COSTA releases 2006 year-end results

    CALGARY, April 30 /CNW/ - COSTA Energy Inc. ("COSTA" or the Company)(TSX
Venture Exchange: COE) has released its financial and operating results for
the year ended December 31, 2006.


    Financial Year Ended Dec. 31,                        2006           2005
    Production and prices

    Natural gas sales (mcf/d)                             697             86
    Oil and NGL sales (bbls/d)                             25              2
    BOE sales (boe/d)                                     140             17
    Natural gas price ($/mcf)                           $6.59         $11.39
    Oil and NGL price ($/bbl)                          $61.92         $58.13
    Financial (Audited)

    Oil and gas revenue ($000's)                       $2,217           $408
    Net loss ($000's)                                 $(6,031)         $(730)
    Per share, basic and diluted                       $(0.46)        $(0.10)
    Shares (Audited)

    Weighted average basic and diluted             13,030,672      7,304,201
    Outstanding at year end                        26,753,742     18,269,073


    The Company experienced a loss of $6,030,709 ($0.46 per share, basic and
diluted) for the year ended December 31, 2006. Disappointing drilling results,
a decrease in forecast natural gas prices and the loss of ARTC effective
January 1, 2007 has had a negative effect on the value of COSTA's properties.
For 2006, the Company has calculated a ceiling test impairment of $3.5 million
which is included in the year-end loss. COSTA's production continues to be
about 83% natural gas. In late December 2006, the Company issued 9.1 million
common units at $0.11 per unit and 3.7 million flow-through units at
$0.135 per unit for gross proceeds of $1.5 million. Each common unit consists
of one common share and one warrant. Each flow-through unit consists of one
flow-through common share and one warrant. Each warrant will entitle the
holder to purchase one common share at a price of $0.145 per share until March
31, 2008.

    2006 Activity

    A total of 7 wells (net 3.4) were drilled and 3 wells (net 2.0) were
recompleted in 2006; unfortunately only one of these operations was
successful. The well drilled at Veteran (net 0.7) was completed as an oil well
and is currently on production. Total capital of $2.65 million was invested;
$2.13 million on the drilling and workover program, $0.33 million in seismic
and $0.19 million in land acquisition. The funds spent on the acquisition of
land and seismic are generally for new plays that are planned to be drilled in
2007. In response to the poor drilling results, COSTA also took the difficult
step of significantly reducing its general and administrative costs, primarily
by releasing three full-time employees, 50% of its staff, effective
December 31, 2006.

    2007 Outlook

    For 2007, the Company has planned a cautious capital program of drilling
and recompletions. A Cardium oil well (net 41%) at Pembina has been refraced
and if successful, another 5 wells can be similarly refraced. The Company has
drilled a horizontal well at Macoun, in south east Saskatchewan. After the
initial production test, a workover has been proposed to attempt to reduce the
water and increase the oil production. Three infill development wells at
Alderson are planned in the third quarter for shallow gas. A shallow Colony
gas well north of Edmonton, based on propriety seismic, is planned for summer
this year. The Company will evaluate the sale of fully developed properties;
and the sale or farm-out of properties that are not consistent with the
Company's current conservative risk profile.

    About COSTA

    COSTA's 2006 annual report, management's discussion and analysis and
audited financial statements for the year ended December 31, 2006 are
available on and the Company's website at
    COSTA Energy Inc. 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 Alberta, British Columbia and Saskatchewan.

    Forward-Looking Statements: Certain information in this press release
contains forward-looking statements, including, without limitation, drilling
plans, expected results and certain expected expenses and costs in subsequent
periods. These forward-looking statements involve inherent risks and
uncertainties, some of which are beyond the Company's control, including but
not limited to the impact of general economic conditions, industry conditions,
commodity price volatility, currency fluctuations, environmental risks,
competition, reserve estimates, ability to access sufficient capital from
internal and external sources and industry regulation. The assumptions used in
the preparation of such information, although considered reasonable by COSTA
at the time of preparation, may prove to be incorrect and actual results may
differ materially from those expressed in or implied by these forward-looking
statements. The Company disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as otherwise required by applicable
securities laws.

    Oil Equivalent Conversion: Barrel of oil equivalent ("boe") amounts have
been calculated using a conversion rate of six thousand cubic feet of natural
gas to one barrel of oil and natural gas liquids equivalent. This ratio is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead or point
of sale. Barrel of oil equivalents may be misleading, particularly if used in

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

For further information:

For further information: Requests for shareholder information should be
directed to: Mr. Terry D. Brooker, President and Chief Executive Officer,
COSTA Energy Inc., (403) 206-3430, Email:

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