Alberta Clipper Energy Inc. (ACN - TSX) Announces Second Quarter Results


    CALGARY, Aug. 9 /CNW/ - Alberta Clipper Energy Inc. ("Alberta Clipper" or
the "Company") is pleased to announce that it has filed its unaudited
financial statements and related management's discussion and analysis for the
three and six months ended June 30, 2007 on and Certain selected financial and operational information for the
three and six months ended June 30, 2007 and June 30, 2006 comparatives are
set out below and should be read in conjunction with Alberta Clipper's
unaudited financial statements and related MD&A.
    In this report, all references to barrels of oil equivalent (boe) are
calculated converting natural gas to oil at a ratio of six thousand cubic feet
to one barrel of oil.

                             CORPORATE HIGHLIGHTS

                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
                                    June 30,   June 30,   June 30,   June 30,
                                       2007       2006       2007       2006
    Financial ($000's, except per
     share amounts)
    Petroleum and natural gas
     sales                           10,584      5,506     18,791     10,655
    Funds generated by
     operations (1)                   5,218      3,105      9,217      5,809
      Per share basic                  0.10       0.09       0.20       0.17
      Per share diluted                0.10       0.09       0.20       0.17
    Net loss                         (1,000)       (49)    (1,684)       (24)
      Per share basic                 (0.02)      0.00      (0.04)      0.00
      Per share diluted               (0.02)      0.00      (0.04)      0.00
    Capital expenditures             10,524     10,468     30,983     32,704
    Acquisitions, net of
     dispositions                    63,520          -     72,124          -
    Net debt and working
     capital surplus (deficiency)   (39,321)    (4,127)   (39,321)    (4,127)


      Crude oil and natural gas
       liquids (Bbls per day)           763        339        725        325
        Natural gas (Mcf per day)     9,024      5,914      7,683      5,383
        Barrels of oil equivalent
         (Boe per day, 6:1)           2,267      1,325      2,006      1,222
      Average realized price
        Crude oil and natural
         gas liquids ($ per Bbl)      65.00      71.43      63.75      68.23
         Natural gas ($ per Mcf)       7.39       6.14       7.50       6.82
         Barrels of oil equivalent
          ($ per Boe, 6:1)            51.30      45.67      51.75      48.17
      Netback per Boe (6:1) ($)
        Petroleum and natural
         gas sales                    51.30      45.67      51.75      48.17
        Royalties                    (11.12)     (7.52)    (11.24)    (10.09)
        Operating expenses            (8.80)     (6.72)     (9.81)     (6.74)
        Transportation expenses       (0.80)     (0.72)     (0.87)     (0.83)
    Operating Netback                 30.58      30.71      29.83      30.51

    Undeveloped land holdings
     (net acres)                    193,652    174,818    193,652    174,818

    Common Shares (000's)
    Shares outstanding, end
     of period                       56,469     36,728     56,469     36,728
    Weighted average shares,
     diluted                         51,534     35,268     47,164     34,925
    (1) Management uses funds generated by operations to analyze operating
        performance and leverage. Funds generated by operations as presented
        do not have any standardized meaning prescribed by Canadian GAAP
        and therefore it may not be comparable with the calculation of
        similar measures for other entities.


    -   Increased second quarter production to an average rate of
        2,267 boe/day, representing a 71% increase over the second quarter of
        2006 and a 30% increase over the first quarter of 2007
    -   Increased first quarter cash flow to $5.2 million, representing a 68%
        increase over the second quarter of 2006
    -   Decreased operating costs to $8.80 per boe, representing a 21%
        decrease over the first quarter of 2007
    -   Closed a 1,000 boe/d strategic acquisition in the Sylvan Lake area of
        Western Alberta
    -   Closed a $55.0 million equity bought deal financing of 13,100,000
        common shares at an issue price of $4.20 per share
    -   Completed construction of a 5,000 bbl/d (2,500 net) oil battery in
        the Sylvan Lake area of Western Alberta bringing the Company's total
        net sour oil processing capacity in the area to 4,000 boe/d


