RSX Announces Third Quarter Results and Receives Special MRL for Boundary Lake Oil Production



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

    CALGARY, Nov. 29 /CNW/ - RSX Energy Inc. ("RSX" or the "Company") is
pleased to announce third quarter results and to provide an operations update.

    Third Quarter Drilling
    ----------------------
    RSX participated in the drilling of 4 gross wells (2.1 net) in the third
quarter of 2007 and 18 wells (9.9 net) in the nine months ending September 30,
2007. During the third quarter, RSX drilled 1 (0.5 net) gas well at Boundary
Lake and 1 shallow dry hole (0.5 net). In addition, the Company drilled its
first development well in the Kiskatinaw GG Pool in the Boundary Lake area.
The well RSX Boundary Lake 16-30-85-12 W6M (RSX 90%) reached a total depth of
1874m in late July 2007 and was cased and completed as a Kiskatinaw oilwell.
At Rigel, British Columbia, RSX (21.2%) participated in the drilling of a dry
hole in August. The Rigel property was sold effective November 1, 2007.

    Third Quarter Capital Expenditures
    ----------------------------------
    RSX spent $4.77 million in the third quarter consisting of $3.98 million
for drilling and completion, $0.53 million for production equipment and
$0.26 million for land and seismic.

    Third Quarter Production
    ------------------------
    Third quarter production was down 9% over the second quarter due to
regulatory restrictions on production at Boundary Lake and significant
downtime in both the Hinton and Willesden Green areas in September.
    At Boundary Lake, RSX estimates that 300 - 400 Boepd of incremental
production was shut-in for the third quarter due to regulatory restrictions on
new production. In May 2007 RSX applied for Good Production Practice (GPP) for
the pool and on November 15, 2007 RSX was granted a special Maximum Rate
Limitation (MRL) which permits production of up to 50m(3)/d/well for each of
the two wells currently in the Kiskatinaw "GG" Pool. Total production for the
Boundary Lake area has been increased to approximately 700 Boepd as a result
of the special MRL. In September 2007, production at Hinton was down for an
extended period as dehydration and compressor installation were completed. At
Willesden Green, Alberta, RSX had approximately 125 Boepd shut-in for the
month of September due to plant turn around.
    RSX revises its 2007 exit forecast to 2,300 - 2,400 Boepd which is
primarily due to the property dispositions effective November 1, 2007.

    Asset Divestitures
    ------------------
    On November 2, 2007, RSX announced that it had entered into three
separate agreements for the sale of its petroleum and natural gas assets in
the Willesden Green and Randell areas of Alberta and the Rigel area of
Northern British Columbia. The total sale price for the three properties was
$20.15 million and the transactions closed by November 9, 2007.

    Core Areas
    ----------

    Hinton
    ------
    RSX has an average working interest of 70% in 32 sections of land in the
Hinton area of northern Alberta with 16 sections being 100% working interest
lands.
    In the third quarter, RSX participated in the completion of the well
Cabot RSX Hinton 9-20-51-25 W5M in which RSX has a 40% working interest. The
well was drilled in the second quarter of 2007. Two significant hydrocarbon
zones were encountered in the Upper Spirit River formation and the lower zone
was completed and put on-stream in early August 2007 with the upper zone
expected to be completed by early December 2007.
    Downspacing applications were submitted in June and July of 2007. RSX
expects to have approvals for downspacing in sections 15 and 16-51-25 W5M in
December of this year with additional downspacing approvals for 11 section in
January 2008.
    RSX (25%) participated in the drilling of the well Cabot RSX Hinton
9-16-51-25 W5M which was cased to a total depth of 3,481m in early October
2007. The well offsets the discovery well at 11-16-51-25 W5M. Completion of
two Spirit River zones began on November 16 and is expected to take two weeks.
RSX plans to move the service rig from the 9-16 dual zone completion to the
9-20 uphole completion.
    RSX spudded its sixth well in the Hinton area on November 12, 2007 with
the drilling of the well Cabot RSX Hinton 13-20-51-25 W5M. RSX has a 40%
interest in the well which offsets the 9-20 producer. The well is expected to
take 40-45 days to drill with a prognosed total depth of 3,500m. RSX will
provide updates on the completions of 9-16 and 9-20 wells once available.

    Boundary Lake
    -------------
    In the third quarter, the Company drilled its first development well at
Boundary Lake offsetting the discovery well drilled in February 2007. The
well, RSX et al Boundary Lake 16-30-85-12 W6M (RSX 90%), was drilled and
completed in early August and flowed light sweet crude at rates of 300 -
400 Boepd from the Kiskatinaw formation.
    The AEUB assigned allowable production rates for the 16-30 and 13-29
discovery well of 14.1m(3)/d per well. RSX applied for good production
practice (GPP) for the two oilwells assigned to the Kiskatinaw GG Pool. On
November 15, 2007 RSX was granted a special Maximum Rate Limitations (MRL) by
the AEUB of 50m(3)/d/per well subject to gas/oil ratio, penalties if
applicable. The special MRL allows RSX to continue with its development
drilling program which, if successful, may permit a waterflood study and
application to be forwarded to the AEUB for approval.
    RSX (90%) expects to spud its third well in the pool in early December.
The well RSX Boundary Lake 14-30-85-12 W6M is defined by 3D seismic and has a
prognosed TD of approximately 1,900m. RSX plans to have the well drilled and
cased prior to year-end with completion and tie-in early in January 2008.

