First Calgary Petroleums Ltd. Announces 2007 Second Quarter Results



    CALGARY, Aug. 2 /CNW/ - First Calgary Petroleums Ltd. ("FCP" or the
"Company") announces its results for the six months ended June 30, 2007.

    
    HIGHLIGHTS

    Drilling success on Algeria Block 405b

    -   Continued appraisal of the TAGI zone with success in LES and MZLN
        pools

    -   LES-9 well recently spudded to evaluate structural extension of the
        TAGI - potential to add significant recoverable resources

    -   FCP estimates that recent drilling and testing results in the "LES-
        LEC"TAGI oil pool has added significant proven reserves over the year
        end (2006) audited values assigned to this area.

    MLE Commercialisation

    -   Discussions underway with partner Sonatrach on expansion of MLE gas
        plant and associated pipelines, to accommodate volumes from the CAFC
        as part of an integrated Block 405b development strategy

    -   Expansion targeted to produce in range of 300-400 MMCF/D gas and up
        to 80 MB/D liquids

    -   Front End Engineering and Design (FEED) work progressing, following
        award of contract in June 2007

    Financial

    -   C$145 million (net) raised in April 2007 equity bought deal to fund
        2007 capital programme

    -   FCP has concluded that the new Windfall Profits Tax will apply to
        FCP's liquids production only
    

    Richard Anderson, President and CEO commented:
    "The first half of 2007 has seen excellent progress with both the TAGI
drilling and the MLE field development. The LES-LEC/MZLN TAGI pools will
represent a major second development project to follow MLE. As a result, FCP
is on the way to becoming a significant liquids and gas producer.
    "Long term financing continues to be a focus area. Good progress on this
front is being made in this area with the assistance of our advisors Citigroup
and Deutsche Bank, with a number of alternative options being considered."



    First Calgary Petroleums Ltd. is an oil and gas exploration company
actively engaged in international exploration and development activities in
Algeria. The Company's common shares trade on the Toronto Stock Exchange in
Canada (FCP) and on the AIM market of the London Stock Exchange in the UK
(FPL).



    First Calgary Petroleums Ltd.
    Six months ended June 30, 2007 (unaudited)
    (in thousands of U.S. dollars unless otherwise indicated)
    -------------------------------------------------------------------------

    MANAGEMENT'S DISCUSSION AND ANALYSIS

    Management's discussion and analysis (MD&A) is a review of operations,
current financial position and outlook for First Calgary Petroleums Ltd.
(First Calgary, FCP or the Company). It should be read in conjunction with the
unaudited interim financial statements for the six month periods ended
June 30, 2007 and 2006 and the audited financial statements and MD&A for the
year ended December 31, 2006. In this discussion and analysis $ refers to the
U.S. dollar and C$ refers to the Canadian dollar.

