Sure announces 2006 year-end financial and operating results



    CALGARY, March 22/CNW/ - Sure Energy Inc. (SHR, TSX) is pleased to
present its 2006 year-end audited financial and operating results.
    Sure Energy Inc. ("Sure Energy" or the "Company") was incorporated on
June 7, 2006 and commenced commercial operations on August 14, 2006 following
completion of a Plan of Arrangement dated July 11, 2006 between Clear Energy
Inc., NAV Energy Trust and the Company. Information presented in this report
under the following headings represents operations for the respective periods:

    
    2006   The 139-day period August 14, 2006 to December 31, 2006
    Q4     The 92-day quarter ended December 31, 2006
    Q3     The 47-day period August 14, 2006 to September 30, 2006
    

    This report should be read in conjunction with previously released public
documents. Financial Statements and Notes to the financial statements,
Managements Discussion and Analysis, and the Annual Information Form can be
accessed on SEDAR or our website at www.sureenergyinc.com.
    In this report the calculation of barrels of oil equivalent (BOE) is
calculated at a conversion rate of 6,000 cubic feet (Mcf) of natural gas for
one barrel (bbl) of oil based on an energy equivalency conversion method. BOEs
may be misleading particularly if used in isolation. A BOE conversion ratio of
6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
wellhead.

    
    During 2006, Sure Energy accomplished the following:

    -   Averaged 262 BOE/d in the fourth quarter of 2006.
    -   Balance sheet is in good shape with over $8 million in cash and no
        debt.
    -   Increased net asset value per share (NAV) to $0.84/ per share basic
        despite significant decline in natural gas prices.
    -   Significantly enhanced our prospect inventory in the period.
    -   Hired Lance Wirth as Chief Financial Officer of the Company.


    HIGHLIGHTS                                           Q4            2006
    -------------------------------------------------------------------------
    ($000 except share and per share amounts)
    Financial
    Petroleum and Natural Gas Revenues                   976           1,404
    Funds Flow from Operations(1)                        247             347
      Per Share, Basic and Diluted                      0.01            0.02
    Loss                                                (485)           (855)
      Per Share, Basic and Diluted                     (0.02)          (0.05)
    Capital Expenditures                               1,290          16,793
    Total Assets                                      24,890          24,890
    Working Capital                                    8,001           8,001
    Shareholders' Equity                              23,272          23,272
    Common Shares Outstanding
      Basic                                       28,509,148      28,509,148
      Diluted                                     30,574,148      30,574,148
      Fully Diluted with Performance Rights       35,572,148      35,572,148
    Weighted Average Common Shares Outstanding
      Basic and Diluted                           28,509,148      15,803,900

    Share Trading
      High                                      $       1.35    $       1.40
      Low                                       $       0.81    $       0.81
      Close                                     $       0.94    $       0.94
    Trading Volume                                 6,322,764      16,964,016
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    HIGHLIGHTS                                            Q4            2006
    -------------------------------------------------------------------------

    Operations
    Production
      Oil (bbl/d)                                          4               3
      Natural Gas (Mcf/d)                              1,548           1,596
      BOE/d                                              262             269

    Average Selling Price
      Oil ($/bbl/d)                                    62.99           62.99
      Natural Gas ($/Mcf)                               6.70            6.22
      BOE ($/BOE)                                      40.53           37.59

    Operating Netback ($/BOE)                          17.30           16.95
    Funds Flow Netback ($/BOE)(1)                      10.22            9.27
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Funds Flow Netback and Funds Flow from Operations are not standard
        measures under generally accepted accounting principles and may not
        be comparable to similar measures presented by other companies.
        Management believes that Funds Flow Netback and Funds Flow from
        Operations are useful supplementary measures that may assist
        investors in assessing the cash from operations for investing and
        financing activities.


    RESERVES
    Sure Energy engaged independent petroleum consultants Sproule Associates
Limited ("Sproule") to evaluate reserves for all of Sure Energy's properties
effective December 31, 2006.


