WIN Energy Corporation Files Year End 2006 Documents



    TSX Venture Exchange: WNR

    CALGARY, April 27 /CNW/ - WIN Energy Corporation ("WIN") announces that
it has filed its Management's Discussion and Analysis and audited consolidated
financial statements and accompanying notes for the period ended December 31,
2006. WIN has also filed information and reports concerning its oil and gas
reserves, activities and properties required to be provided under National
Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. Copies
of these documents may be obtained electronically from the SEDAR system at
www.sedar.com.

    ADDITIONAL INFORMATION

    Additional information relating to WIN is filed on SEDAR and can be
viewed at www.sedar.com. Information can also be obtained by contacting WIN
Energy Corporation, Suite 1100, 505 Fifth Avenue S.W., Calgary, Alberta,
Canada T2P 3E6 or by e-mail at info@winenergycorp.com. Information is also
accessible on WIN's website at www.winenergycorp.com.

    HIGHLIGHTS

    Production Volumes

    2006 represented WIN's first year with production on stream. Production
commenced on August 18, 2006 and the following table summarizes the average
daily production from that date until December 31, 2006, which equates to
average daily production of 566 BOE(1) per day:

    
           Natural gas (Mcf per day)                                 3,084
           Natural gas liquids (Bbl per day)                            52
    

    Production for the month of December averaged 1,939 Mcf per day of
natural gas and 24 Bbl per day of NGLs, which equates to 347 BOE(1) per day.
WIN's production mix for the year ended December 31, 2006 was 90.8% natural
gas and 9.2% natural gas liquids ("NGLs") and for the month of December was
93.1% natural gas and 6.9% NGLs.

    
    Financial

                                   Year ended     Nine months ended
                                  December 31           December 31
                                         2006                  2005   Change
                                            $                     $        %
    -------------------------------------------------------------------------
    Production revenue(2)           3,100,080                     -        -
    Funds flow from (used in)
     operations(3)                     33,725              (711,702)     105
    Funds flow per share(3)
       Basic                            0.001                (0.023)     104
       Diluted                          0.001                (0.023)     104
    Additions to property,
     plant and equipment           39,871,199            24,456,438       63

    Equity

                                        As at                 As at
                                  December 31           December 31   Change
                                         2006                  2005        %
    -------------------------------------------------------------------------
    Common shares outstanding      65,271,419            32,931,741       98
    Warrants outstanding            5,419,767            13,812,349      (61)
    Stock options outstanding       5,323,600             3,292,400       62

    (1) Certain natural gas volumes have been converted to barrels of oil
        equivalent ("BOE") using six thousand cubic feet (Mcf) equal to one
        barrel (Bbl). This 6:1 ratio is based on an energy equivalent
        conversion applicable at the burner tip and does not represent a
        value equivalency at the wellhead.

    (2) The $3,100,080 of production revenue does not represent a full year
        of revenue because production commenced on August 18, 2006.

    (3) Funds flow from (used in) operations and funds flow per share are
        non-GAAP measures. WIN uses the term "funds flow from (used in)
        operations", which represents cash used in operating activities
        before changes in non-cash operating working capital. Funds flow from
        (used in) operations does not have a standardized meaning prescribed
        by Canadian GAAP and therefore may not be comparable with the
        calculations of similar measure for other companies, but WIN
        calculates this measure consistently throughout periods. Funds flow
        per share is calculated by dividing the funds flow from (used in)
        operations by the basic and/or diluted shares outstanding during the
        period.
    

    MESSAGE TO SHAREHOLDERS

    The first half of 2006 saw WIN focus on its initial public offering
("IPO") and related listing on the TSX Venture Exchange. Trading of its shares
commenced on July 19, 2006 under the trading symbol "WNR". During the third
quarter, WIN concentrated its efforts on the startup of its natural gas
processing facility and on drilling additional exploratory wells on its core
properties. For the remainder of the year, management continued to focus on
completion of its 2006 capital spending program in Cowley and Todd Creek, both
located in the southern Alberta Foothills.