    Gold Creek
    ----------
    During the third quarter, RSX acquired and reprocessed a 10 square mile
3D seismic survey in the Gold Creek area of northern Alberta. The database
compliments RSX's existing 250 mile 2D seismic coverage in the area and was
required to further delineate Beaverhill Lake sand anomalies over RSX lands in
the area. RSX is currently surveying a well at 6-18-70-3 W6M to test
Beaverhill Lake sand oil potentials area. RSX has a 100% interest in the lands
and expects to have the location drill ready by mid-January 2008.
    The Company also expects to drill two development locations in the winter
of 2008 offsetting its Gething oil discovery made in March 2007. RSX received
Good Production Practice (GPP) in September 2007 for the well RSX et al Gold
Creek 4-14-70-3 W6M which is currently producing approximately 135 Boepd gross
from the Gething formation. The Company has a 50% interest in the well.
Development drilling is expected to begin in mid-January 2008.

    
    OPERATING AND FINANCIAL SUMMARY

    2007 Nine Month and Q3 HIGHLIGHTS
    ---------------------------------
    -   Nine month drilling included 18 gross wells (9.81 net).
    -   Nine month petroleum and natural gas sales up 55% over same period
        2006.
    -   Q3 petroleum and natural gas sales up 51% over 2006 Q3.
    -   Nine month production up 62% over same period 2006.
    -   Q3 production up 61% over 2006 Q3.
    -   Nine month operating netback of $30.21/boe (before G&A and interest
        cost).
    -   Q3 operating netback of $27.27/boe (before G&A and interest cost).
    -   Nine month cash flow from operations up 46% over same period 2006.
    -   Q3 cash flow from operations up 19% over 2006 Q3.
    -   Nine month cash flow from operations of $0.20 per share basic and
        diluted as compared to $0.16 per share basic and $0.15 per share
        diluted in same period 2006.
    -   Q3 cash flow from operations of $0.06 per share basic and diluted as
        compared to $0.05 per share basic and diluted in 2006 Q3.
    -   Nine month net loss of $4,269k as compared to net income of $1,034k
        in same period 2006.
    -   Nine month capital expenditures of $29,203k, down 7% over same period
        2006 capital expenditures of $31,287k.


                               Three     Three      Nine      Nine
                               Month     Month    Months    Months
                              Period    Period    Period    Period  % Change
                               Ended     Ended     Ended     Ended    Period
                            Sept. 30, Sept. 30, Sept. 30, Sept. 30,     Over
    Highlights                  2007      2006      2007      2006    Period
    -------------------------------------------------------------------------
    Financial ($000's except
     per share data)

      Petroleum and natural
       gas sales               7,095     4,696    22,734    14,662       55%
      Cash flow from
       operations              3,028     2,536    10,671     7,292       46%
        Per share - basic       0.06      0.05      0.20      0.16       25%
        Per share - diluted     0.06      0.05      0.20      0.15       33%
      Net income (loss)       (1,419)      412    (4,269)    1,034     (513%)
        Per share - basic
         and diluted           (0.03)     0.01     (0.08)     0.02     (500%)
      General &
       administrative            484       396     1,694     1,630        4%
      Capital expenditures     4,767     7,960    29,203    31,287       (7%)
      Working capital
       deficiency                                (28,212)  (17,971)      57%
      Property
       divestitures(*)             -         -         -   (11,223)        -
      Shareholders' equity                        59,684    44,307       35%
      Total assets                                99,173    72,016       38%

    Operating (average
     daily production)
      Oil (bopd)                 627       459       672       477       41%
      Natural gas (mcfd)       5,633     3,077     5,527     3,045       82%
      Equivalent barrels
       (boepd)                 1,566       972     1,593       984       62%

    (*) 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 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.

    On November 2, 2007, RSX announced that it had entered into three
    separate agreements for the sale of its petroleum and natural gas assets
    in the Willesden Green and Randell areas of Alberta and the Rigel area of
    Northern British Columbia. The total sale price for the three properties
    was $20.15 million and the transactions closed by November 9, 2007.