    OPERATIONAL REVIEW

    Appraisal Operations

    Having completed the five year exploration phase in 2006, in December
last year First Calgary received an extension under its production sharing
contract (PSC) with Sonatrach to complete its Ledjmet Block 405b appraisal
activities of the Central Area Field Complex (CAFC), and to submit
commerciality reports and apply for exploitation permits thereon.
    FCP continued to operate two drilling rigs and a single test spread on
the block through the end of the second quarter. It is anticipated that FCP
will release one more rig, endeavoring to complete its appraisal of the CAFC
by the first quarter of 2008.
    The appraisal of the TAGI zone continued to be the focus of the drilling
effort throughout Q2 2007, with the ongoing success in the LES and MZLN pools.
To date FCP has drilled 5 wells in the "LES-LEC" TAGI oil pool (LES-3, LES-6,
LES-7 and LEC-2) and has recently logged LES-8 in early July. This pool has
been mapped utilizing 3D seismic and well control, representing an area of
approximately 29 km(2). The pool has additional upside potential that will be
tested by the LES-9 location that recently commenced drilling.
    In addition to LES-LEC TAGI pool, FCP is also continuing to appraise the
MZLN TAGI pool (gas/condensate) that was discovered with the MZLN-2 well. The
MZLN-4 well results support that the TAGI pool extends to the NE from MZLN-2,
and additional drilling at MZLN-5 (currently drilling) and MZLN-6 are planned
to evaluate the resource potential of this pool.
    FCP believes that the latest drilling, well test results and seismic
interpretation will result in a significant increase in the proven reserves
assigned to the LES-LEC and MZLN TAGI pools over FCP's audited year-end (2006)
reserve report. Of particular interest is the LES-9 appraisal well, which is
being drilled on a structural extension to the LES-LEC TAGI pool. If
successful, LES-9 could also add substantially to the recoverable reserves in
the LES-LEC TAGI pool.
    In addition to the evaluation of the TAGI zone within the CAFC, FCP has
continued to appraise the Lower Devonian with deep well penetrations and
testing at LEW-3, LES-6, LES-7, LEC-2, MZLN-4 and the upcoming wells at MZLN-5
and LES-9.
    The LES/LEC/MZLN TAGI pools represent a second major anchor development
project to MLE. Being mostly oil and liquids, the TAGI pools in CAFC are
transforming FCP into both an oil and gas company based on these recent
appraisal results. The remaining appraisal drilling programme within the CAFC,
which is focusing on the upside potential of the TAGI zone, will be completed
with the drilling of the LES-9 and MZLN-6 wells. The CAFC appraisal programme
is anticipated to be completed and the development plan submitted by Q1 2008.
    The ZER-2 appraisal well, located in the northern part of the block
4.3 km SW of ZER-1, finished drilling in early January to a depth of 4562
metres. Testing operations were completed in the first quarter. FCP is
evaluating the test results with its partner Sonatrach.
    In anticipation of an extensive development drilling programme in the
CAFC and the approved development drilling programme in MLE, FCP has entered
into a contract with Western-Geophysical to shoot a high resolution seismic
programme covering the MLE field area and the primary pool areas within the
CAFC. FCP has received approval from Sonatrach, FCP's partner, to shoot and
process 250 Km2 of seismic utilizing Western's state of the art "Q-Land"
acquisition system. FCP anticipates the new seismic will better define subtle
fault traps and stratigraphic details that will enhance the development
planning of the pools in both field areas.
    Readers are referred to the map which is available on the Company's
website at www.fcpl.ca

    MLE Commercialisation

    This past year's commercialisation activities culminated in February 2007
in FCP receiving approval from the Algerian regulatory authority ALNAFT for
the Development Plan for the MLE oil and gas field on Block 405b. This
approval signifies a key milestone reached for First Calgary as it grows into
an oil and gas development and production company in addition to its focus on
exploration.
    Included as part of the Block 405b development planning are a gas plant
and field gathering system and facilities designed to process 230 million
cubic feet of sales gas per day (MMCF/D) on a gross basis and associated
natural gas liquids and oil. FCP is currently in discussions with its partner
Sonatrach regarding the expansion of the approved gas plant and associated
pipelines, to accommodate volumes from the CAFC as part of an integrated block
development strategy. Expansion is being targeted to produce in the range of
300 - 400 MMCF/D sales gas with up to 80 thousand barrels per day (MB/D) of
liquids.
    In order to achieve first production in early 2010, FCP has established
an aggressive project timeline. An experienced project management team has
been staffed to ensure that the project timeline is achieved. As planned, the
Front End Engineering and Design (FEED) contract was awarded in the second
quarter of 2007. Some of the key project deliverables for 2007 and early 2008
are completing the FEED work, identifying and ordering long-lead items (LLI),
and tendering and awarding the engineering, procurement and construction (EPC)
contract.

    
    FINANCIAL RESULTS
                                      Three months ended    Six months ended
                                             June 30             June 30
                                      ------------------- -------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------

    Net income (loss)                 $ (1,613) $  6,577  $ (4,010) $  5,264

    The three and six month periods ended June 30, 2007 are in net loss
positions compared to net income positions in 2006 due to foreign exchange
gains realised in Q2-06 and increasing G&A costs as detailed below.


                                      Three months ended    Six months ended
                                             June 30             June 30
                                      ------------------- -------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------

    Interest                          $  1,502  $  1,902  $  2,493  $  2,788

    Interest income was lower in 2007 than the comparable 2006 period due to
higher average cash and cash equivalents on hand in 2006.