    
    SIGNIFICANT HIGHLIGHTS

    -   WIN completed the construction of its 100% owned and operated sweet
        gas plant and its 35 kilometre gathering system in its core area in
        southwest Alberta, which went on stream on August 18, 2006. This
        facility has been initially licensed to produce 10,000 Mcf per day of
        natural gas and was designed with processing capacity of 20,000 Mcf
        per day and compression capability of 10,000 Mcf per day. The
        facility is expandable to accommodate the maximum line capacity of
        the WIN gathering system. With the facility startup, WIN is now
        producing natural gas and natural gas liquids. Production for the
        month of December averaged 1,939 Mcf per day of natural gas and
        24 Bbl per day of natural gas liquids, which equates to 347 BOE per
        day. WIN also charges its joint venture partners for processing and
        transporting their natural gas and this revenue stream added $226,091
        during the year ended December 31, 2006. WIN is currently in
        negotiations with several parties relating to processing additional
        third party gas. It is anticipated that this gas will begin
        production during the third quarter of 2007.

    -   WIN formed a joint venture with a multinational oil and gas
        corporation whereby the parties pooled a total of 18.24 sections of
        petroleum and natural gas rights in the Cowley area of southwest
        Alberta. The parties also agreed on an area of mutual interest that
        includes 80 square miles and to share equally all future costs and
        benefits in connection with the pooled lands and the area of mutual
        interest. The first well under this joint venture was the deepening
        (to a depth of 4,250 metres) of a well previously drilled by WIN.
        Operations commenced in August 2006 with WIN as operator. After very
        extensive testing operations, this well was found to be non-
        commercial. Additional geological and geophysical work will be
        conducted during 2007 to determine the potential of this prospect.

    -   WIN completed a 36 square mile 3-D seismic program in the Cowley
        area, resulting in numerous future exploration and development
        drilling locations. The first well of this 3-D seismic program was
        drilled during the first quarter of 2007 and is expected to be tied
        in and on production during the second quarter of 2007. Pursuant to
        National Instrument 51-101 Standards of Disclosure for Oil and Gas
        Activities ("NI 51-101"), reserves from this well have not been
        included in WIN's year end reserve report dated December 31, 2006
        because the well was drilled subsequent to the date of the report.

    -   During the fourth quarter of 2006, WIN executed an option agreement
        and paid a deposit of $250,000 (U.S.) for the option to acquire a
        10-year petroleum and natural gas lease covering 93,603 gross acres
        (79,009 net acres) of land in Montana from Broken O Ranch, LLC for
        approximately $25 (U.S.) per net acre (gross cost of $1,975,000
        (U.S.) including the deposit). On March 22, 2007 WIN exercised its
        option for $1,725,000 U.S. and acquired the petroleum and natural gas
        lease.

    -   WIN continues to be a driving force in re-establishing the Oil and
        Gas Committee under the southwest Alberta Sustainable Community
        Initiative ("SASCI"), an Alberta synergy group. The committee, which
        WIN co-chairs with Shell Canada Limited, brings oil and gas companies
        operating in southwestern Alberta together to share information and
        discuss stakeholder relations, environmental and safety issues. WIN
        is committed to an open and environmentally responsible approach to
        operations on our properties.

    -   WIN has successfully developed a large contiguous land base in
        southern Alberta that has higher risk drilling prospects and access
        to WIN's natural gas processing facilities, complemented by WIN's
        second core area in Montana where WIN has also developed a large
        contiguous land base that provides it with the diversity of lower
        risk shallow natural gas and oil drilling prospects that are in close
        proximity to available transportation and processing infrastructure.

    -   WIN had working capital of $10,734,867 and remained debt free as at
        December 31, 2006. As of April 24, 2007, WIN had cash on hand of
        $3,275,819 and was debt free.

