

    Current income tax expense for 2006 Q4 was $Nil ($0.00/boe) as compared
to $16k ($0.16/boe) in 2005 Q4. For the year ended December 31, 2006, current
income tax expense was $29k ($0.08/boe), as compared to $82k ($0.21/boe)
during the same period in 2005. The current tax expense represents the final
Saskatchewan Capital Tax settlement in regard to the Weyburn Unit

    Cash flow from operations

    Cash flow from operations for 2006 Q4 was $2,238k ($23.50/boe), a 41%
decrease over $3,800k ($39.08/boe) during the same period in 2005. Cash flow
from operations for 2006 Q4 was down 12% over the 2006 Q3 cash flow from
operations of $2,536k ($28.36/boe) due to weaker commodity prices in 2006 Q4.
Cash flow from operations for 2006 Q4 was $0.05 per share basic and diluted as
compared to $0.09 per share basic and diluted in 2005 Q4. Netbacks for 2006 Q4
were $23.50/boe, a decrease of 40% over the $39.08/boe netback in the same
period last year.
    For the year ended December 31, 2006, cash flow from operations was
$9,530k ($26.18/boe), down 32% as compared to $13,987k ($36.16/boe) during the
same period in 2005. Cumulative year end cash flow from operations in 2006 was
$0.20 per share basic and per share diluted as compared to $0.33 per share
basic and $0.31 per share diluted in the same period in 2005. Netbacks for the
year ended December 31, 2006 were $26.18/boe, a decrease of 28% over the
$36.16/boe netback in the same period last year. Netbacks have been
significantly affected by lower natural gas prices and increased operating and
administrative costs.

    
    Operating Results by Quarter for Year 2006

                                                Three Month Period Ended
    -------------------------------------------------------------------------
    Operating Results -
     Production/Netbacks                    March 31, 2006     June 30, 2006
    -------------------------------------------------------------------------
    Daily natural gas (mcfd)                         2,967             3,091
    Daily oil and ngl's (bopd)                         516               456
    Daily oil equivalent (gas 6:1)                   1,011               971

    Average natural gas price (mcf)                  $7.89             $6.49
    Average oil & ngl's price (bbl)                 $63.74            $74.10

                                           $000's      Boe   $000's      Boe
    -------------------------------------------------------------------------
    Petroleum and natural gas sales        $5,068   $55.71   $4,898   $55.44
    Royalties                                 840     9.24      682     7.72
    Production                              1,020    11.21      913    10.33
    Transportation                             69     0.76       96     1.09
    -------------------------------------------------------------------------
                                           $3,139   $34.50   $3,207   $36.30

    General and administrative                390     4.28      845     9.56
    Interest on bank debt                     149     1.64      177     2.00
    -------------------------------------------------------------------------
                                           $2,600   $28.58   $2,185   $24.74

    Current income tax expense                  0     0.00       29     0.33
    -------------------------------------------------------------------------
    Cash flow from operations              $2,600   $28.58   $2,156   $24.41
    -------------------------------------------------------------------------


                                                Three Month Period Ended
    -------------------------------------------------------------------------
    Operating Results -
     Production/Netbacks                    Sept. 30, 2006      Dec 31, 2006
    -------------------------------------------------------------------------
    Daily natural gas (mcfd)                         3,077             3,496
    Daily oil and ngl's (bopd)                         459               453
    Daily oil equivalent (gas 6:1)                     972             1,035

    Average natural gas price (mcf)                  $5.62             $7.17
    Average oil & ngl's price (bbl)                 $73.51            $57.57

                                           $000's      Boe   $000's      Boe
    -------------------------------------------------------------------------
    Petroleum and natural gas sales        $4,696   $52.52   $4,704   $49.38
    Royalties                                 730     8.17      689     7.23
    Production                                777     8.68    1,034    10.86
    Transportation                             96     1.07       93     0.97
    -------------------------------------------------------------------------
                                           $3,093   $34.60   $2,888   $30.32

