Winstar Earns $2.1 million on Record Q3 2007 and Earns $5.3 million on Record Nine Month 2007 Results



    CALGARY, Nov. 14 /CNW/ - Winstar Resources Ltd. ("Winstar" or "the
Company") (TSX: WIX) is pleased to report record results for the periods
ending September 30, 2007, provide an overview of its plans for the remainder
of the year, and offer preliminary guidance for 2008.
    Winstar's rapid growth, which began in Q3 2005 following the merger with
Athanor, continues with record three and nine month 2007 production, funds
from operations (cash flow) and earnings. In the third quarter of 2007,
Winstar realized funds from operations of $6.78 million, an increase of
$3.69 million from $3.09 million in the third quarter of 2006. For the
nine-month period, the Company recorded a 52% increase in funds from
operations to $18.47 million compared with $12.14 million for the same period
of 2006. Winstar attributes its increased funds from operations to increased
sales volumes and higher commodity prices. Commodity prices, on average,
increased about 20% during 2007 compared with the three and nine month periods
of 2006. Sales volumes increased 32% to 2,015 barrels of oil equivalent per
day (boepd) for the nine months and 46% to 1,928 boepd for the three months
compared with the equivalent periods of 2006.
    Winstar earned $5.3 million in the first nine months of 2007, an increase
of 186% over the $1.9 million earned during the same period of 2006. In the
third quarter, the Company earned $2.1 million compared with a loss of
$403,000 during the third quarter of 2006.

    
    Q3 2007 and Nine Month 2007 Operating and Financial Summary
    -----------------------------------------------------------

    -------------------------------------------------------------------------
    Highlights                    Third Quarter             Year over Year
                            -------------------------------------------------
                                  Three Months Ended
                                        September 30,      First Nine Months
                            -------------------------------------------------
                                                 %                       %
                                2007    2006  Change    2007    2006  Change
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    Sales and Prices
    -------------------------------------------------------------------------
    Oil and NGL sales (boepd)  1,356     681      99   1,337     631     112
    -------------------------------------------------------------------------
    Natural gas sales (Mcf/d)  3,435   3,824     (10)  4,069   5,400     (25)
    -------------------------------------------------------------------------
    Average daily sales 6:1
     (boepd)                   1,928   1,319      46   2,015   1,531      32
    -------------------------------------------------------------------------
    Average natural gas price
     (CDN$/Mcf)                 7.13    6.67       7    8.21    6.99      17
    -------------------------------------------------------------------------
    Average oil and NGL price
     (CDN $/bbl)               75.68   69.45       9   71.56   69.23       3
                            -------------------------------------------------
    Financial
     (CDN $ thousands)
    -------------------------------------------------------------------------
    Oil and gas revenue       11,696   6,700      75  35,236  22,228      59
    -------------------------------------------------------------------------
    Funds from operations      6,779   3,095     119  18,474  12,141      52
    -------------------------------------------------------------------------
      Per share, basic          0.22    0.11     103    0.64    0.43      49
    -------------------------------------------------------------------------
      Per share, diluted        0.22    0.11     103    0.62    0.43      44
    -------------------------------------------------------------------------
    Net (loss)/income          2,092    (403)      -   5,324   1,858     186
    -------------------------------------------------------------------------
      Per share, basic and
       diluted                  0.07   (0.01)      -    0.18    0.07     157
    -------------------------------------------------------------------------
    Working capital at
     period end               24,723  15,372      61  24,723  15,372      61
    -------------------------------------------------------------------------
    Long term debt at period
     end                           -       -       -       -       -       -
    -------------------------------------------------------------------------
    Shareholders' equity at
     period end               90,693  65,989      37  90,693  65,989      37
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Common Shares (thousands)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average during
     the period - Basic       29,749  28,564       4  29,081  28,564       2
                - Diluted     30,317  28,564       6  29,747  28,564       4
    -------------------------------------------------------------------------
    Outstanding at period
     end                      33,843  28,564      18  33,843  28,564      18
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    New Equity Issue
    ----------------
    On August 23, 2007, Winstar raised $23 million (gross) through the sale
of 5,000,200 common shares at $4.60 per share on a bought-deal basis through a
syndicate of Research Capital Corporation, Jennings Capital Inc. and
FirstEnergy Capital Corp. The initial portion of the transaction closed on
September 12, 2007, and subsequently, the fully exercised 15% over-allotment
option closed on September 27, 2007.
    The new issue gives Winstar increased financial flexibility. The company
now has the financial capability to commit to a number of strategic capital
expenditures in Tunisia, such as a large 3D seismic program, and the
contracting of a new, highly automated 3,000 meter drilling and service rig
(announced on July 19, 2007). The rig, imported from Red Deer, Alberta to
Tunisia in September 2007, will be used initially to develop Winstar's Chouech
Essaida and Ech Chouech concessions.

