Eagle Rock Reports 2009 First Quarter Results

    CALGARY, May 27 /CNW/ - Eagle Rock Exploration ("Eagle Rock" or "the
Corporation") (TSXV:ERX) is pleased to announce it has filed on SEDAR its
Unaudited Interim Financial Statements and Management's Discussion and
Analysis (MD&A) for the first quarter ended March 31, 2009.

    Selected Quarterly Information

    The following table provides a summary of key financial results.

                                                Three months    Three months
                                              ended March 30  ended March 30
                                                        2009            2008
    $000's except production and
     per share amounts                               $ 000's         $ 000's
    Average daily production - boed                      594             482
    Petroleum and natural gas revenue                  2,295           3,526
    Cash flow from operating activities                1,093           1,172
    Income (loss) for the period                        (916)            125
    Basic and diluted income (loss) per share          (0.02)           0.00
    Capital expenditures                               1,376           2,369
    Total assets                                      52,181          38,590
    Net debt                                         (21,004)        (10,763)
    Common shares outstanding - basic                 54,543          54,001

    Total petroleum and natural gas revenues (88% oil) were down by 35% from
$3,527,000 in the first quarter 2008 to $2,295,000 for the first quarter 2009
with cash flow from operating activities falling by 7% from $1,172,000 in the
first quarter 2008 to $1,093,000 for first quarter 2009. This revenue decline
is a result of lower oil prices. Eagle Rock averaged $43 per/boe in the first
quarter 2009 compared to $80 per/boe in the first quarter 2008, a decrease of
    The net loss was $916,000 during the first quarter 2009 compared to net
income of $125,000 in the first quarter 2008.
    Total production in the first quarter 2009 was 53,428 boe (average 594
boed); a 21% increase from first quarter 2008 for which total production was
44,162 boe (average 482 boed). This increase reflects the first full quarter
of production from properties acquired in December 2008 and output from
successful wells drilled in 2008.
    This is Eagle Rock's highest production for a quarter in its history.
Current production is approximately 520 boed, 85% of which is oil. The
Corporation believes it could restore another 50 bbls of oil production lost
to mechanical and other well problems once sufficient capital resources are
    The Corporation's capital program has been suspended as the Corporation
continues to operate under a forbearance agreement with its bank. The bank's
requirement to maintain a working capital ratio of 1:1 was not met by Eagle
Rock at either December 31, 2008 or March 31, 2009. Eagle Rock's net debt of
$21 million continues to be a challenge and various alternatives are under
consideration to reduce the level of debt. Ongoing cash flows are sufficient
to cover current operating expenses and to meet the bank's monthly principle
payment of $175,000. The forbearance agreement with the bank requires that
Eagle Rock's working capital ratio be in compliance in the second quarter
financial statements for 2009 to be filed by August 29, 2009.

    About Eagle Rock

    Eagle Rock is a publicly traded energy company involved in the
exploration and development of low to medium risk oil and gas properties in
Western Canada. Eagle Rock's common shares trade on the TSX Venture Exchange
under the symbol "ERX". For more information please visit the Company's
website at: www.eaglerockexploration.com

    Neither the TSX Venture Exchange nor its Regulation Services Provider (as
    the term is defined in the Policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release.

    Forward-looking Information

    This press release includes forward-looking statements and assumptions
respecting Eagle Rock's strategies, future operations, expected financial
results, financial sources, commodity prices, costs of production and quantum
of oil and natural gas reserves and discusses certain issues, risks and
uncertainties that can be expected to impact on any of such matters. By their
nature, forward-looking statements are subject to numerous risks and
uncertainties that can significantly affect future results. Actual future
results may differ materially from those assumed or described in such
forward-looking statements as a result of the impact of issues, risks and
uncertainties whether described herein or not, which Eagle Rock may not be
able to control. The reader is therefore cautioned not to place undue reliance
on such forward-looking statements. The forward-looking statements contained
in this news release are made as of the date hereof and Eagle Rock undertakes
no obligation to update publicly or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by applicable securities laws. The forward-looking statements
contained in this news release are expressly qualified by this cautionary
statement. In addition, the term BOE or BOE's may be misleading, particularly
if used in isolation. A BOE (barrel of oil equivalent) conversion ratio of 6
Mcf per one (1) BOE is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.

For further information:

For further information: Jim Silye, President and Chief Executive
Officer, Tel: (403) 269-4040, Fax: (403) 261-1978, E-mail: jimsilye@eagler.ca

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