                                      Three months ended    Six months ended
                                             June 30             June 30
                                      ------------------- -------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------
    General and administrative        $  4,394  $  2,114  $  8,616  $  3,829
    Capitalised                         (1,108)     (637)   (2,366)   (1,080)
                                      ------------------- -------------------
    Expensed                          $  3,286  $  1,477  $  6,250  $  2,749

    The increase in general and administrative costs in 2007 is primarily the
result of growing employee levels required to manage and operate the Algerian
projects. Capitalised G&A is higher in 2007 due to growth in operational
staffing, resulting in increased capitalised salaries.

                                      Three months ended    Six months ended
    Property, plant and equipment            June 30             June 30
     expenditures                     ------------------- -------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------
    Drilling, completion and testing  $ 30,147  $ 34,105  $ 70,189  $ 58,066
    Geological and geophysical             891       894     1,669     1,646
    MLE commercialisation                3,608       634    10,750     6,032
    -------------------------------------------------------------------------
                                        34,646    35,633    82,608    65,744
    Block management and
     administration                      3,463     5,299     6,244    10,044
    Corporate                              395       190       558       230
    -------------------------------------------------------------------------
    Total property, plant and
     equipment expenditures             38,504    41,122    89,410    76,018

    Less non-cash expenditures
     (stock-based compensation,
     asset retirement provisions)        1,358       972     2,267     1,634
    -------------------------------------------------------------------------
    Net cash property, plant and
     equipment expenditures           $ 37,146  $ 40,150  $ 87,143  $ 74,384
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Capital expenditures are lower in the three months ended June 30, 2007 as
FCP used two drilling rigs compared to three in 2006. This is partially offset
by increasing MLE commercialisation costs. Costs for the six months ended June
2007 are higher than 2006 as more wells were drilled with the same number of
drilling rigs.

    Liquidity and Capital Resources

    First Calgary had $123.3 million of working capital on hand as at
June 30, 2007 compared with $82.7 million at the end of 2006. Cash balances
and short-term investments were $143.8 million at the end of the quarter. The
Company has no credit or debt agreements in place.
    Given the nature of an exploration company, FCP's financial resources
fluctuate with the amount and timing of equity financings and its capital
programme. The $40.6 million increase in the Company's working capital from
December 31, 2006 is primarily the result of the proceeds of an equity issue
in April this year, offset by capital expenditure for commercialisation of MLE
and appraisal drilling.
    In April 2007 FCP raised C$145 million net of expenses from the issue of
30 million common shares at a price of C$5.08 per common share. Together with
existing resources, this financing will provide the Company with working
capital needed to appraise the CAFC and invest in MLE field pre-development
expenditures.
    Development of the Ledjmet Block 405b reserves through to commercial
production will require significant funding, with 75 percent being FCP's
share. To date, FCP has relied upon equity to fund its short-term operations
and capital programmes. Development funding is expected to be in the form of
debt, equity, quasi-equity, joint venture farm-out arrangements or some
combination thereof. First Calgary has been approached by a number of parties
seeking to fund the block development and appointed Citigroup in 2006 as sole
advisor to the Company on project debt for the MLE field development. Deutsche
Bank was also appointed as corporate financial advisor in 2006, and FCP is
working with the assistance of both banks on development funding.
    The gross development cost of the MLE field is currently estimated at
$1.0 - $1.3 billion (depending on plant and pipeline sizes), and will mainly
be incurred in 2008 and 2009. These cost estimates will be refined by the MLE
FEED work now underway. Development cost estimates for the CAFC will be
developed as appraisal work is completed. To date, no financing arrangements
have been entered into to fund the Ledjmet development. However, the Company
is advancing discussions regarding a variety of alternative funding
arrangements as referred to above, and expects to determine the financing plan
later this year.
    The Company is listed on the Toronto Stock Exchange and the AIM market of
the London Stock Exchange. The diluted numbers of shares outstanding at the
following dates were:

    
                                        August 1,      June 30,  December 31,
                                            2007          2007          2006
    -------------------------------------------------------------------------
    Common shares                    254,419,030   254,419,030   223,686,330
    Employee stock options            12,067,901    12,067,901     9,135,600
    -------------------------------------------------------------------------
    Diluted shares outstanding       266,486,931   266,486,931   232,821,930
    -------------------------------------------------------------------------


    Selected Quarterly Information

                               2007                      2006
    (000's of
     U.S. dollars)         Q2       Q1       Q4       Q3       Q2       Q1
    -------------------------------------------------------------------------
    Interest income    $  1,502 $    991 $  1,633 $  2,052 $  1,902 $    886

    Income (loss)        (1,613)  (2,397)  (1,506)    (266)   6,577   (1,313)
    Income (loss) per
     share                (0.01)   (0.01)   (0.01)    0.00     0.03    (0.01)

    Total Assets        775,867  643,642  650,053  649,354  641,938  491,776


                               2005
    (000's of
     U.S. dollars)         Q4       Q3
    -------------------------------------
    Interest income    $    887 $  1,039

    Income (loss)        (4,181)   1,797
    Income (loss) per
     share                (0.02)    0.01

    Total Assets        482,776  478,103
    

    Interest income is higher in Q2 2007 compared to Q1 2007 due to higher
average cash and cash equivalent balances on hand (equity financing completed
in April 2007).
    Total assets have increased due to the proceeds on the April share issue.

    Outlook

    First Calgary's primary objective is to commercialise Block 405b,
starting with the MLE field, then expanding the development to incorporate the
CAFC. In addition, new exploration acreage is being sought to utilize the
Company's experienced exploration team and expand its exploration portfolio.
    In the short-term, over the period to early next year, key activities
include:

    
    -   Complete the FEED work for MLE;
    -   Identify and order long lead items necessary for the MLE field
        development;
    -   Prepare tender documents for the EPC contract for the MLE
        development;
    -   Finalise appraisal drilling of the CAFC and continue to formulate a
        second stage development plan for the CAFC;
    -   Determine and execute the financing for the MLE field development and
        ongoing activities in the CAFC; and
    -   Continue to seek attractive new exploration acreage opportunities.
    

    Changes in accounting policies

    (a) Financial Instruments - recognition and measurement

    This new standard requires all financial instruments within its scope,
including all derivatives, to be recognized on the balance sheet initially at
fair value. Subsequent measurement of all financial assets and liabilities
except those held-for-trading and available for sale are measured at amortized
cost determined using the effective interest rate method. The effect of
adopting the new standard is not material to the financial statements.

    (b) Other comprehensive income

    The new standards require a statement of comprehensive income, which is
comprised of net earnings (loss) and other comprehensive income (loss). For
the company, there are no items in comprehensive income (loss) other than net
earnings (loss).
    Under the new accounting standards, cumulative translation adjustments
are included in accumulated other comprehensive income. As a result, the
Company's cumulative translation adjustment at December 31, 2006 and June 30,
2007 of $6.5 million has been reclassified to accumulated other comprehensive
income in shareholders' equity.

    (c) Accounting policies not yet adopted

    Two new Canadian accounting standards have been issued which will require
additional disclosure in the Company's financial statements commencing
January 1, 2008, about the Company's financial instruments as well as its
capital and how it is managed.

    Internal Controls Over Financial Reporting

    Internal controls have been designed to provide reasonable assurance
regarding the reliability of the Company's financial reporting and the
preparation of financial statements together with other financial information
for external purposes in accordance with Canadian GAAP. During the quarter
ended June 30, 2007, there have been no changes in the design of the Company's
internal controls over financial reporting that have materially affected, or
are reasonably likely to materially affect, the Company's internal controls
over financial reporting.

    Business Risks and Uncertainties

    The MD&A and Annual Information Form (AIF) for the year ended
December 31, 2006 includes an overview of certain business risks and
uncertainties facing the Company. Those risks remain in effect as at June 30,
2007.