    General and administrative                396     4.43      506     5.31
    Interest on bank debt                     161     1.81      144     1.51
    -------------------------------------------------------------------------
                                           $2,536   $28.36   $2,238   $23.50

    Current income tax expense                  0     0.00        0     0.00
    -------------------------------------------------------------------------
    Cash flow from operations              $2,536   $28.36   $2,238   $23.50
    -------------------------------------------------------------------------


    Operating Results by Quarter for Year 2005

                                                Three Month Period Ended
    -------------------------------------------------------------------------
    Operating Results -
     Production/Netbacks                    March 31, 2005     June 30, 2005
    -------------------------------------------------------------------------
    Daily natural gas (mcfd)                         1,872             2,370
    Daily oil and ngl's (bopd)                         583               755
    Daily oil equivalent (gas 6:1)                     895             1,150

    Average natural gas price (mcf)                  $7.41             $7.88
    Average oil & ngl's price (bbl)                 $58.19            $59.81

                                           $000's      Boe   $000's      Boe
    -------------------------------------------------------------------------
    Petroleum and natural gas sales        $4,305   $53.41   $5,893   $56.32
    Royalties                                 877    10.89    1,253    11.97
    Production                                636     7.89      725     6.93
    Transportation                             74     0.91       85     0.81
    -------------------------------------------------------------------------
                                           $2,718   $33.72   $3,830   $36.61

    General and administrative                388     4.81      362     3.47
    Interest on bank debt                      64     0.79      143     1.37
    -------------------------------------------------------------------------
                                           $2,266   $28.12   $3,325   $31.77

    Current income tax expense                 30     0.37       20     0.19
    -------------------------------------------------------------------------
    Cash flow from operations              $2,236   $27.75   $3,305   $31.58
    -------------------------------------------------------------------------


                                                Three Month Period Ended
    -------------------------------------------------------------------------
    Operating Results -
     Production/Netbacks                    Sept. 30, 2005      Dec 31, 2005
    -------------------------------------------------------------------------
    Daily natural gas (mcfd)                         2,376             2,250
    Daily oil and ngl's (bopd)                         750               683
    Daily oil equivalent (gas 6:1)                   1,146             1,058

    Average natural gas price (mcf)                 $10.09            $12.20
    Average oil & ngl's price (bbl)                 $70.99            $63.02

                                           $000's      Boe   $000's      Boe
    -------------------------------------------------------------------------
    Petroleum and natural gas sales        $7,101   $67.38   $6,484   $66.64
    Royalties                               1,031     9.79    1,151    11.82
    Production                                755     7.16      827     8.50
    Transportation                             73     0.70       64     0.66
    -------------------------------------------------------------------------
                                           $5,242   $49.73   $4,442   $45.66

    General and administrative                409     3.88      425     4.36
    Interest on bank debt                     171     1.62      201     2.06
    -------------------------------------------------------------------------
                                           $4,662   $44.23   $3,816   $39.24

    Current income tax expense                 16     0.15       16     0.16
    -------------------------------------------------------------------------
    Cash flow from operations              $4,646   $44.08   $3,800   $39.08
    -------------------------------------------------------------------------
    

    Stock-based compensation

    For 2006 Q4, stock-based compensation was $83k as compared to $28k for
the same period last year. For the year ended December 31, 2006, stock-based
compensation was $930k, as compared to $112k during the same period in 2005.
The major change relates to the recognition of an expense relating to the
May 23, 2006 options granted at an option price of $3.80. Using the
Black-Scholes option pricing model, the fair value of these options granted
was $1.70 per option.