    Summary Of Oil And Gas Reserves
    Forecast Prices and Costs

                                                               2006 Total
                       Crude Oil              Gas              Reserves(1)
                         (Mbbl)              (MMcf)               MBOE
                  ------------------- ------------------- -------------------
                    Gross      Net      Gross      Net      Gross      Net
    -------------------------------------------------------------------------
    Proved
      Developed
       producing      18.8      18.8     2,815     2,213     488.0     387.6
      Developed
       non-producing     -         -       287       251      47.9      41.9
      Undeveloped        -         -        59        52       9.9       8.7
    -------------------------------------------------------------------------
    Total Proved      18.8      18.8     3,162     2,517     545.7     438.2
    Probable           9.8       9.8     1,076       917     189.1     162.6
    -------------------------------------------------------------------------
    Proved plus
     probable(1)      28.5      28.5     4,237     3,434     734.8     600.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Columns may not add due to rounding


    Summary of Net Present Values of Future Net Revenue
    Forecast Prices and Costs ($000s)
    Before Income Taxes, Discounted at (% per year)
     as at December 31, 2006(1)

                      0%        5%        8%       10%       15%       20%
    -------------------------------------------------------------------------
    Proved
      Developed
       producing    10,851     8,946     8,143     7,699     6,816     6,154
      Developed
       non-producing   819       741       699       673       613       560
      Undeveloped        -        (8)      (13)      (16)      (22)      (28)
    -------------------------------------------------------------------------
    Total Proved    11,670     9,679     8,828     8,356     7,406     6,686
    Probable         4,451     2,980     2,489     2,244     1,800     1,500
    -------------------------------------------------------------------------
    Proved plus
     probable       16,121    12,659    11,318    10,599     9,206     8,186
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Columns may not add due to rounding


    Reserve Life Index
    The reserve life index is calculated by dividing gross company reserves as
at the effective date of the reports (December 31, 2006) by Sproule's estimate
of average production for the following year. The reserve life index
represents a measure of the amount of time production could be sustained at
the assumed production rates based on the reserves at the applicable point in
time.

                                                            2006
    -------------------------------------------------------------------------
                                                                 Proved plus
                                                    Proved         Probable
    -------------------------------------------------------------------------
    2007 Forecast Production (BOE/d)                     299             319
    Reserve life Index (years)                           5.0             6.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    UNDEVELOPED LAND
    For the year ended December 31, 2006 Sure Energy's total net landholdings
are 39,000 acres. The majority of Sure Energy's undeveloped land in Alberta is
located in the Peace River Arch. The Company's land acquisition strategy
focuses primarily on acquiring lands to expand existing project areas and
prospect inventory.

    2006               Developed          Undeveloped            Total
                    Gross      Net      Gross      Net      Gross      Net
    -------------------------------------------------------------------------
    Alberta         42,880    15,795    83,341    38,523   126,221    54,318
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NET ASSET VALUE
    The following table represents the net asset value ("NAV") of Sure Energy
as at December 31, 2006 based on proved and probable reserves using forecast
pricing (PV 8% discounted) as evaluated by Sproule, undeveloped land value as
determined by internal estimates, seismic value as determined by internal
estimates, and internal estimates of value for tax pools.

                                                                 Proved plus
                                                                   Probable
    -------------------------------------------------------------------------
    Present value of  reserves (PV 8%) (before tax)                   11,318
    Undeveloped lands                                                  4,225
    Seismic                                                              515
    Working capital                                                    8,001
    -------------------------------------------------------------------------
                                                                      24,059
    -------------------------------------------------------------------------
    NAV per share                                               $       0.84

    Number of issued and diluted shares outstanding
     as of December 31, 2006(1)                                   28,509,148
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) 2,065,000 options have been excluded from diluted shares outstanding
        as they are anti-dilutive.


    OPERATIONAL REVIEW

    Production

                                Q4                           2006
                   ----------------------------  ----------------------------
                       Oil       Gas     Total       Oil       Gas     Total
                     Bbl/d     Mcf/d     BOE/d     Bbl/d     Mcf/d     BOE/d
    -------------------------------------------  ----------------------------
    Tweedie              -     1,360       227         -     1,404       234
    Redwater             4       188        35         3       192        35
    -------------------------------------------  ----------------------------
    Total                4     1,548       262         3     1,596       269
    -------------------------------------------  ----------------------------
    -------------------------------------------  ----------------------------


    Capital Program Summary                               Q4            2006
    -------------------------------------------------------------------------
    ($000s)
    Land                                                  76              82
    Geological and geophysical                           236             307
    Drilling                                             341             341
    Completions                                           85              85
    Production, equipment and facilities                 368             368
    Capitalized exploration G&A                          172             211
    -------------------------------------------------------------------------
                                                       1,278           1,394

    Asset acquisitions                                     -              25
    Initial land, property and seismic
     acquisition for share consideration                   -          15,341
    Asset retirement obligation on new drills             12              12
    Other                                                  -              21
    -------------------------------------------------------------------------
                                                       1,290          16,793
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Tweedie
    Sure Energy owns 17,658 net undeveloped acres of land at its Tweedie
property, located 180 kilometres northeast of Edmonton. This is the
Corporation's main producing area, producing approximately 1.4 MMcf/d
(230 Boe/d) from over 40 wells. In early 2007 the Corporation participated in
three wells (average working interest 20.4%) all of which were cased and are
currently awaiting completion. To date two of four wells left stranded from
Clear's 2006 winter drilling campaign have been tied-in and have contributed
20 Boe/d net to Sure Energy. The other two wells should be on stream before
break-up and are expected to add an additional 50 Boe/d net.