    Advisory Regarding Forward-Looking Statements

    Certain information with respect to the Company contained in this report,
including management's assessment of future plans and operations, contains
forward-looking statements. These forward-looking statements are based on
assumptions and are subject to numerous risks and uncertainties, some of which
are beyond FCP's control, including the timing and receipt of joint venture
and government approvals, the impact of general economic conditions, industry
conditions, volatility of commodity prices, currency exchange rate
fluctuations, reserve estimates, environmental risks, competition from other
explorers, stock market volatility and ability to access sufficient capital.
In addition, actual results may vary because FCP principally operates in less
developed legal systems than jurisdictions with more established economies and
relies on continuing existing strategic relationships and forming new ones
with other entities in the oil and gas industry, such as joint venture parties
and farm-in partners. FCP's actual results, performance or achievement could
differ materially from those expressed in, or implied by, these
forward-looking statements and, accordingly, no assurance can be given that
any events anticipated by the forward-looking statements will transpire or
occur.

    Company Information

    Additional information is available on FCP's website at www.fcpl.ca or on
SEDAR's website at www.sedar.com.



    
    FIRST CALGARY PETROLEUMS LTD.
    Consolidated Balance Sheets

    (unaudited)                                        June 30,  December 31,
    (in thousands of U.S. dollars)                        2007          2006
    -------------------------------------------------------------------------

    Assets
      Current assets
        Cash and cash equivalents                   $  143,788    $  108,489
        Accounts receivable                              1,218           738
        Deposits and prepaid expenses                    1,591           707
    -------------------------------------------------------------------------
                                                       146,597       109,934

      Property, plant and equipment                    629,270       540,119
    -------------------------------------------------------------------------
                                                    $  775,867    $  650,053
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
      Current liabilities
        Accounts payable and accrued liabilities    $   23,278    $   27,226

      Asset retirement obligations                         901           687

      Future income taxes                               18,200        18,200

    Shareholders' equity
      Capital stock (note 3)                           763,023       631,933
      Contributed surplus (note 3)                      21,654        19,186
      Accumulated other comprehensive income             6,502         6,502
      Deficit                                          (57,691)      (53,681)
    -------------------------------------------------------------------------
                                                       733,488       603,940

    Operations and commitments (note 2)
    -------------------------------------------------------------------------
                                                    $  775,867    $  650,053
    -------------------------------------------------------------------------

    See accompanying notes to interim consolidated financial statements.


    FIRST CALGARY PETROLEUMS LTD.
    Consolidated Statements of Operations and Deficit

                                      Three months ended    Six months ended
    (unaudited)                              June 30             June 30
    (in thousands of U.S. dollars)       2007      2006      2007      2006
    -------------------------------------------------------------------------

    Revenue
      Interest                        $  1,502  $  1,902  $  2,493  $  2,788

    Expenses
      General and administrative         3,286     1,477     6,250     2,749
      Foreign exchange gain             (1,169)   (6,854)   (1,108)   (6,860)
      Stock-based compensation (note 3)    841       682     1,074     1,593
      Depreciation and accretion           157        20       287        42
    -------------------------------------------------------------------------
                                         3,115    (4,675)    6,503    (2,476)

    Income (loss) for the period        (1,613)    6,577    (4,010)    5,264

    Deficit, beginning of period       (56,078)  (40,286)  (53,681)  (38,973)

    -------------------------------------------------------------------------
    Deficit, end of period             (57,691)  (33,709)  (57,691)  (33,709)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Income (loss) per share (note 3)
      Basic and diluted               $  (0.01) $   0.03  $  (0.02) $   0.02
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to interim consolidated financial statements.


    FIRST CALGARY PETROLEUMS LTD.
    Consolidated Statements of Cash Flows

                                      Three months ended    Six months ended
    (unaudited)                              June 30             June 30
    (in thousands of U.S. dollars)       2007      2006      2007      2006
    -------------------------------------------------------------------------

    Operating activities
      Income (loss) for the period    $ (1,613) $  6,577  $ (4,010) $  5,264
      Items not involving cash
        Stock-based compensation           841       682     1,074     1,593
        Foreign exchange gain           (1,487)     (607)   (1,548)     (670)
        Depreciation and accretion         157        42       287        75
    -------------------------------------------------------------------------
                                        (2,102)    6,694    (4,197)    6,262
        Change in non-cash working
         capital                          (624)     (636)   (1,243)    1,863
    -------------------------------------------------------------------------
                                        (2,726)    6,058    (5,440)    8,125
    -------------------------------------------------------------------------