                                            Nine Month  Nine Month
                                                Period      Period  % Change
                                                 Ended       Ended    Period
                                              Sept. 30,   Sept. 30,     Over
                 Highlights                       2007        2006    Period
    -------------------------------------------------------------------------
    Land Position
      Net acres                                 81,150      81,919       (1%)
    Wells Drilled
      Gross                                         18          10       80%
      Net                                          9.8         4.4      123%
    Common Share Information
      Shares outstanding - basic            55,298,574  48,338,574       14%
      Shares outstanding - diluted          58,188,574  51,193,574       14%
      Weighted average during the period
        Basic                               54,659,490  45,553,312       20%
        Diluted                             54,659,490  47,130,028       16%
      Closing share price, period end ($)         2.30        3.75      (39%)
      Weighted average share price ($)            2.93        3.37      (13%)
      Trading volume                        14,846,188  18,900,949      (21%)
      Daily average trading volume              78,551     101,075      (22%)


    SUMMARY OF QUARTERLY RESULTS FOR 2007, 2006 AND 2005

                                                     2007               2006
                                     ----------------------------------------
                                            Q3        Q2        Q1        Q4
                                     ----------------------------------------
    Financial ($000's except
     per share data)
      Petroleum and natural
       gas sales                         7,095     8,469     7,170     4,704
      Cash flow from operations          3,028     3,996     3,647     2,238
        Per share - basic                 0.06      0.07      0.07      0.05
        Per share - diluted               0.06      0.07      0.07      0.05
      Net income (loss)                 (1,419)   (1,833)   (1,017)     (502)
        Per share - basic
         and diluted                     (0.03)    (0.03)    (0.02)    (0.01)
      Capital expenditures               4,767     5,809    18,627    15,908
      Working capital deficiency       (28,212)  (26,514)  (24,699)  (19,993)
      Total shareholders' equity        59,684    60,897    61,793    55,761
      Total assets                      99,173    99,952    99,941    86,270

    Operating (average daily
     production)
      Equivalent barrels (boepd)         1,566     1,720     1,492     1,035

    Common Share Information (000's)
      Shares outstanding - basic        55,299    55,229    55,229    52,489
      Shares outstanding - diluted      58,189    58,189    56,934    54,194
      Weighted average during
       the period
        Basic                           54,659    54,335    53,432    46,814
        Diluted                         54,659    54,732    53,432    46,814


                                                     2006               2005
                                     ----------------------------------------
                                            Q3        Q2        Q1        Q4
                                     ----------------------------------------
    Financial ($000's except
     per share data)
      Petroleum and natural
       gas sales                         4,696     4,898     5,068     6,484
      Cash flow from operations          2,536     2,156     2,600     3,800
        Per share - basic                 0.05      0.05      0.06      0.09
        Per share - diluted               0.05      0.04      0.06      0.09
      Net income (loss)                    413       258       363       681
        Per share - basic
         and diluted                      0.01      0.00      0.01      0.02
      Capital expenditures               7,960    11,695    11,633     7,101
      Working capital deficiency       (17,971)  (12,600)  (19,305)  (21,241)
      Total shareholders' equity        44,307    43,734    26,432    26,041
      Total assets                      72,016    66,817    56,856    58,505

    Operating (average daily
     production)
      Equivalent barrels (boepd)           972       971     1,011     1,058

    Common Share Information (000's)
      Shares outstanding - basic        48,339    48,154    43,202    43,202
      Shares outstanding - diluted      51,194    51,194    45,781    45,781
      Weighted average during
       the period
        Basic                           45,553    44,204    43,202    42,945
        Diluted                         47,130    45,711    45,293    44,581


    OPERATING

    Operating results for the three and nine months ended September 30, 2007
and 2006 and for the year ended December 31, 2006 are:

    -------------------------------------------------------------------------
    Operating Results                              Three Months Ended
    -------------------------------------------------------------------------
    Production Netbacks                     Sept. 30, 2007    Sept. 30, 2006
    -------------------------------------------------------------------------

    Average daily natural gas (mcfd)        5,633             3,077
    Average daily oil & ngl's (bopd)          627               459
    Average daily oil equivalent
     (boepd at 6:1)                         1,566               972
    Average natural gas price (mcf)         $5.20             $5.62
    Average oil and ngl's price (bbl)      $76.30            $73.51

    Netbacks                               $000's      Boe   $000's      Boe
    --------                               ------      ---   ------      ---
    Revenue                                $7,095   $49.25   $4,696   $52.52
    Royalties                               1,502    10.43      730     8.17
    Production                              1,053     7.31      777     8.68
    Transportation                            611     4.24       96     1.07
                                          -----------------------------------
                                           $3,929   $27.27   $3,093   $34.60
    Administrative costs                      484     3.36      396     4.43
    Interest expense                          417     2.89      161     1.81
                                          -----------------------------------
                                           $3,028   $21.02   $2,536   $28.36
    Current income tax expense                  0     0.00        0     0.00
    -------------------------------------------------------------------------
    Cash flow from operations              $3,028   $21.02   $2,536   $28.36
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Operating Results            Nine Months Ended             Year Ended
    -------------------------------------------------------------------------
    Production Netbacks   Sept. 30, 2007    Sept. 30, 2006    Dec. 31, 2006
    -------------------------------------------------------------------------

    Average daily
     natural gas (mcfd)   5,527             3,045             3,159
    Average daily
     oil & ngl's (bopd)     672               477               471
    Average daily oil
     equivalent
     (boepd at 6:1)       1,593               984               997
    Average natural
     gas price (mcf)      $6.72             $6.64             $6.79
    Average oil and
     ngl's price (bbl)   $68.68            $70.21            $67.15