    Depletion, depreciation and accretion

    For 2006 Q4, depletion, depreciation and accretion expenses were $3,219k
as compared to the $3,052k recorded in 2005 Q4. The 2006 Q4 depletion unit
rate on petroleum and natural gas properties was $35.11 as it includes
adjustments to recognize the GLJ Petroleum Consultants Ltd. reserve evaluation
report at December 31, 2006. During 2006 Q4, the Company participated in
drilling of 11 gross wells representing 52% of the entire 2006 drilling
activity. The 2006 depletion rate is $24.23/boe as compared a $20.80/boe rate
in 2005, representing a 16% increase year over year. The increase is due to
increasing costs related to rigs, services and equipment; as well as, the fact
that the Company's drilling program was late in the year (Q4 drilled 11 gross
wells, 7.32 net). The GLJ Petroleum Consultants Ltd. reserve evaluation
prohibits assignment of proved reserves for late year additions with no
production history. The majority of reserve adds have little or no production
history and have not fully proved up their potential within current reserve
definitions. The Company has initiated a 2007 Q1 reserve update by GLJ
Petroleum Consultants Ltd. that is expected to be completed in late April
2007. The Company expects that, as it continues to add reserves from its
drilling program and as it converts probable reserves into proved reserves,
the depletion and depreciation rate will be maintained and lowered. For the
year ended December 31, 2006, depletion, depreciation and accretion expenses
were $8,912k, up 10% as compared to $8,108k during the same period in 2005.

    Income taxes

    Future income tax expense in 2006 Q4 was a recovery of $561k as compared
to an expense of $39k in 2005 Q4. For the year ended December 31, 2006, future
income tax expense was a recovery of $842k, as compared to an expense of
$1,462k during the same period in 2005. The recovery was mostly attributable
to the recognition of a decrease in federal and provincial corporate tax
rates.
    The approximate resource tax pool balances remaining at December 31, 2006
are as follows:

    

    Approximate Tax Pool Balances ($000's)                 December 31, 2006
    -------------------------------------------------------------------------
    Undepreciated Capital Cost                                       $12,930
    Canadian Exploration Expense                                      25,125
    Canadian Development Expense                                      11,551
    Canadian Oil and Gas Property Expense                             12,755
    Share Issue Costs                                                  1,942
    Non-Capital Losses                                                   469
    ACRI                                                                 847
    -------------------------------------------------------------------------
    Tax Pool Balances                                                $65,619
    -------------------------------------------------------------------------
    

    During 2006, the Company issued 3,000,000 flow-through common shares for
gross proceeds of $12.15 million. Income tax deductions of $12.15 million were
renounced to subscribers effective December 31, 2006. The Company spent
$3.1 million eligible expenditures to December 31, 2006 and is required to
expend the remaining $9.05 million by December 31, 2007. The related income
tax impact will be recorded in 2007 Q1.

    Net income

    Net income for 2006 Q4 was a loss of $502k compared to net income of
$681k during 2005 Q4. Income for 2006 Q4 was a loss of $0.01 per share basic
and diluted. For the year ended December 31, 2006 net income was $532k, as
compared to $4,306k during the same period in 2005. Income for year ended
December 31, 2006 was $0.01 per share basic and diluted as compared to
$0.10 per share basic and diluted for the same period last year. The decrease
in net income is attributable to lower natural gas prices, increased operating
and administrative costs, along with increased depletion and stock-based
compensation costs.

    CAPITAL EXPENDITURES

    Capital expenditures in 2006 Q4 were $15,908k, up 124% as compared to the
$7,101k in 2005 Q4. Year ended December 31, 2006 capital expenditures were
$47,196k, up 72% as compared to $27,514k for the same period in 2005. The
details of capital expenditures by type are:

    
    -------------------------------------------------------------------------
                          Three Month  Three Month
                               Period       Period
    Capital                     Ended        Ended   Year Ended   Year Ended
     Expenditures         December 31, December 31, December 31, December 31,
     By Type ($000's)            2006         2005         2006         2005
    -------------------------------------------------------------------------
    Land                         $605          $20      $11,775       $3,038
    -------------------------------------------------------------------------
    Geological & geophysical      270          263        2,742        1,235
    -------------------------------------------------------------------------
    Drilling & completion      13,618        5,955       24,309       17,474
    -------------------------------------------------------------------------
    Production equipment        1,414          853        8,353        5,737
    -------------------------------------------------------------------------
    Office assets                   1           10           17           30
    -------------------------------------------------------------------------
    TOTAL                     $15,908       $7,101      $47,196      $27,514
    -------------------------------------------------------------------------
    