    Production (not equal to sales)
    -------------------------------
    Winstar realized record average daily oil and gas production in the first
nine months of 2007 of 1,882 boepd, a 24% increase over the comparable period
of 2006. This amount is different than the Company's sales over the period
because oil production in Tunisia is not equal to sales. Tunisian oil is
transported to a terminal for periodic off loading into oil tankers. Revenue
from tanker sales is recognized only after the oil is loaded. Average daily
production in Hungary over the nine-month period declined as anticipated to
297 boepd in 2007 from 475 boepd in 2006 due to both lower demand because of
warmer weather and lower well performance. Average daily production in Canada
during the same period declined to 419 boepd in 2007 from 498 boepd in 2006.
    The Company's drilling and recompletion success in Tunisia resulted in
nine month 2007 production that more than offsets natural declines in Hungary
and Canada. In Tunisia, third quarter production start up of the new well,
Sabria 11 (announced on July 9, 2007) and the rig contract mentioned above,
reinforce the Company's Tunisian focused business plan.

    
    -------------------------------------------------------------------------
    PRODUCTION SUMMARY
    Production area (boepd)                               Nine  months ended
                                         ------------------------------------
    September  30,                                              2007   2,006
    -------------------------------------------------------------------------
    Canada                                                       419     498
    Hungary                                                      297     475
    Tunisia                                                    1,166     544
    -------------------------------------------------------------------------
    Total boepd                                                1,882   1,517
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    


    Plans and Perspectives for 2007 and 2008
    ----------------------------------------
    Tunisia

    The Company's essential focus, for the remainder of 2007 and 2008 will be
on Tunisia, where recent successes at Sabria and Chouech Essaida are
encouraging.
    At Sabria, after four months of production, Winstar's Sabria 11 oil and
gas well (45% working interest) continues to flow as anticipated at
approximately 900 boepd (400 boepd net). The success of Sabria 11, plus
continued geo-scientific advances have resulted in the Company and its partner
ETAP (the Tunisian national oil company), planning to drill at least two new
development wells plus at least two reentries starting in the first quarter of
2008. In order to accomplish this ambitious capital program, the Company has
requested and received tenders for a second, third party drilling rig to
possibly commence work in Q1 2008. The type of rig being contemplated would be
capable of drilling up to approximately 4,500 meters, allowing Winstar to
develop the Ordovician formation at Sabria and the Silurian formation at
Chouech Essaida and Ech Chouech upon further definition of prospects within
this very prospective zone (known as the Acacus Sandstone).
    At the beginning of November 2007, Winstar began a four-well recompletion
program and a one-to-two development well drilling program focused on Triassic
oil at Chouech Essaida (100% working interest) and Devonian oil at Ech Chouech
(100% working interest). This three to four month program is designed to
develop reserves within established field boundaries. Operations will be
conducted by the new 3,000 meter rig mentioned above.
    Beginning in the last quarter of 2007 or the first quarter of 2008, the
Company plans to acquire 3D seismic data coverage over the entire 85,984 net
acres of its Chouech Essaida and Ech Chouech concessions. This new data will
take four to six months to acquire, process and interpret. With this tool,
Winstar expects to further delineate and potentially extend the existing
Triassic and Devonian oilfields plus explore the potential of the deeper
Silurian formation.

    Hungary

    The Company's very profitable Hungarian gas operations are expected to
continue into the first half of 2008, at which time it is believed the field
will reach its economic limit. Recent significant discoveries offsetting
Winstar's extensive 568,000 net acre land position in Central Hungary have
encouraged the Company to shoot a combined 2D and 3D seismic data program in
the area, and drill at least one well by July 2008.

    Canada

    Low decline production in Alberta generates sustainable cash flows with
minimal activity and overhead expense. In the current environment, Winstar
believes its best rate of return can be realized by purchasing producing
assets versus exploration drilling. Supplementary production of between 500
and 1,000 boepd could be incorporated into the existing corporate structure
with little incremental cost.
    In 2008, Winstar may selectively drill for oil at Sturgeon Lake and
down-space the Company's producing Taber oilfield. In November, the Company
received full payment of past capital costs from its joint venture partner in
the Strachan 8-10 well (50% working interest). The partners are proceeding to
re-complete the well in the Leduc formation prior to year end. Numerous
additional gas prone locations are ready to drill on Winstar's 43,768 net
acres if and when natural gas prices recover.
    Winstar has analyzed the new royalty regime announced by the Alberta
government on October 24, 2007. Based on available data, the Company is
pleased to report that these changes, which are scheduled to take effect in
January 2009, are not expected to have a material impact on Winstar's Canadian
netback or net asset value.

    Outlook
    -------
    2007

    Winstar is forecasting average net daily production (sales) of between
2,000 and 2,200 boepd in 2007 compared with 1,612 boepd in 2006. The Company's
2007 production is expected to generate funds from operations of $25 to
$30 million, or $0.74 to $0.89 per share, based on current commodity prices
and fourth quarter operational success. Capital expenditures for 2007 are
expected to total $30 to $35 million.

    2008

    Winstar expects its average net daily production (sales) during 2008 to
increase by a third over 2007 to between 2,800 and 3,000 boepd. This guidance
for 2008 is preliminary and presumes the Company will invest between 100% and
150% of its projected 2008 funds from operations. A number of material
variables, including the anticipated success of all projects, partner consent,
equipment availability, timely execution of programs, facility reliability and
commodity prices, will have a significant impact on this guidance.