    Netbacks             $000's      Boe   $000's      Boe   $000's      Boe
    --------             ------      ---   ------      ---   ------      ---
    Revenue             $22,734   $52.28  $14,662   $54.56  $19,366   $53.21
    Royalties             4,458    10.25    2,253     8.39    2,941     8.08
    Production            3,460     7.96    2,710    10.08    3,744    10.29
    Transportation        1,679     3.86      261     0.97      354     0.97
                        -----------------------------------------------------
                        $13,137   $30.21   $9,438   $35.12  $12,327   $33.87
    Administrative costs  1,694     3.89    1,630     6.07    2,137     5.88
    Interest expense        772     1.78      487     1.81      631     1.73
                        -----------------------------------------------------
                        $10,671   $24.54   $7,321   $27.24   $9,559   $26.26
    Current income
     tax expense              0     0.00       29     0.11       29     0.08
    -------------------------------------------------------------------------
    Cash flow from
     operations         $10,671   $24.54   $7,292   $27.13   $9,530   $26.18
    -------------------------------------------------------------------------
    

    Production and pricing

    During 2007 Q3, production averaged 1,566 boepd, up 61% over 2006 Q3
daily production of 972 boepd. 2007 Q3 over 2007 Q2 (1,720 boepd), production
volumes were down 9%. During September 2007, production volumes were
significantly down due to a plant turnaround in Willesden Green (down
125 boepd), and due to the installation of dehydrator and compression
facilities in the Hinton (down 120 boepd). As well, during the 2007 Q3,
Boundary Lake & Randell, production volumes were restricted due to Alberta
Energy and Utilities Board "EUB" allowables and production penalties (down
300 - 400 bbls for the quarter). On November 15, 2007, the two Boundary Lake
oil wells in the Kiskatinaw GG Pool were granted a special Maximum Rate
Limitation (MRL) of 50 m(3)/d per well. The special MRL expires on June 1,
2008. RSX will continue to work with the EUB as the pool is further developed.
For 2007 Q3, oil & natural gas liquids (ngl's) production was up 37% and
natural gas production was up 83% over the same period last year.
    For 2007 Q3, production was comprised of 40% oil and natural gas liquids
and 60% natural gas. During 2006 Q3, the production mix was 47% oil and
natural gas liquids and 53% natural gas. This production change is a result of
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. As RSX continues to focus on the Hinton gas discovery,
there is potential for 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 2007 Q3 was $76.30/bbl, with natural gas at $5.20/mcf, as compared to 2006
Q3 pricing of $73.51/bbl for crude oil and natural gas liquids and $5.62/mcf
for natural gas. Crude oil had a 4% price increase while natural gas pricing
had a 7% decrease. For the 2007 Q3, operating netbacks (before G&A and
interest expense) were $27.27/boe down 21% from $34.60/boe during the same
period last year. The decrease is due to an increased weighting to natural gas
and with natural gas ($5.20 mcf) barrel of oil equivalents (6:1) of
$31.20/boe.
    For the nine months ended September 30, 2007, production averaged
1,593 boepd, up 62% over daily production of 984 boepd for the same period
last year. For the nine months ended September 30, 2007, production was
comprised of 42% oil and natural gas liquids and 58% natural gas. The blended
average selling price for crude oil and natural gas liquids for the nine
months ended September 30, 2007, was $68.68/bbl, with natural gas at
$6.72/mcf, as compared to pricing of $70.21/bbl for crude oil and natural gas
liquids and $6.64/mcf for natural gas for the same period last year. Crude oil
had a 2% price decrease while natural gas pricing had a 1% increase. For the
nine months ended September 30, 2007, overall operating netbacks (before G&A
and interest expense) were $30.21/boe down 14% from $35.12/boe during the same
period last year.
    On November 2, 2007, RSX announced that it had entered into three
separate agreements for the sale of its petroleum and natural gas assets in
the Willesden Green and Randell areas of Alberta and the Rigel area of
Northern British Columbia. Effective November 1, 2007, the Company's
production divestitures were approximately 525 boepd in the three areas.

    Petroleum and natural gas sales

    For 2007 Q3, revenue from oil and gas sales before royalties was $7,095k
($49.25/boe), a 51% increase over 2006 Q3 oil and gas revenues of $4,696k
($52.52/boe). The revenue increase is due to the production increase. The
blended commodity price decreased 6% over 2006 Q3. RSX has not entered into
any hedging or forward contracts to lock-in commodity prices.
    For the nine months ended September 30, 2007, revenue from oil and gas
sales before royalties was $22,734k ($52.28/boe), a 55% increase over oil and
gas revenues of $14,662k ($54.56/boe) over the same period last year. The
revenue increase is related to the production increase partially offset by a
4% decrease in blended commodity price.