    Financing activities
      Proceeds from issuance
       of shares                       135,671   150,941   135,671   150,941
      Proceeds from exercise
       of options                        1,142     2,202     1,281     2,359
      Issue costs                       (6,549)   (7,942)   (6,549)   (7,942)
    -------------------------------------------------------------------------
                                       130,264   145,201   130,403   145,358

    Investing activities
    Property, plant and equipment
     expenditures                      (37,146)  (40,150)  (87,143)  (74,384)
    Change in non-cash working capital     514    (2,938)   (4,039)    3,101
    -------------------------------------------------------------------------
                                       (36,632)  (43,088)  (91,182)  (71,283)

    -------------------------------------------------------------------------
    Change in cash and cash
     equivalents                        90,906   108,171    33,781    82,200

    Exchange rate fluctuations
     on change in cash and cash
     equivalents                         1,533       (77)    1,518        (7)

    Cash and cash equivalents,
     beginning of period                51,349    81,981   108,489   107,882

    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                    $143,788  $190,075  $143,788  $190,075
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to interim consolidated financial statements.


    First Calgary Petroleums Ltd.
    Six months ended June 30, 2007 (unaudited)
    (in thousands of U.S. dollars unless otherwise indicated)
    -------------------------------------------------------------------------

        These interim consolidated financial statements of First Calgary
        Petroleums Ltd. (FCP or the Company) have been prepared by management
        in accordance with accounting principles generally accepted in Canada
        following the same accounting policies as the consolidated financial
        statements for the year ended December 31, 2006, except as noted
        below. The disclosures included below are incremental to those
        included with the annual consolidated financial statements. The
        interim consolidated financial statements should be read in
        conjunction with the consolidated financial statements and the notes
        thereto for the year ended December 31, 2006.

    1.  Changes in accounting policies:

    (a) Financial Instruments - recognition and measurement

        This new standard requires all financial instruments within its
        scope, including all derivatives, to be recognized on the balance
        sheet initially at fair value. Subsequent measurement of all
        financial assets and liabilities except those held-for-trading and
        available for sale are measured at amortized cost determined using
        the effective interest rate method. The effect of adopting the new
        standard was not material to the financial statements.

    (b) Other comprehensive income

        The new standards require a statement of comprehensive income, which
        is comprised of net earnings and other comprehensive income. For the
        company, there are no items in comprehensive income other than the
        loss for the period.

        Under the new accounting standards, cumulative translation
        adjustments are included in accumulated other comprehensive income.
        As a result, the Company's cumulative translation adjustment at
        December 31, 2006 and June 30, 2007 of $6.5 million has been
        reclassified to accumulated other comprehensive income in
        shareholders' equity.

    (c) Accounting policies not yet adopted

        Two new Canadian accounting standards have been issued which will
        require additional disclosure in the Company's financial statements
        commencing January 1, 2008, about the Company's financial instruments
        as well as its capital and how it is managed.

    2.  Operations and commitments:

        First Calgary currently has the rights to appraise and develop
        Ledjmet Block 405b (Block 405b) in Algeria. The Company's rights and
        obligations on Block 405b are set out in a Production Sharing
        Contract (PSC) with Sonatrach, the national oil company of Algeria.
        The nature of current operations and the terms or commitments under
        the PSC are summarised as follows.

        The five year exploration period of the PSC ended on December 26,
        2006. All exploration work commitments under the PSC were completed.

        FCP has retained two main acreage parcels for further appraisal and
        potential development, the MLE field and the Central Area Field
        Complex (CAFC).