    IMPAIRMENT LOSS

    WIN engaged McDaniel and Associates Consultants Ltd. ("McDaniel") as its
Independent Qualified Reserves Evaluator to evaluate WIN's properties. As a
result of McDaniel's evaluation and the ceiling test for accounting purposes,
an impairment loss of $24,380,944 has been recognized at December 31, 2006, as
the carrying value of WIN's assets exceeds the discounted cash flows expected
to be received from the production of proved and probable reserves.
Specifically the impairment has resulted from:

    -   the production declines on WIN's reserves, which have proven to be
        greater than anticipated;

    -   the drilling of three (2.5 net) exploratory dry holes during 2006;

    -   the drilling of two (2.0 net) wells during 2006 that have been tied
        in and are producing, which have been evaluated by McDaniel as
        uneconomical since the cost to drill, complete and tie in these wells
        exceeds the value expected from the production of the proved and
        probable reserves; and

    -   as a result of the 3-D seismic program, several wells to which
        probable reserves were previously assigned, have had the reserves
        removed, pursuant to NI 51-101. If successful wells are drilled at a
        later date on the anomalies identified by the 3-D seismic, probable
        reserves may be attributed to these locations in accordance with NI
        51-101.
    

    LAND HOLDINGS

    In 2006 WIN's net unproven land position remained relatively flat,
increasing by 7,156 acres compared to 2005. WIN's average working interest in
its unproven lands decreased slightly to 79 percent in 2006 (2005 -
83 percent). At year end 2006, WIN's unproven land position stood at 56,641
net acres compared to 49,485 net acres at the end of 2005.

    
    At December 31, 2006
    (acres)               Unproven          Developed              Total
                      Gross       Net    Gross       Net      Gross      Net
    -------------------------------------------------------------------------
    Cowley           32,185    24,903    3,850      3,471    36,035   28,374
    Hillspring        1,787     1,686        -          -     1,787    1,686
    Pincher Creek     2,242     2,034        -          -     2,242    2,034
    Quaich            1,760     1,152      160        128     1,920    1,280
    Strachan          4,800       439        -          -     4,800      439
    Todd Creek       28,270    26,312      640        560    28,910   26,872
    Turner Valley       860       176        -          -       860      176
    -------------------------------------------------------------------------
                     71,904    56,702    4,650      4,156    76,554   60,861
    -------------------------------------------------------------------------
    

    The unproven acreage includes lands in which WIN has the right to earn
interests pursuant to farm-out agreements.

    RESERVES

    The December 31, 2006 reserve report was prepared by McDaniel and
utilized definitions as set out under National Instrument 51-101 Standards of
Disclosure for Oil and Gas Activities ("NI 51-101").
    WIN's reserve estimates have been calculated in compliance with the
NI 51-101 standards. This standard requires a mandate of high confidence for
proved and probable reserves. Under NI 51-101, proved reserves are defined as
having a 90 percent probability that actual reserves recovered over time will
equal or exceed proved reserve estimates. For proved and probable reserves
under NI 51-101, there are now equal (50 percent) probabilities that the
actual reserves recovered will be less than or greater than the proved and
probable reserves estimate.
    In 2006, WIN experienced a significant reserve write down totaling
460.8 MBOE proved and 1,785.4 MBOE proved and probable. The reserve write down
is the result of significantly greater than anticipated production declines on
WIN's reserves and disappointing drilling results on WIN's assigned probable
locations from the December 31, 2005 reserve report.
    At December 31, 2006, WIN's gross proved reserves as determined by
McDaniel were 96.7 MBOE and proved and probable reserves were 530.0 MBOE.
Utilizing the production profiles in the McDaniel reserve report, WIN's
reserve life index is calculated to be five years proved and probable and
three years proved, based on a 2007 forecast average production rate of
226 BOE per day and 183 BOE per day, respectively.
    The reserves information in the following tables is extracted from
McDaniel's evaluations based on forecast prices and costs:

    
    Summary of                                              NPV          NPV
    Reserves                     Natural     Total      @10%      @15%
    At December 31,       NGLs       Gas     (MBOE   before tax   before tax
    2006                (MBbls)    (MMcf)  @6:1)      ($000s)      ($000s)
    -------------------------------------------------------------------------
    Proved producing       3.1      561.7     96.7      1,710.0      1,669.5
    Proved non-producing     -          -        -        706.2        705.1
    Proved undeveloped       -          -        -         (8.0)        (6.3)
    -------------------------------------------------------------------------
    Total proved           3.1      561.7     96.7      2,408.2      2,368.3
    Total probable        13.9    2,516.2    433.3      7,120.6      6,428.4
    -------------------------------------------------------------------------
    Proved & probable     17.0    3,077.9    530.0      9,528.8      8,796.7
    -------------------------------------------------------------------------



    Reserve
    Reconciliation                              NGLs (MBbls)
    -------------------------------------------------------------------------
                              Proved              Probable             Total
    -------------------------------------------------------------------------
    Reserves at
    December 31, 2005          135.2                 300.6             435.8
    Discoveries                    -                   1.4               1.4
    Acquisitions                   -                     -                 -
    Dispositions                   -                     -                 -
    Revisions                 (125.0)               (288.1)           (413.1)
    Productions                 (7.1)                    -              (7.1)
    -------------------------------------------------------------------------
    Reserves at
    December 31, 2006            3.1                  13.9              17.0
    -------------------------------------------------------------------------


    Reserve
    Reconciliation                           Natural gas (MMcf)
    -------------------------------------------------------------------------
                              Proved              Probable             Total
    -------------------------------------------------------------------------
    Reserves at
    December 31, 2005        2,985.1               8,459.1          11,444.2
    Discoveries                 11.0                 276.0             287.0
    Acquisitions                   -                     -                 -
    Dispositions                   -                     -                 -
    Revisions               (2,015.0)             (6,218.9)         (8,233.9)
    Productions               (419.4)                    -            (419.4)
    -------------------------------------------------------------------------
    Reserves at
    December 31, 2006          561.7               2,516.2           3,077.9
    -------------------------------------------------------------------------


    Reserve
    Reconciliation                               BOE (MBOE)
    -------------------------------------------------------------------------
                              Proved              Probable             Total
    -------------------------------------------------------------------------
    Reserves at
    December 31, 2005          632.7               1,710.5           2,343.2
    Discoveries                  1.8                  47.4              49.2
    Acquisitions                   -                     -                 -
    Dispositions                   -                     -                 -
    Revisions                 (460.8)             (1,324.6)         (1,785.4)
    Productions                (77.0)                    -             (77.0)
    -------------------------------------------------------------------------
    Reserves at
    December 31, 2006           96.7                 433.3             530.0
    -------------------------------------------------------------------------



    Value of Reserves                                 Discounted
    -------------------------------------------------------------------------
    As at December 31,
    2006 (Thousands
    before tax)              Undiscounted         5%        10%          15%
    -------------------------------------------------------------------------
    Proved                      2,462.7     2,441.3     2,408.2      2,368.3
    Probable                    8,881.9     7,930.0     7,120.6      6,428.4
    -------------------------------------------------------------------------
    Total proved & probable    11,344.6    10,371.3     9,528.8      8,796.7
    -------------------------------------------------------------------------



                                     Edmonton Light
                                          Crude Oil    AECO Gas    Inflation
    Pricing Assumption                       $C/Bbl       $C/GJ            %
    -------------------------------------------------------------------------
    2007                                      70.80        6.85          2.0
    -------------------------------------------------------------------------
    2008                                      69.30        7.05          2.0
    -------------------------------------------------------------------------
    2009                                      67.70        7.40          2.0
    -------------------------------------------------------------------------
    2010                                      66.10        7.50          2.0
    -------------------------------------------------------------------------
    2011                                      64.20        7.70          2.0
    -------------------------------------------------------------------------
    

    ASSET VALUATION

    The estimated present value of WIN's proved and probable reserves at
December 31, 2006 presented below are based on an evaluation conducted by
McDaniel. The value of reserves represents the forecast of future net cash
flow derived from the production and sale of reserves, less capital
expenditures, abandonment costs and operating costs, before the deduction of
interest, income tax, and other corporate costs. WIN's gas processing facility
and seismic data are assigned their net book value and undeveloped land is
valued at approximately $321.92 per net acre, pursuant to an independent land
report dated December 31, 2006 prepared by McDaniel.