    Further Information
    -------------------
    For further information, readers are invited to review Winstar's latest
Power Point presentation available on the Company's website www.winstar.ca

    BOE

    References herein to boe mean barrels of oil equivalent derived by
converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to
one barrel (bbl) of oil. Boe may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 Mcf:1 bbl is based upon an energy
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.

    Non-GAAP Measures

    "Funds from operations," "funds from operations per share" and "netbacks"
are not recognized measures under Canadian generally accepted accounting
principles. The Company uses these measures to help evaluate its performance.
Management considers netbacks an important measure as it demonstrates its
profitability relative to current commodity prices. Management uses funds from
operations to analyze performance and considers it a key measure as it
demonstrates the Company's ability to generate the cash necessary to fund
future capital investments and to repay debt. Funds from operations have been
defined by the Company as cash flow from operating activities excluding the
change in non-cash working capital related to operating activities, geological
and geophysical expenses and expenditures on asset retirement obligations and
reclamation. The Company also presents funds from operations per share whereby
amounts per share are calculated using weighted average shares outstanding
consistent with the calculation of earnings per share. Winstar's determination
of funds from operations may not be comparable to that reported by other
companies nor should it be viewed as an alternative to cash flow from
operating activities, net earnings or other measures of financial performance
calculated in accordance with Canadian GAAP. The Company also presents funds
from operations per share whereby amounts per share are calculated using
weighted average shares outstanding consistent with the calculation of
earnings per share. Winstar's determination of cash flow and funds from
operations may not be comparable to that reported by other companies nor
should it be viewed as an alternative to cash flow from operating activities,
net earnings or other measures of financial performance calculated in
accordance with Canadian GAAP.

    Seasonality

    Hungarian natural gas is sold on a monthly basis into the local market.
Monthly sales are subject to local market product demand which increases
during the heating seasons of fall and winter and curtails over the warmer
spring and summer seasons.

    Forward-Looking Statements

    This press release contains forward-looking statements. These statements
relate to future events or future performance of Winstar. When used in this
press release, the words "may", "would", "could", "will", "intend", "plan",
"anticipate", "believe", "estimate", "predict", "seek", "propose", "expect",
"potential", "continue", and similar expressions, are intended to identify
forward-looking statements. These statements involve known and unknown risks,
uncertainties, and other factors that may cause actual results or events to
differ materially from those anticipated in such forward-looking statements.
Such statements reflect the Company's current views with respect to certain
events, and are subject to certain risks, uncertainties and assumptions. Many
factors could cause the Company's actual results, performance, or achievements
to materially differ from those described in this press release. Should one or
more of these risks or uncertainties materialize, or should assumptions
underlying forward-looking statements prove incorrect, actual results may vary
materially from those described in this press release as intended, planned,
anticipated, believed, estimated, or expected. Specific forward-looking
statements in this press release include, among others, statements pertaining
to the following: factors upon which Winstar will decide whether or not to
undertake a specific course of action; and estimated volumes and timing of
future production; business plans for drilling, exploration and development;
and other expectations, beliefs, plans, goal, objectives, assumptions,
information and statements about possible future events, conditions, results
of operations or performance. The risks to which Winstar is subject include
those of the oil and gas industry in general including operational risks in
exploring for, developing and producing crude oil and natural gas; risks and
uncertainties involving geology of oil and gas deposits; volatility in global
market prices for oil and natural gas; general economic conditions;
competition; liabilities and risks, including environmental liability and
risks, inherent in oil and gas operations; uncertainties as to the
availability and cost of financing and changes in capital markets;
alternatives to and changing demand for petroleum products; and changes in
legislation and the regulatory environment, including uncertainties with
respect to the Kyoto Protocol. Furthermore, statements relating to "reserves"
or "resources" are deemed to be forward-looking statements, as they involve
the implied assessment, based on certain estimates and assumptions that the
resources and reserves described can be produced profitably in the future. The
forward-looking statements contained in this press release are expressly
qualified in their entirety by this cautionary statement. These statements
speak only as of the date of this press release. The Company does not intend
and does not assume any obligation, to update these forward-looking statements
to reflect new information, subsequent events or otherwise, expect as required
by law.

    Winstar Resources Ltd. is a Calgary-based junior oil and gas company,
    which explores for, develops, produces, and sells crude oil, natural gas
    liquids and natural gas in Tunisia, Alberta and Hungary. Winstar's common
    shares trade on the Toronto Stock Exchange under the symbol WIX.





For further information:

For further information: Mr. David Monachello, President, Phone (403)
513-4200, Email dmonachello@winstar.ca or Mr. Charles de Mestral, Chief
Executive Officer, Phone: Toll-free (Canada and USA) 1-800-875-1217 (Note: Mr.
de Mestral is based in Europe, in a time zone eight hours ahead of Calgary
time), Email: cdemestral@winstar-resources.ch

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Winstar Resources Ltd.

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