    During 2006, RSX has continued its aggressive land positioning,
especially in Hinton, Randell and Gold Creek Land costs for the period year
ended December 31, 2006 were up 288% over the same period last year as RSX
acquired 23,424 net undeveloped acres of land on both existing core areas and
newly identified exploration areas in Alberta. RSX exits 2006 with 71,636 net
undeveloped acres with an estimated value of approximately $21.5 million,
based on a Seaton-Jordan independent evaluation as at March 31, 2007. In the
Hinton area, RSX spent $8.8 million on land in 2006. For the year ended
December 31, 2006, geological & geophysical costs were up 122% over the same
period last year as RSX participated in 3D seismic programs in the Hinton and
Randell areas. In 2006 Q4, drilling and completion costs were $13.6 million,
representing 56% of the 2006 drilling and completion expenditures of
$24.3 million. Overall, 2006 drilling and completion costs were up 39% over
last year. With the procurement of a contracted rig commencing in late August,
RSX implemented a busy fall/winter drilling program. This program included
drilling and completion activity that had been deferred due to the short
winter last year. During the year ended December 31, 2006, RSX had
participated in drilling 21 gross wells (11.76 net) as compared to 24 gross
wells (10.73 net) during the same period last year. Production equipment costs
were up 46% over the same period last year as a successful drilling program
resulted in the requirement for flow line and battery/facility construction in
the Hinton, Randell and Gold Creek areas. In the Randell area, RSX has
participated (50%) in the construction of a 2,200 bopd battery and gathering
facility in anticipation of a very active winter 2007 drilling program, based
on 3D seismic.
    Of the total capital expenditures of $47,196k for the year ended
December 31, 2006, RSX spent $16,022k (34%) in the Hinton area.

    
    -------------------------------------------------------------------------
                           Three
                          Months       Year                  Year
    Capital                Ended      Ended                 Ended
     Expenditures        Dec. 31,   Dec. 31,         %    Dec. 31,  % Change
     By Area ($'000)        2006       2006   Of Total       2005  Over Year
    -------------------------------------------------------------------------
    Hinton                $2,252    $16,022        34%     $1,247      1185%
    -------------------------------------------------------------------------
    Randell                1,795      8,603        18%      5,578        54%
    -------------------------------------------------------------------------
    Gold Creek             3,623      8,164        17%      4,883        67%
    -------------------------------------------------------------------------
    Boundary Lake          2,790      3,937         8%      2,537        55%
    -------------------------------------------------------------------------
    Willesden Green        1,693      2,436         5%      4,889       -50%
    -------------------------------------------------------------------------
    Karr                   1,415      1,784         4%      3,833       -53%
    -------------------------------------------------------------------------
    Other                  2,339      6,233        14%      4,517        38%
    -------------------------------------------------------------------------
    Office assets              1         17         0%         30       -42%
    -------------------------------------------------------------------------
    TOTALS               $15,908    $47,196       100%    $27,514        72%
    -------------------------------------------------------------------------
    

    Drilling Results

    During 2006 Q4, the Company participated in drilling of 11 gross wells
representing 52% of the entire 2006 drilling activity. On a net well basis,
2006 Q4 totaled 7.32 net wells representing 62% of the total 2006 net wells.
Wells drilled in 2006 Q4 were 3 Gold Creek (1.66 net), 2 Boundary Lake
(2.00 net), 2 Randell (1.00 net), and 4 wells, one each in Karr, Pine Creek,
Hinton and Willesden Green (2.66 net). The oil wells were in Randell (2 gross,
1.00 net), Boundary Lake (1 gross, 1.00 net) and Karr (1 gross, 1.00 net). The
gas wells were in Gold Creek (2 gross, 1.50 net), Hinton (1 gross, 0.25 net),
Pine Creek (1 gross, 1.00 net), and Willesden Green (1 gross, 0.41 net). The
dry holes were drilled in Gold Creek (1 gross, 0.16 net) and Boundary Lake (1
gross, 1.00 net).