        In February 2007, First Calgary received approval from the Algerian
        regulatory authority ALNAFT of the Development Plan for the MLE oil
        and gas field. The total gross cost of the MLE development is
        currently estimated at $1.0 - $1.3 billion, and will be mainly
        incurred in 2008 and 2009. The costs will be funded 75% by FCP and
        25% by Sonatrach. The total project cost estimate will be refined
        during 2007 as engineering and design plans are completed. In
        addition to the development costs, FCP has obligations to Sonatrach
        for the MLE access fee and annual training bonuses. The MLE access
        fee is compensation for the right to develop the MLE reserves
        discovered by Sonatrach with the MLE-1 well, and will result in FCP
        paying for the first $45 million of Sonatrach's development costs.
        The annual training bonus is $150 thousand, indexed for inflation,
        for the duration of the contract.

        Sonatrach agreed to extend the Block 405b exploration period for
        24 months commencing December 26, 2006 in order to complete the
        appraisal of the CAFC and to submit commerciality reports and apply
        for exploitation permits thereon. Following the appraisal of the
        CAFC, the remaining lands not subject to an exploitation permit will
        be returned to the government.

        First Calgary has committed the commercialisation of its revenue
        interest in the natural gas production on Block 405b to Sonatrach
        through a long term take or pay gas marketing agreement signed in
        November 2006. Pursuant to the agreement, Sonatrach will market the
        total natural gas production from Block 405b using a price formula
        linked to the price of European oil products. During the exploitation
        period, the PSC allocates hydrocarbon production between FCP,
        Sonatrach and the Algerian State in accordance with a sliding scale
        formula based on such factors as production levels, product prices,
        project investments and rates of inflation. Pursuant to the formula,
        the Company's annual share of production may range from 27.72 to
        8.16 percent. All Algerian state royalties and income taxes are paid
        by Sonatrach from its share of hydrocarbon production, except the new
        Windfall Profits Tax. In 2006 the Algerian government announced a new
        Windfall Profits Tax. Having studied the detailed legislation, FCP is
        of the view that the Windfall Profits Tax will apply to its share of
        liquids production, but not gas revenue. Exploitation periods for
        each commercial oil and natural gas discovery are 25 and 30 years,
        respectively.

        The development of the Block 405b reserves through to commercial
        production will require additional funding in the form of debt,
        equity and quasi equity, joint ventures or some combination thereof.

    3.  Capital stock:

        (a) Issued share capital:

                                                    Number of
                                                      Shares         Amount
        ---------------------------------------------------------------------
        Common shares:
          Balance, December 31, 2006               223,686,330    $  631,933
          Issued on public offering (i)             30,000,000       135,671
          Issued on exercise of employee stock
           options                                     732,700         1,281
          Transfer from contributed surplus                  -           687
          Issue costs                                        -        (6,549)
        ---------------------------------------------------------------------
          Balance, June 30, 2007                   254,419,030    $  763,023
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

          (i) On April 24, 2007 the Company issued 30,000,000 common shares
              for gross proceeds of $135.7 million at a price of C$5.08 per
              common share. The issue costs were $6.5 million.

        (b) Employee stock options:

            The Company has up to 10% of its issued and outstanding common
            shares available for issuance pursuant to its Stock Option Plan.
            Stock options granted under the plan have a term of five years
            and vesting terms are determined at the discretion of the Board,
            ranging between two and three years. The exercise price of each
            option is equal to the closing market price of the shares on the
            date preceding the date of the grant. The following table
            summarises the changes in stock options outstanding during the
            six months ended June 30, 2007:

                                                                    Weighted
                                                                       Avg.
                                                     Number of      Exercise
                                                      Options         Price
        ---------------------------------------------------------------------
        Outstanding, December 31, 2006               9,135,600        C$5.98
        Granted                                      4,050,000          5.19
        Exercised                                     (732,700)         1.92
        Forfeited                                     (384,999)         7.49
        ---------------------------------------------------------------------
        Outstanding, June 30, 2007                  12,067,901        C$5.91
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
            The following table summarises information about the options
            outstanding and exercisable at June 30, 2007:

                               Options Outstanding        Options Exercisable
                               -------------------        -------------------
                                     Weighted
                                     Average    Weighted             Weighted
                                    Remaining    Average              Average
           Range of                Contractual  Exercise             Exercise
        Exercise Price    Options  Life (years)   Price     Options    Price
        ---------------------------------------------------------------------
        C$ 1.25 - 1.25     200,000   0.2 years   C$1.25     200,000   C$1.25
        C$ 2.36 - 2.60     445,000   0.6 years     2.59     445,000     2.59
        C$ 4.72 - 4.72   2,117,500   1.3 years     4.72   2,117,500     4.72
        C$ 5.08 - 6.39   7,004,067   4.2 years     5.65   2,111,399     6.27
        C$ 7.22 - 8.59   1,044,000   3.0 years     7.57     514,002     7.71
        C$ 8.65 -10.50   1,008,334   3.7 years     9.41     423,338     9.42
        C$11.10 -15.77     249,000   2.6 years    11.96     199,000    12.08
        ---------------------------------------------------------------------
                        12,067,901   3.3 years   C$5.91   6,010,239   C$5.82
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        (c) Stock-based compensation expense:

            For the six months ended June 30, 2007, the Company recorded
            $3.2 million (2006 - $3.2 million) of stock-based compensation
            expense with a corresponding increase in contributed surplus
            (three months ended June 30, 2007 - $2.1 million; 2006 -
            $1.6 million). Of the total stock-based compensation expense, the
            Company has capitalised $1.3 million and $2.1 million for the
            three and six month periods ended June 30, 2007 (2006 -
            $0.9 million and $1.6 million respectively).

            The fair value of the options granted in the three months ended
            June 30, 2007 was estimated to be C$2.44 (2006 - C$5.45) per
            option and was determined using the Black-Scholes option pricing
            model with the following assumptions: expected volatility of
            59 percent (2006 - 64 percent), risk-free interest rate of
            3 percent (2006 - 4 percent) and expected lives of 4 years (2006
            - 4 years).

            The fair value of the options granted in the six months ended
            June 30, 2007 was estimated to be C$2.49 (2006 - C$4.79) per
            option and was determined using the Black-Scholes option pricing
            model with the following assumptions: expected volatility of
            59 percent (2006 - 65 percent), risk-free interest rate of
            3 percent (2006 - 4 percent) and expected lives of 4 years (2006
            - 4 years).

        (d) Contributed surplus:

            The changes in the contributed surplus balance are as follows:
        ---------------------------------------------------------------------
        Balance, December 31, 2006                                $   19,186
        Options granted                                                3,155
        Options exercised                                               (687)
        ---------------------------------------------------------------------
        Balance March 31, 2007                                    $   21,654
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        (e) Per share amounts:

            The income (loss) per share is based on the weighted average
            shares outstanding for the period. The weighted average shares
            outstanding for the three and six month period ended June 30,
            2007 were 246,479,389 and 235,214,160 respectively (2006 -
            218,985,821 and 211,045,789).

    4.  Segmented information:

        The Company's activities are conducted in two geographic segments:
        Canada and Algeria. All activities relate to exploration and
        development of petroleum and natural gas in Algeria.

                                                 Canada    Algeria    Total
        ---------------------------------------------------------------------
        Three months ended June 30
          Capital expenditures
            2007                                $    404  $ 36,742  $ 37,146
            2006                                $    148  $ 40,002  $ 40,150


                                                 Canada    Algeria    Total
        ---------------------------------------------------------------------
        Six months ended June 30
          Capital expenditures
            2007                                $    573  $ 86,570  $ 87,143
            2006                                $    182  $ 74,202  $ 74,384

          Total Assets
            2007                                $146,293  $629,574  $775,867
            2006                                $191,610  $450,328  $641,938
    





For further information:

For further information: First Calgary Petroleums Ltd.: Richard G.
Anderson, President and CEO, Tel: (403) 264-6697; John van der Welle, Finance
Director and CFO, Tel: +44 (0) 203 159 4010; Other contacts: David Nabarro,
Nabarro Wells & Co. Limited, Tel + 44 (0) 207 710 7400; James Henderson,
Pelham Public Relations, Tel: +44 (0) 207 743 6673; Carina Corbett, 4C -
Burvale Limited, Tel: +44 (0) 207 559 6710

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FIRST CALGARY PETROLEUMS LTD.

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