    Redwater
    Sure Energy holds 7,733 net acres of land at its Redwater property,
located 35 kilometres north of Edmonton. Sure Energy's average working
interest in the area is 95%. The Corporation is targeting oil and gas from the
Cretaceous Viking and Mannville formations at drilling depths of 700 - 1,000
metres and currently has a prospect inventory of 5 locations. The Corporation
has one gas well producing in the area at 200 Mcf/d (32 Boe/d) and recently
reactivated an oil well which is currently producing 6 Bbl/d. The Corporation
is currently tying-in a second gas well that tested at 200 Mcf/d (32 Boe/d)
when it was drilled in late 2006.

    Girouxville
    Sure Energy owns and operates 5,700 net acres of land with an average
working interest of 36% in the Girouxville area 65 kilometres east of Grand
Prairie in northern Alberta. This land block is speculative exploration
acreage along the highly prolific Beaverhill Lake and Slave Point fairway that
flanks the south side of the Peace River Arch, between recent significant
discoveries at Normandville and Puskwa. These prolific light oil targets
require detailed 3D seismic to define the trap and are relatively deep
(2,500 - 3,000 metres) to drill. Sure Energy is currently actively seeking
farm-in candidates to help mitigate the cost exposure.

    Boundary Lake
    Sure Energy owns 4,072 net acres of land with an average 79.5% working
interest at Boundary Lake 120 kilometres northwest of Grande Prairie. This is
an area of multi-zone potential highlighted by subcrop plays in the Triassic,
such as the Baldonnel, and stratigraphically trapped sands of the Halfway
formation. The Corporation drilled two wells in the Boundary Lake area in the
first quarter of 2007, casing one and abandoning one for a success rate of
50%. The successful well has been completed and tested and the Corporation is
awaiting the results of the production test.

    Gordondale
    Sure Energy owns 3,360 net acres of land with a 75% average working
interest at its Gordondale property, located 70 kilometres northwest of Grande
Prairie on the Peace River Arch. This is an area of multi-zone potential from
Cretaceous gas at approximately 1,500 metres to high risk, high reward
Devonian gas targets at 2,700 metres. Sure Energy currently has one prospect
defined on 3D seismic data targeting a high reward oil play at 2,000 metres
and is currently evaluating the area for deeper structural closures. The
Corporation is seeking a partner for this well to mitigate its cost exposure.

    Farm-in Opportunity
    Sure has a first right of refusal to farm-in on any of the prospects on
Sound Energy Trust's 445,000 net acres that Sound Energy Trust deems to be too
high risk for its own business model. Many of these prospects were developed
by Sure Energy employees who were previously employees of Clear Energy before
it was merged into Sound Energy Trust. In the first quarter of 2007 Sure
Energy plans to drill a high risk, high reward prospect on Sound Energy Trust
land at Clear River. Also in the first quarter of 2007 the Company is shooting
a 2D seismic program on Sound Energy Trust land in the Chinook area to
follow-up on a significant discovery made by Clear Energy in 2006.

    CHIEF FINANCIAL OFFICER UPDATE

    On December 1, 2006, Sure Energy appointed Lance Wirth as Vice President,
Finance and Chief Financial Officer. Prior to joining Sure Energy, Mr. Wirth
served for four years in a financial manager role with a large oil and gas
royalty trust listed on the TSX. Mr. Wirth has a Bachelor of Commerce degree
and is a Chartered Accountant having served as a Manager with two different
large accounting firms with a wide range of clients in the oil and gas
industry.

    OUTLOOK

    Sure Energy continues to remain in a very enviable position:

    
    -   $8 million of cash and no debt

    -   $3.5 million undrawn credit facility

    -   Diversified low decline production base

    -   Significant inventory of drilling locations on 38,500 net acres of
        undeveloped land

    -   First right to farm-in on 445,000 net acres of undeveloped land held
        by Sound Energy Trust

    -   An experienced and proven management team
    

    Market conditions for oil and gas sector companies continue to remain
very difficult with industry record high finding and development costs,
overleveraged balance sheets, and soft equity markets due to poor operating
and financial performance by the sector in general. In addition numerous
assets and corporations are now up for sale providing a strong buyers market
for both acquisitions and drilling projects for companies that are in a
position to take advantage of these opportunities.
    Sure Energy has approved a base capital budget of $8 million, including
the drilling of nine gross wells in 2007.
    We are very optimistic about the opportunities that are in front of your
Company and look forward to reporting back to you throughout the year.
    Sure Energy's Annual General Meeting of Shareholders will be held in the
Royal Room of the Metropolitan Conference Centre, 333 4th Avenue S.W.,
Calgary, Alberta on Tuesday, May 29th, 2007 at 3:00 pm. All shareholders are
invited to attend.