    
    -------------------------------------------------------------------------
                             Three Month
                            Period Ended        Year Ended        Year Ended
                             December 31,      December 31,      December 31,
    Drilling Activity               2006              2006              2005
    -------------------------------------------------------------------------
                          Gross      Net    Gross      Net    Gross      Net
    -------------------------------------------------------------------------
    Oil                       4     3.00       10     5.59       10     4.43
    -------------------------------------------------------------------------
    Gas                       5     3.16        9     5.01       12     4.30
    -------------------------------------------------------------------------
    Dry                       2     1.16        2     1.16        2     2.00
    -------------------------------------------------------------------------
    TOTALS                   11     7.32       21    11.76       24    10.73
    -------------------------------------------------------------------------


                                                Year Ended        Year Ended
                                               December 31,      December 31,
                                                      2006              2005
    -------------------------------------------------------------------------
                                            Gross      Net    Gross      Net
    -------------------------------------------------------------------------
    Success rate                              90%      90%      92%      81%
    -------------------------------------------------------------------------
    Cumulative wells drilled                   90    39.77       69    28.00
    -------------------------------------------------------------------------
    

    Property divestitures

    During 2006, RSX implemented an asset divestiture program
($11.2 million). Effective January 1, 2006, RSX divested its 0.44792% interest
in the Weyburn oil unit to a Calgary-based royalty trust for $11 million. At
the time of sale, RSX's net share of production from the Weyburn unit was
approximately 130 boepd with total proved reserves of 646 mstboe as evaluated
by GLJ Petroleum Consultants Ltd. effective December 31, 2005. RSX also
divested other non-core properties for $254k with approximate production of
20 boepd.
    Proceeds from the divestitures have been used to partially fund RSX's
drilling program including lands, seismic and drilling costs in the Hinton
area.

    Liquidity

    At December 31, 2006, the Company had a negative working capital position
of $19,993k, as compared to a negative working capital position of $21,241k at
December 31, 2005. At December 31, 2006, the Company had a demand credit
facility with a borrowing base of $22 million (December 31, 2005 -
$22 million). The facility bears interest at a Canadian chartered bank's prime
rate plus 1/4% per annum if the debt to equity ratio is less than or equal to
1:1 or at prime rate plus 3/4% per annum if the debt to equity ratio is
greater than 1:1. The Company utilizes guaranteed notes when appropriate.
Guaranteed notes bear interest at a Canadian chartered bank's guaranteed note
rate plus a per annum stamping fee of 1.5%. The credit facility is secured by
a general security agreement over all present and after-acquired property,
assets and undertakings of the Company.
    During 2006, RSX and its partners committed to a regional pipeline
expansion in the Hinton area. In order to initiate construction of the
pipeline, the Company posted a $3,547,800 letter of guarantee on September 4,
2006. The project was completed in early February 2007 and the letter of
guarantee was relieved.
    Under the terms of this facility, the Company is required to meet certain
reporting requirements and financial covenants. As at December 31, 2006, the
reporting requirements and financial covenants were met. A renewal of the
credit facility is currently underway. At December 31, 2006 RSX had drawn
$10.0 million on the facility.