    
    Net Asset Value                                  Discounted
    -------------------------------------------------------------------------
    ($ thousands)        Undiscounted           5%          10%          15%
    -------------------------------------------------------------------------
    Proved plus probable
     reserves              11,344,600   10,371,300    9,528,800    8,796,700
    Undeveloped acreage    19,592,156   19,592,156   19,592,156   19,592,156
    Working capital
     surplus               10,734,867   10,734,867   10,734,867   10,734,867
    -------------------------------------------------------------------------
    Net book value of
     gas processing
     facility               8,734,474    8,734,474    8,734,474    8,734,474
    Net book value of
     seismic data           3,203,600    3,203,600    3,203,600    3,203,600
    -------------------------------------------------------------------------
    Basic asset value      53,609,697   52,636,397   51,793,897   51,061,797
    Exercise of
     in-the-money
     warrants                       -            -            -            -
    Exercise of
     in-the-money
     stock options          1,064,000    1,064,000    1,064,000    1,064,000
    -------------------------------------------------------------------------
    Diluted asset value    54,673,697   53,700,397   52,857,897   52,125,797
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Common shares
     outstanding           65,271,419   65,271,419   65,271,419   65,271,419
    In-the-money
     warrants                       -            -            -            -
    In-the-money options
     outstanding            1,330,000    1,330,000    1,330,000    1,330,000
    -------------------------------------------------------------------------
    Diluted                66,601,419   66,601,419   66,601,419   66,601,419
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net asset value per
     common share ($)
      Basic                      0.82         0.81         0.79         0.78
      Diluted                    0.82         0.81         0.79         0.78
    -------------------------------------------------------------------------
    

    The net asset value is calculated as of December 31, 2006. WIN cautions
that this value will change over time as its asset values and working capital
balance change based on expenditures, commodity prices and production and
drilling results.

    OUTLOOK

    Despite the disappointing drilling results and greater than anticipated
production declines realized during 2006, management still believes there is
significant inherent value in WIN's assets. This value arises from the results
of the interpretation of the 3-D seismic program showing multiple drilling
locations including the drilling of the 7-5-7-1W5M well in March 2007, the
large contiguous land position held by WIN, the acquisition of the Broken O
Ranch lease in Montana, the 100% owned and operated natural gas processing
facility and gas gathering system, the recent interest expressed by several
third party gas producers in processing their natural gas through WIN's
processing facility and the fact that WIN is debt free.

    FORMATION OF SPECIAL COMMITTEE

    The Board of Directors of WIN has formed a Special Committee to review
all possible strategic alternatives for WIN to enhance shareholder value. One
of the mandates for this Committee is to review the allocation of all
available working capital resources. The members of the Special Committee are
Keith Hern, Robert Iverach and David McGoey, all independent members of the
Board. The Special Committee will begin its work immediately. To date, no
financial advisor has been retained by WIN.

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

    This press release contains forward-looking statements, including but not
limited to operational information including drilling projections, production
and processing 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), drilling equipment availability and the risk of commodity price
and foreign exchange rate fluctuations. Due to the risks, uncertainties and
assumptions inherent in forward-looking statements, prospective investors in
WIN's securities should not place undue reliance on these forward-looking
statements.




For further information:

For further information: William J. Kiff, President and Chief Executive
Officer or Shane Kozak, Vice President Finance & Chief Financial Officer, WIN
Energy Corporation, Telephone: (403) 265-7787, Fax: (403) 265-7767

Organization Profile

WIN ENERGY CORPORATION

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