    Operating activities during the second quarter focused primarily on
completing the oil battery at Sylvan Lake, closing and integrating the Sylvan
Lake acquisition, and further exploration positioning efforts at both Sylvan
Lake and Rycroft. Drilling activity during the period was curtailed by wet
conditions that persisted through an extended spring break-up period.
    Alberta Clipper began commissioning its new operated sour oil battery at
Sylvan Lake in July after third party plant turnarounds were complete. With
completion of the new battery and an associated increase in ownership in the
existing offsetting battery, Alberta Clipper's net sour oil processing
capability at Sylvan Lake has increased to 4,000 boe/d. As a result of this
increase in oil processing capacity, and the associated increases in solution
gas and water handling capability, Alberta Clipper now has the facilities in
place that will allow for many years of expansion. In the near term, the
expanded capacity coupled with associated pipeline looping projects will allow
the Company to optimize existing producing wells that have been restricted due
to facility bottlenecks. In addition, the new battery will both eliminate
third party processing fees that the Company has been paying and add third
party processing revenues. Both of these factors will allow the Company to
realize further reductions in operating costs through the third and fourth
quarters as battery volumes increase.
    During the second quarter, Alberta Clipper closed the acquisition of
1,000 boe/d of high-netback, low decline oil and gas production in the
Company's Sylvan Lake core area. The assets are located immediately adjacent
to, and in some cases overlie Alberta Clipper's existing Leduc production
allowing the Company to fully realize the multi-zone potential of the area
when drilling exploration wells. The acquisition consists of high-netback, low
decline oil and natural gas with numerous near-term growth opportunities
ranging from horizontal development drilling to low cost re-completions. As a
result of the acquisition, Alberta Clipper now controls an infrastructure base
that covers 4 townships and includes interests in 6 oil batteries, 2 gas
facilities, and significant pipeline infrastructure.
    On the exploration front, the Company successfully acquired an additional
2 sections of land at Sylvan Lake where 3 additional drill-ready Leduc
exploration prospects had been identified on the Company's existing 3D seismic
database. In addition, a 7.4 square kilometer 3D seismic survey was shot in
the area during the period which high-graded a Mississippian exploration
prospect that will be drilled prior to year-end. At Rycroft, Alberta Clipper
shot a 55 square kilometer 3D over highly prospective lands with proven
multi-zone potential. Exploration drilling on these lands is scheduled to
begin in late 2007 or early 2008. The Company's total 3D seismic data coverage
now stands at over 33 townships.


    The new battery at Sylvan Lake initiated testing in early July and became
fully operational at the end of the third week of July, once several minor
start-up issues were addressed. Following the start-up of the battery, the
previously announced Leduc discovery at 11-35-38-4W5 ("11-35") was brought on
production at a restricted rate of 400 boe/d gross (200 boe/d net). Alberta
Clipper has subsequently applied for a special allowable on the well. The
11-35 well is the 5th discovery brought on-stream by the Company in the Sylvan
Lake area.
    In addition to tying-in 11-35 and starting up the new facility, Alberta
Clipper spud the first of its four well 2nd half Leduc exploration program in
mid-July. The 15-2-39-4W5 ("15-2") well, in which Alberta Clipper holds a 50%
working interest is expected to be rig released by mid-August. All of the
exploratory Leduc locations being drilled over the remainder of the year are
in the area where the Company has experienced a high exploratory success rate
and where the Company now holds the mineral interests in the prospective
shallow section. Other activity in the Sylvan Lake area will include Leduc and
Mississippian development drilling and numerous re-completions on existing
Mississippian wells.
    Alberta Clipper has revised its capital program for the remainder of 2007
in light of both the strategic acquisition that was closed in the second
quarter and the strong oil price conditions that persist today. With the
successful completion of the asset acquisition in the Sylvan Lake area, the
Company has re-allocated gas drilling capital towards oil optimization and
exploitation projects. Alberta Clippers's Leduc light oil exploration program
remains unchanged with these revisions and the Company is proceeding with
licensing activities on 5 gas drilling locations so the gas drilling program
can quickly be revived once gas prices improve. As a result of the
re-allocation of gas capital to oil exploitation projects, the current
estimate for capital expenditures (net of acquisitions) for 2007 has been
reduced to $50 million from the original $60 million estimate.
    Alberta Clipper's capital program for the remainder of the year now
consists of a minimum of 10 wells (5.46 net) and a minimum of 8
re-completions. In addition, 5 gas wells are being licensed at Trutch and
Rycroft to prepare for a gas price recovery. Seventy percent of the second
half program will focus in and around the Company's Sylvan Lake project area
where the inventory exists to add incremental oil projects with success.
    At Sylvan Lake the Company is planning to drill a minimum of 7 additional
wells prior to year-end. One Leduc exploratory well is currently in progress,
drilling licenses have been granted by the EUB on 2 additional exploratory
locations and licensing is currently underway on 1 further Leduc exploratory
location and 1 development location. Four of the wells at Sylvan Lake will be
drilled to evaluate upside on the newly acquired assets as both stand-alone
locations and as secondary zones above underlying Leduc targets. Company
interest in these wells ranges from 37.5% to 100% and averages 60%.
Re-completion operations at Sylvan Lake will focus on increasing the recovery
factors in the Company's existing Leduc and Pekisko oil pools.
    At Trutch, 4 locations are currently being licensed in preparation for
drilling once commodity price outlook improves. In addition, 2 wells are
awaiting re-completion in a recently proven secondary zone. The success
experienced on the north side of Trutch Creek during the first quarter has
resulted in the Company focusing upcoming activities on this portion of the
land block. Additional drilling in this area will continue to delineate the
productive extent of this property.
    The continued cyclical nature of prices for both oil and gas accentuates
the value of focused operatorship, infrastructure control, and the diversified
commodity base that Alberta Clipper has established. These asset attributes
provide the Company with the ability to quickly re-focus to the commodity that
provides the best return on capital employed. The capital projects that the
Company has undertaken in the past 2 years, and the most recent acquisition of
low decline high-netback assets, continues to improve the Company's cost
structure. These two factors, along with the expertise provided by the
Company's proven exploration and engineering teams, strategically positions
the Company for longer term profitable growth.