    Equity

    As at December 31, 2006, the total common shares outstanding were
52,488,574.
    On November 17, 2006, the Company closed its previously announced
financing. On October 31, 2006, the Company had announced that it had entered
into a "bought deal" private placement financing of 3,000,000 common shares to
be issued on a "flow-through" basis at $4.05 per share for gross proceeds of
$12.15 million (the "Financing"). A commission of 6% was paid to underwriters
on the closing of the financing. The directors, officers and management of the
Company participated in the Financing with the purchase of 174,191
Flow-Through Shares. The Financing was completed through a syndicate of
underwriters led by Raymond James Ltd. RSX used the proceeds to fund its
ongoing exploration program.
    During October and November, 1,150,000 stock options were exercised that
were due to expire on November 14, 2006. Gross proceeds were $345k.
    On May 24, 2006, the Company issued 4,657,535 common shares at $3.65 per
share for gross proceeds of $17 million. A commission of 6% was paid to
underwriters on the closing of the financing. RSX used the proceeds for its
drilling and facilities program, for pipeline construction in the Hinton area
and to partially repay its credit facility.
    On May 23, 2006, RSX granted options to acquire an aggregate of 755,000
common shares to directors, officers and employees of RSX at a price of
$3.80 per share.

    Commitments

    RSX and its partners have committed to a regional pipeline expansion in
the Hinton area that will transport approximately 40 mmcf/d on a firm service
basis from joint interest lands. The project was completed in early February
2007. RSX has committed to 13,000 GJ/d of firm service at a cost of
approximately $0.34389/GJ for a 3 year term expiring February 2, 2010.

    
    --------------------------------
    Year         Commitment ($000's)
    --------------------------------
    2007                     $1,496
    --------------------------------
    2008                      1,632
    --------------------------------
    2009                      1,632
    --------------------------------
    2010                        135
    --------------------------------
    Total                    $4,895
    --------------------------------
    

    The Company has a rental commitment of approximately $176k in 2007 and
$165k in 2008 on its office premises that expires on November 30, 2008.

    Financial instruments

    The Company does not have any hedges in place as at December 31, 2006 and
does not anticipate any hedges in the immediate future.

    Off-balance sheet arrangements

    RSX does not have any special purposes entities nor is it a party to any
arrangements that would be excluded from the balance sheet.

    Related party transactions

    A director of the Company (James H. Coleman) is a partner of a law firm
(Macleod Dixon LLP) that provides legal services to the Company. During 2006,
the Company incurred costs of $93k (2005 - $15k), of which $42k is included in
accounts payable and accrued liabilities at December 31, 2006 (2005 - $5k). Of
the total amount, $22k (2005 - $15k) has been included in general and
administrative expenses and $71k (2005 - $Nil) included in share issuance
costs.
    A director of the Company (Michael L. Rose) is a joint venture partner
(Duvernay Oil Corp.) with the Company. At December 31, 2006, accounts
receivable included $2k (2005 - $949k) related to amounts owing to the Company
for its share of capital expenditures.
    These transactions are measured at the exchange amount, which is the
amount of consideration established, agreed to and paid by the related parties
based on standard commercial terms.

    Subsequent events

    On March 1, 2007, the Company issued 1,180,000 common shares at a price
of $3.40 per share and 1,560,000 common shares to be issued on a
"flow-through" basis at $4.50 per common share, for total gross proceeds of
$11,032,000. A commission of 6% was paid to underwriters on the closing of the
financing. RSX plans to use the proceeds for its drilling program and to
partially repay its credit facility. Income tax deductions will be renounced
to subscribers of the "flow-through" common shares effective December 31,
2007. The $7,020,000 "flow-through" commitment will have to be incurred on
qualifying expenditures by December 31, 2008.

    December 31, 2006 and December 31, 2005 Financial Statements and Notes,
as well as Management's Discussion and Analysis (MD&A), can be found on SEDAR
at www.sedar.com or on RSX's website at www.rsxenergy.com.





For further information:

For further information: RSX Energy Inc., Lee Baker, President, (403)
266-0600, (403) 266-0604 (Fax), Email: lbaker@rsxenergy.com

Organization Profile

RSX ENERGY INC.

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