    Royalties

    For 2007 Q3, royalties were $1,502k ($10.43/boe) as compared to $730k
($8.17/boe) for the same period in 2006 Q3. Overall, royalties increased 106%
period over period mostly attributable to increased production volumes. The
increase per unit boe was up 28% period over period as a result of RSX having
fully utilized the royalty holiday/rate reduction programs in Hinton and
Randell areas. During 2007 Q3, new Boundary Lake and Hinton wells have been
charged with crown royalties - these wells may be deemed eligible for royalty
holiday/rate reduction programs and crown royalties would be credited
accordingly.
    For the nine months ended September 30, 2007, royalties were $4,458k
($10.25/boe) as compared to $2,253k ($8.39/boe) for the same period in 2006.
RSX was been advantaged by a Deep Gas Royalty Holiday Program in the Hinton
area; as the exemption has been fully utilized, RSX is seeing an expected
increase in royalties in 2007.
    The impact of the new royalty regime and related impact on the Company is
still under review awaiting final implementation by the Alberta provincial
government.

    Production expenses

    Production expenses totaled $1,053k ($7.31/boe) in 2007 Q3 as compared to
$777k ($8.68/boe) during the same period in 2006 Q3. Total production expenses
period over period were up 36% along with production increases of 61%. Per
unit costs period over period decreased 16% due to the efficiencies of
additional volumes within existing infrastructure. The Company is advantaged
in the Hinton area where the natural gas is dry and sweet, and meets pipeline
specifications with lower production expenses. The Hinton natural gas is
subject to firm pipeline commitments.
    For the nine months ended September 30, 2007, production expenses totaled
$3,460k ($7.96/boe) as compared to $2,710k ($10.08/boe) during the same period
in 2006. The decrease in per unit production costs is a result of increased
production volumes, especially in the Hinton area.

    Transportation

    In 2007 Q3, transportation costs were $611k ($4.24/boe) as compared to
$96k ($1.07/boe) in 2006 Q3. Transportation costs were up 536%, with a unit
per boe increase of 296% due to the natural gas pipeline commitment in the
Hinton area. RSX and its partners 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 ($136k per month) for a three year term expiring
February 2, 2010.
    For the nine months ended September 30, 2007, transportation costs were
$1,679k ($3.86/boe) as compared to $261k ($0.97/boe) in the same period last
year. The increase in costs is due to the natural gas pipeline commitment at
Hinton (described above) along with increased production of oil and ngl's at
Boundary Lake.

    General and administrative costs

    General and administrative costs for 2007 Q3 were $484k ($3.36/boe) as
compared to $396k ($4.43/boe) for the same period last year. The increase in
costs is due to corporate growth and increased reporting costs. The 24%
decrease in general and administrative costs per boe is a result of increasing
production volumes. The capitalized administrative costs in 2007 Q3 general
and administrative costs were $83k as compared to $78k in 2006 Q3.
    General and administrative costs for the nine months ended September 30,
2007 were $1,694k ($3.89/boe) as compared to $1,630k ($6.07/boe) for the same
period last year. Capitalized administrative costs for the nine months ended
September 30, 2007 were $244k as compared to $226k in the same period last
year. With the ability to add increased production volume with modest
infrastructure changes, RSX expects to continue to lower G&A per boe. At
September 30, 2007, RSX had nine employees and three part-time consultants, no
change since October 2004.

    Interest on bank debt

    Interest expense for 2007 Q3 was $417k ($2.89/boe) as compared to $161k
($1.81/boe) in 2006 Q3. Included in 2007 Q3 are bank renewal fees of $109k.
The Company has chosen to utilize debt financing to partially fund its
development and exploration capital expenditure program. Additional interest
expense is also due to an increase in the prime rate of interest. Interest
expense for the nine months ended September 30, 2007 was $772k ($1.78/boe) as
compared to $487k ($1.81/boe) in the same period last year.

    Current income tax expense

    For the nine months ended September 30, 2007, current income tax expense
was $Nil ($0.00/boe), as compared to $29k ($0.11/boe) during the same period
in 2006. In 2006, the current tax expense related to the final payment of
Saskatchewan Capital Tax in regards to the Weyburn Unit.

    Cash flow from operations

    Cash flow from operations for 2007 Q3 was $3,028k ($21.02/boe), a 19%
increase over $2,536k ($28.36/boe) in 2006 Q3. Cash flow from operations for
2007 Q3 was down 24% over 2007 Q2 cash flow from operations of $3,996k
($25.53/boe) due to decreased production volume along with a lower per boe
cash flow netback. Cash flow from operations for 2007 Q3 was $0.06 per share
basic and diluted as compared to $0.05 per share basic and diluted in 2006 Q3.
The cash flow netback for 2007 Q3 was $21.02/boe, a decrease of 26% over the
$28.36/boe netback in the same period last year. The lower netbacks are
attributable to increasing natural gas production and lower natural gas prices
- natural gas barrel of oil equivalents (6:1) of $31.20/boe.
    For the nine months ended September 30, 2007, cash flow from operations
was $10,671k ($24.54/boe), up 46% as compared to $7,292k ($27.13/boe) during
the same period in 2006. Cumulative nine months ended September 30, 2007 cash
flow from operations was $0.20 per share basic and per share diluted as
compared to $0.16 per share basic and $0.15 per share diluted in the same
period in 2006. Cash flow netbacks for the nine months ended September 30,
2007 were $24.54/boe, a decrease of 10% over the $27.13/boe cash flow netback
in the same period last year. Netbacks have been affected by an increasing
percentage of natural gas production (due to the Hinton gas discovery) as
compared to oil and ngl's. For the nine months ended September 30, 2007,
production was 42% oil & ngl's and 58% natural gas.