    
    SURE ENERGY INC.
    BALANCE SHEET

    As at December 31                                                   2006
    ($000's)
    -------------------------------------------------------------------------

     Assets
    Current assets
      Cash and cash equivalents                                 $      8,237
      Accounts receivable                                                658
      Prepaid expenses                                                    81
    -------------------------------------------------------------------------
                                                                       8,976

    Property, plant and equipment                                     15,914
    -------------------------------------------------------------------------
                                                                $     24,890
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
    Current liabilities
      Accounts payable and accrued liabilities                  $        975
    -------------------------------------------------------------------------

    Asset retirement obligations                                         643
    -------------------------------------------------------------------------

    Shareholders' equity
      Share capital                                                   23,779
      Contributed surplus                                                348
      Deficit                                                           (855)
    -------------------------------------------------------------------------
                                                                      23,272
    -------------------------------------------------------------------------
                                                                $     24,890
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    SURE ENERGY INC.
    STATEMENT OF OPERATIONS AND DEFICIT

                                                Three Months       Period
                                                    Ended           Ended
                                                 December 31,    December 31,
    ($000's, except per share amounts)               2006          2006(1)
    -------------------------------------------------------------------------

    Revenue
      Petroleum and natural gas revenue         $        976    $      1,404
      Royalties                                         (240)           (325)
      Interest income                                     79              92
    -------------------------------------------------------------------------
                                                         815           1,171
    -------------------------------------------------------------------------
    Expenses
      Operating                                          289             400
      Transportation                                      30              46
      General and administration                         249             378
      Stock compensation                                 204             303
      Depletion, depreciation and accretion              528             899
    -------------------------------------------------------------------------
                                                       1,300           2,026
    -------------------------------------------------------------------------

    Loss                                                (485)           (855)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Deficit, beginning of period                        (370)              -
    -------------------------------------------------------------------------
    Deficit, end of period                              (855)           (855)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Loss per common share
      Basic and diluted                         $      (0.02)   $      (0.05)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) These results comprise the period from commencement of operations,
        August 14, 2006 to December 31, 2006


    SURE ENERGY INC.
    STATEMENT OF CASH FLOWS

                                                Three Months       Period
                                                    Ended           Ended
                                                 December 31,    December 31,
    ($000's)                                         2006          2006(1)
    -------------------------------------------------------------------------

    Cash provided by (used in):
    Operating
    Loss                                        $       (485)   $       (855)
    Items not affecting cash:
      Depletion, depreciation and accretion              528             899
      Stock compensation                                 204             303
    -------------------------------------------------------------------------
      Funds flow from operations                         247             347
      Changes in non-cash working capital                (18)           (200)
    -------------------------------------------------------------------------
                                                         229             147
    -------------------------------------------------------------------------
    Investing
    Drilling and development of petroleum
     and natural gas properties                       (1,278)         (1,394)
    Acquisition of petroleum and natural
     gas properties                                        -             (25)
    Other asset purchases                                  -             (21)
    Changes in non-cash working capital                  429             436
    -------------------------------------------------------------------------
                                                        (849)         (1,004)
    -------------------------------------------------------------------------
    Financing
    Issue of common shares for cash,
    net of share issue costs                               -           9,094
    Changes in non-cash working capital                  (12)              -
    -------------------------------------------------------------------------
                                                         (12)          9,094
    -------------------------------------------------------------------------

    Net change in cash and cash equivalents             (632)          8,237

    Cash and cash equivalents, beginning of
     period                                            8,869               -
    -------------------------------------------------------------------------

    Cash and cash equivalents, end of period    $      8,237    $      8,237
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) These results comprise the period from commencement of operations,
        August 14, 2006 to December 31, 2006
    

    %SEDAR: 00024118E




For further information:

For further information: please visit our website at
www.sureenergyinc.com or contact: Mr. Jeff Boyce, President and CEO or Mr.
Lance Wirth, Vice President Finance and CFO, Phone: (403) 410-3100, Email:
info@sureenergyinc.com

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