    Alberta Clipper Energy Inc. is a publicly traded Canadian energy company
involved in the exploration, development and production of natural gas and
crude oil in western Canada.

    As referred to above, to view Alberta Clipper's unaudited financial
statements and related MD&A for the three and six months ended June 30, 2007
please visit or To the extent
investors do not have access to the internet, copies of the audited financials
and related MD&A can be obtained on request without charge by contacting
Investor Relations at (403) 440-3474 or at 1800, 500 - 4th Avenue SW, Calgary,
Alberta, T2P 2V6.

    This press release may contain forward-looking statements including
expectations of future production, cash flow and earnings. More particularly,
this press release contains statements concerning Alberta Clipper's future
production estimates, expansion of oil and gas property interests, exploration
and development drilling, seismic operations, regulatory applications, payout
estimates, capital expenditures, number and drilling locations to be drilled
in 2007, seismic acquisitions and facilities upgrades. These statements are
based on current expectations that involve a number of risks and
uncertainties, which could cause actual results to differ from those
anticipated. These risks include, but are not limited to: the 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 reserve estimates; the uncertainty of estimates and projections relating to
production, costs and expenses, and health, safety and environmental risks),
commodity price, price and exchange rate fluctuation and uncertainties
resulting from potential delays or changes in plans with respect to
exploration or development projects or capital expenditures. Additional
information on these and other factors that could affect Alberta Clipper's
operations or financial results are included in Alberta Clipper Energy's
reports on file with Canadian securities regulatory authorities.
    The forward-looking statements or information contained in this news
release are made as of the date hereof and Alberta Clipper undertakes no
obligation to update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events or
otherwise, unless so required by applicable securities laws.

    Oil and Gas Advisory
    This press release contains disclosure expressed as "Boe/d". All oil and
natural gas equivalency volumes have been derived using the ratio of six
thousand cubic feet of natural gas to one barrel of oil. Equivalency measures
may be misleading, particularly if used in isolation. A conversion ratio of
six thousand cubic feet of natural gas to one barrel of oil is based on an
energy equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the well head.

    The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. Not for
distribution to U.S. newswire services or for dissemination in the United
States. Any failure to comply with this restriction may constitute a violation
of U.S. securities law.

    %SEDAR: 00022458E

For further information:

For further information: Kel Johnston, President & C.E.O., Alberta
Clipper Energy Inc., Telephone: (403) 440-3474, Facsimile: (403) 440-3475,

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