    Stock-based compensation

    For 2007 Q3, stock-based compensation was $164k as compared to $106k for
the same period last year. Using the Black-Scholes option pricing model, the
stock-based compensation charge relates to options issued in May 2007 ($86k)
and in May 2006 ($78k).
    For the nine months ended September 30, 2007, stock-based compensation
was $1,181k as compared to $847k for the same period last year.

    Depletion, depreciation and accretion

    For 2007 Q3, depletion, depreciation and accretion expenses were $4,790k
as compared to the $1,855k recorded in 2006 Q3, up 158%. The 2007 Q3 depletion
unit rate on petroleum and natural gas properties was $34.86 per boe, up 64%
as compared to a $21.31 per boe depletion unit rate during 2006 Q3. During
2007 Q1, the depletion rate on petroleum and natural gas properties was
$38.94 per boe based on the GLJ Petroleum Consultants Ltd. reserve evaluation
report at March 31, 2007. Depletion rates are based on the Proved category.
The independent reserve evaluation restricts full assignment of Proved
reserves for late period additions with no production history. If, and as,
production history is attained, the Company expects to move Probable reserves
to the Proved category; thus, lowering the per unit depletion rate. The
increase is due to increasing costs related to rigs, services and equipment.
During 2007 Q3, the Company has made reasonable internal adjustments based on
new wells and production history.
    For the nine months ended September 30, 2007, depletion, depreciation and
accretion expenses were $15,031k as compared to the $5,693k recorded in the
same period last year. The increase is driven by the production volume
increase as well as the depletion cost per unit increase. As the Company
continues to establish production history, add reserves from its drilling
program and convert probable reserves into proved reserves, the depletion and
depreciation rate is expected to be maintained and lowered.

    Income taxes

    Future income tax expense in 2007 Q3 was a recovery of $508k due to the
net loss for the period, as compared to an expense of $162k in 2006 Q3. Future
income tax expense for the nine months ended September 30, 2007 was a recovery
of $1,272k as compared to a recovery of $281k in the same period last year.
The recovery in the same period last year was largely attributable to the
recognition of the decreasing tax rate from 37.62% to 34.12%.
    During November 2006, the Company issued 3,000,000 flow-through common
shares at a price of $4.05 per common share for gross proceeds of
$12.15 million. Income tax deductions of $12.15 million were renounced to
subscribers effective December 31, 2006. The Company had spent $3.1 million
eligible expenditures to December 31, 2006 and during 2007 Q1 fulfilled the
balance of the obligation. The related income tax impact was recorded in 2007
Q1. The approximate resource tax pool balances, after the $12.15 million
renouncement, remaining at September 30, 2007 are as follows:

    
    -------------------------------------------------------------------------
    Approximate Tax Pool Balances ($000's)                    Sept. 30, 2007
    -------------------------------------------------------------------------
    Undepreciated Capital Cost                                      $ 18,781
    Canadian Exploration Expense                                      23,897
    Canadian Development Expense                                      13,555
    Canadian Oil and Gas Property Expense                             12,683
    Share Issue Costs                                                  2,703
    Non-Capital Losses                                                   306
    ACRI                                                                 901
    -------------------------------------------------------------------------
    Tax Pool Balances                                               $ 72,826
    -------------------------------------------------------------------------
    

    On March 1, 2007, the Company issued an additional 1,560,000 common
shares on a "flow-through" basis at $4.50 per common share, for total gross
proceeds of $7,020,000. Income tax deductions on this issue will be renounced
to subscribers of the "flow-through" common shares effective December 31,
2007. The approximate tax pool balances disclosed do not include the effect of
this renouncement. The $7,020,000 "flow-through" commitment will have to be
incurred on qualifying expenditures by December 31, 2008.

    Net income

    Net income for 2007 Q3 was a loss of $1,419k compared to net income of
$412k during 2006 Q3. Income for 2007 Q3 was a loss of $0.03 per share basic
and diluted. The net loss is attributable to increased depletion costs.
Depletion rates are based on the Proved reserve category. As production
history is attained, the Company expects to move Probable reserves to the
Proved category; thus, lowering the per unit depletion rate.
    Net income for the nine months ended September 30, 2007 was a loss of
$4,269k compared to net income of $1,034k during the same period last year.
Income for the nine months ended September 30, 2007 was a loss of $0.08 per
share basic and diluted. The net loss is attributable to increased depletion
and stock-based compensation costs (both non-cash items) as well as increased
production and transportation costs.

    CAPITAL EXPENDITURES

    Capital expenditures in 2007 Q3 were $4,767k, down 40% as compared to the
$7,960k in 2006 Q3. For the nine months ended September 30, 2007, capital
expenditures were $29,203k, down 7% as compared to $31,287k for the same
period last year. The details of capital expenditures by type are:

    
    -------------------------------------------------------------------------
                       Three     Three      Nine      Nine
                       Month     Month     Month     Month
    Capital           Period    Period    Period    Period              Year
     Expenditures      Ended     Ended     Ended     Ended             Ended
     By Type         Sept 30,  Sept 30,  Sept 30,  Sept 30,   % of  December
     ($000's)           2007      2006      2007      2006   Total  31, 2006
    -------------------------------------------------------------------------
    Land                 $64    $1,436      $939   $11,170      3%   $11,775
    -------------------------------------------------------------------------
    Geological/
     geophysical         193       371     1,395     2,472      5%     2,742
    -------------------------------------------------------------------------
    Drilling &
     completion        3,981     5,372    17,764    10,691     61%    24,309
    -------------------------------------------------------------------------
    Production
     equipment           528       776     9,103     6,938     31%     8,353
    -------------------------------------------------------------------------
    Office assets          1         5         2        16      0%        17
    -------------------------------------------------------------------------
      TOTAL           $4,767    $7,960   $29,203   $31,287    100%   $47,196
    -------------------------------------------------------------------------
    

    RSX exits 2007 Q3 with 66,413 net undeveloped acres at an estimated value
of approximately $23 million, based on a Seaton-Jordan independent evaluation
as at March 31, 2007 and updated with 2007 Q2 and Q3 actuals. The focus of
2007 Q3 capital expenditures was in drilling and completion (84% of total),
along with related production equipment (11% of total). For the nine months
ended September 30, 2007, drilling and completion costs were $17,764k, a 66%
increase over the $10,691k in the same period last year. During 2007 Q3, the
Company drilled four gross wells (2.11 net). For the nine months ended
September 30, 2007, RSX has participated in drilling 18 gross wells (9.81 net)
as compared to 10 gross wells (4.44 net) during the same period last year.
Production equipment costs were up 31% 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, Boundary Lake, Randell and Gold
Creek areas.
    Of the total capital expenditures of $29,203k for the nine months ended
September 30, 2007, RSX spent $8,783k (30%) in Randell, $5,758k (20%) in the
Hinton, $5,254k (18%) in the Boundary Lake and $4,245k (15%) in Gold Creek.
Randell and Gold Creek are winter only areas. During the balance of 2007, the
Company will focus its capital expenditures on the Hinton and Boundary Lake
areas.

    
    -------------------------------------------------------------------------
                           Three       Nine
                           Month      Month
                          Period     Period                  Year
    Capital                Ended      Ended                 Ended
     Expenditures        Sept 30,   Sept 30,         %    Dec. 31,         %
     By Area ($'000)        2007       2007   Of Total       2006   Of Total
    -------------------------------------------------------------------------
    Hinton                $1,184     $5,758        20%    $16,022        34%
    -------------------------------------------------------------------------
    Randell                  264      8,783        30%      8,603        18%
    -------------------------------------------------------------------------
    Gold Creek               100      4,245        15%      8,164        18%
    -------------------------------------------------------------------------
    Boundary Lake          2,526      5,254        18%      3,937         8%
    -------------------------------------------------------------------------
    Willesden Green          225      1,553         5%      2,436         5%
    -------------------------------------------------------------------------
    Karr                       1        419         1%      1,784         4%
    -------------------------------------------------------------------------
    Other                    466      3,189        11%      6,233        13%
    -------------------------------------------------------------------------
    Office assets              1          2         0%         17         0%
    -------------------------------------------------------------------------
      TOTALS              $4,767    $29,203       100%    $47,196       100%
    -------------------------------------------------------------------------
    

    Drilling results

    During 2007 Q3, the Company participated in drilling four gross wells
(2.11 net) - three Boundary Lake wells (one gas (0.50 net), one oil (0.90 net)
and one dry (0.50 net) and one Rigel well (dry, 0.21 net).
    During the nine months ended September 30, 2007, the Company participated
in the drilling of 18 gross wells (9.81 net). Wells drilled in the nine months
ended Sept 30, 2007 were:

    
                    5 Randell (oil)           2.50 net
                    2 Boundary Lake (oil)     1.90 net
                    1 Boundary Lake (gas)     0.50 net
                    1 Hinton (gas)            0.40 net
                    1 Willesden Green (gas)   0.30 net
                  Dry holes were:
                    3 Gold Creek              1.50 net
                    2 Randell                 1.00 net
                    1 Bezanson                1.00 net
                    1 Rigel                   0.21 net
                    1 Boundary Lake           0.50 net


    -------------------------------------------------------------------------
                       Three Month    Nine Month    Nine Month
                      Period Ended  Period Ended  Period Ended    Year Ended
                           Sept 30,      Sept 30,      Sept 30,  December 31,
    Drilling Activity         2007          2007          2006          2006
    -------------------------------------------------------------------------
                      Gross    Net  Gross    Net  Gross    Net  Gross    Net
    -------------------------------------------------------------------------
    Oil                   1   0.90      7   4.40      6   2.59     10   5.59
    -------------------------------------------------------------------------
    Gas                   1   0.50      3   1.20      3   0.85      9   5.01
    -------------------------------------------------------------------------
    Dry                   2   0.71      8   4.21      1   1.00      2   1.16
    -------------------------------------------------------------------------
      TOTALS              4   2.11     18   9.81     10   4.44     21  11.76
    -------------------------------------------------------------------------


                         Nine Month
                       Period Ended    Year Ended
                           Sept. 30,  December 31,
                               2007          2006
    ----------------------------------------------
                       Gross    Net  Gross    Net
    ----------------------------------------------
    Success rate         56%    57%    90%    90%
    Cumulative wells
     drilled             108  49.58     90  39.77
    

    Liquidity

    At September 30, 2007, the Company had a negative working capital
position of $28,212k, as compared to a negative working capital position of
$26,514k at June 30, 2007 (December 31, 2006 - $19,993k). At September 30,
2007, the Company had a demand credit facility with a borrowing base of
$22 million (June 30, 2007 - $22 million). Under the terms of this facility,
the Company is required to meet certain reporting requirements and financial
covenants. As at September 30, 2007, the financial covenants were not met. A
waiver has been issued by the lender, conditional on the Company being in
compliance with all covenants as of December 31, 2007. At September 30, 2007,
RSX had drawn $19.3 million on the facility. Based on the asset divestitures,
the demand credit facility has been adjusted to a borrowing base of
$13.0 million effective November 13, 2007. Based on 2007 Q4 new wells and
production history, the Company will continue to negotiate the demand credit
facility.
    On November 2, 2007, RSX announced that it had entered into three
separate agreements for the sale of its petroleum and natural gas assets in
the Willesden Green and Randell areas of Alberta and the Rigel area of
Northern British Columbia. The total sale price for the three properties was
$20.15 million with an effective date for the sales of November 1, 2007. In
the transactions, RSX divested 720 Mstboe of total proved reserves and
1,221 Mstboe of proved plus probable reserves as evaluated by GLJ Petroleum
Consultants Ltd. effective March 31, 2007 and adjusted for production. The
transactions equated to $28.00 per total proven barrel and $16.50 per proved
plus probable barrel. Average production of 525 Boepd for the three areas
equated to approximately $38,500 per flowing Boe. Two of the transactions
closed on November 1, 2007 while the third closed on November 9, 2007.
    Proceeds from the sales will be used to partially pay down bank debt and
to fund exploration and development drilling programs in RSX's operated core
areas of Hinton, Boundary Lake and Gold Creek.

    Capital resources

    RSX relies on various sources of funding to support its growing capital
expenditure program including, but not limited to, the following:

    
    -   internally generated cash flow provides the minimum level of funding
        on which the Company's annual capital expenditure program is based;
    -   debt may be utilized to expand capital programs when it is deemed
        appropriate;
    -   new equity, if available and if on favorable terms, may be utilized
        to expand exploration programs; and
    -   potential sale of capital assets.
    

    Equity

    As at September 30, 2007, total common shares outstanding were
55,298,574.
    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 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. RSX used 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.
    An aggregate of 1,255,000 options to purchase common shares at a price of
$2.59 per share were granted to officers, directors and employees of RSX on
May 22, 2007. Vesting for directors is immediate. Vesting for employees is 1/3
on issuance, 1/3 on the first year anniversary date, and the remaining 1/3 on
the second year anniversary date. These options have an expiry date of May 21,
2012.

    Commitments

    RSX and its partners committed to a regional pipeline expansion in the
Hinton area. The pipeline 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                       $411
    --------------------------------
    2008                      1,636
    --------------------------------
    2009                      1,632
    --------------------------------
    2010                        143
    --------------------------------
    Total                    $3,822
    --------------------------------
    

    The Company has a rental commitment of approximately $44k in 2007 and
$165k in 2008 on its office premises, which expires on November 30, 2008.

    Financial instruments

    There have been no changes in the Company's financial instruments since
December 31, 2006.

    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 the
nine month period ended September 30, 2007, the Company incurred costs of $72k
(September 30, 2006 - $53k), of which $29k is included in accounts payable and
accrued liabilities at September 30, 2007. Of the total amount, $36k
(September 30, 2006 - $19k) has been included in general and administrative
expenses and $36k (September 30, 2006 - $34k) included in share issuance
costs.
    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 event

    On November 2, 2007, RSX announced that it had entered into three
separate agreements for the sale of its petroleum and natural gas assets in
the Willesden Green and Randell areas of Alberta and the Rigel area of
Northern British Columbia. The total sale price for the three properties was
$20.15 million and the transactions closed by November 9, 2007.
    Based on the asset divestitures, the demand credit facility has been
adjusted to a borrowing base of $13.0 million effective November 13, 2007.
Based on 2007 Q4 new wells and production history, the Company will continue
to negotiate the demand credit facility.
    September 30, 2007 and December 31, 2006 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.

    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; the
uncertainty of estimates and projections in relation to production, costs and
expenses; and the uncertainty associated with dealing with governments and
obtaining regulatory approvals), 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.

    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 the term "cash flow from operations" which
should not be considered an alternative to or more meaningful than cash flow
from operating activities as determined in accordance with Canadian GAAP as an
indicator of RSX's performance. RSX's determination of cash flow from
operations may not be comparable to that reported by other companies.

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





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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