Great Plains' 2007 Activities Build Solid Platform for Growth in 2008


    CALGARY, March 25 /CNW/ - Great Plains Exploration Inc. (TSX - GPX)
(Great Plains) is pleased to announce its financial and operational results
for the three months and year ended December 31, 2007.

    Over the last year and into the first quarter of 2008, Great Plains has
achieved several key milestones:

        -  Discovered two significant new light oil pools; the first at
           Crossfire within the Nisku formation and the second at Morinville
           targeting the Devonian/Leduc formation. One additional smaller oil
           pool was also discovered at Morinville, while four new pools were
           successfully drilled at Randell. While the timing of the Crossfire
           and Morinville discoveries precluded them from having a material
           impact on year-end reserves or production, these projects are
           expected to add significant future value to the Company.

        -  Expanded the Company's presence in its core areas through an
           increase in both its land position and in the volume of assets
           under the Company's control as operator. At Crossfire, a
           200 square kilometer 3D seismic program identified nine Nisku oil
           prospects which subsequently led to an increase in the Company's
           land base to over 38 sections. At Randell, Great Plains purchased
           additional light oil assets which included approximately 200 boe/d
           of production, 388 mbbls proved plus probable reserves, upgraded
           facilities and land.

        -  Executed on its corporate strategy of growth through acquisitions
           with the announced take over of RedStar Oil and Gas. This
           transaction, which is expected to be completed in May, brings
           1,000 boe/d of additional natural gas production, improves the
           Company's balance sheet to enhance financial flexibility and
           diversifies Great Plains' operations into northeast British

    Over the last 15 months, Great Plains has successfully focused its efforts
in areas which can generate the best returns in the current business
environment and provide the most upside to its shareholders. These efforts
have strengthened the Company's asset base and maintained the strong financial
position necessary to support the growth of Great Plains in 2008.

    The operational and financial highlights for 2007 are as follows:

        -  Produced an average of 1,184 boe/d which reflected non-core asset
           dispositions combined with additions from new drilling. Upon
           closing of the RedStar transaction, production is expected to be
           approximately 2,200 boe/d.

        -  Invested a total of $21 million (excluding acquisitions,
           dispositions and capitalized G&A) on the Company's capital

           -  $12.9 million spent on drilling and completing, tie-in or
              abandoning 22 wells (9.22 net) comprising of 10 (3.96 net)
              oil wells, 4 (1.82 net) gas wells, 5 (2.19 net) suspended and
              3 (1.25 net) dry and abandoned.

           -  $3.7 million invested on land and seismic of which 88% was
              directed to new projects at Pembina/Crossfire.

           -  $4.4 million invested in equipment and facilities of which 78%
              was spent at Randell.

        -  Streamlined asset base by continued consolidation of interests in
           oil-focused core projects at Pembina and Randell while disposing
           of non-core assets comprising 398,000 boe of proved plus probable
           reserves and approximately 200 boe/d of production for total
           proceeds of $8.6 million.

    Reserves (evaluated by GLJ based on forecast prices and costs)
        -  Total proved reserves 2.34 mmboe, total proved plus probable
           reserves of 4.01 mmboe, comprised of 57% oil and NGLs and
           43% natural gas.

        -  Net present value of total proved plus probable reserves
           discounted at 10% before income taxes of $85.2 million based on
           price deck with 2008 forecast at U.S. $92.00 WTI and CDN $6.75
           AECO spot.

        -  Year-end net asset value (NAV) less debt of $1.73 per share
           (based on P+P, PV10), with land independently valued at
           $17.7 million.

        -  Cash flow per boe increased 93 percent to $25.81 for the fourth
           quarter compared to the same period in the prior year as a result
           of increased commodity prices and a significant reduction in
           general and administrative costs on a per unit basis.

        -  Cash flow of $9.1 million, ($0.20 per share) for the year; cash
           flow of $2.6 million ($0.05 per share) for the fourth quarter.

        -  Operating netbacks increased 68 percent to $35.19 per boe for the
           fourth quarter compared to the same period in 2006 due to the
           increased weighting of higher priced oil production and reduced
           operating costs.

        -  Oil and gas sales of $24.6 million, only 10 percent lower than
           2006 due to the increased oil weighting of Great Plains'
           production base which offset the effects of the reduced sales

        -  Financial flexibility provided by $28 million revolving demand
           credit facility (drawn by $18.4 million at year-end) and an
           available $14 million acquisition line, with additional capacity
           expected from combination with RedStar.

        -  Tax pools of $62 million.

    President's Message

    2007 Year In Review
    2007 turned out to be a very challenging year for junior producers. The
combination of new rules for royalty trust taxation, weak gas prices and
proposed Alberta royalty changes proved to be too much for most investors to
bear. As a consequence, the junior energy sector was left marooned in a sea of
indifference. Lacking reasonable assurance that either gas prices or equity
markets would recover by year-end 2007, we chose to take a very cautious
approach to capital spending and focused on a limited number of projects while
maintaining balance sheet integrity. We continued our program of non-core
asset dispositions which provided a non-dilutive source of funds for
investment in core projects. A total of approximately 200 boe/d of scattered
non-core assets with little or no upside were sold for proceeds of
$8.6 million. In October, we purchased an additional 50% interest in our
operated light oil project at Randell for $8.25 million. This in turn allowed
us to leverage our 3D seismic data base, undeveloped land base and facilities
by promoting a new party in this winter's drilling program. Using outside
sources of capital not only mitigated our exploration risk but minimized
dilution in an environment where the cost of capital was and remains
    Great Plains spent $21 million (excluding capitalized G&A) on capital
projects compared to a planned $25 million program for 2007 and $39.9 million
in 2006. A total of $17.2 million or 82% of 2007 expenditure was directed
toward Pembina/Crossfire and Randell. We found a total of 577,000 boe (P+P)
reserves as per our year-end independent engineering report which when divided
back into our total 2007 capital expenditure number, yields an unsatisfactory
finding cost of $36.51 per boe. However, land, seismic and facilities
accounted for almost 40% of total capital spending for 2007. These investments
in long-term core areas are already starting to pay dividends in 2008 as we
amortize prior year costs against 2008 drilling activity. Randell is a prime
example where 2007 expenditures of $9.5 million included $3.4 million for
facilities. Thus far, our total costs for the 2008 Randell program are less
than $3.0 million which yields substantially better economics. Similarly, at
Pembina/Crossfire, our $3.3 million of investment in land and seismic in 2007
has resulted in multiple locations and three discoveries including a
significant Nisku oil discovery which greatly reduces our risk in drilling
future locations.
    One of our stated goals for 2007 was to tighten our operating focus
through an increased level of ownership in core areas, as well as increasing
our participation in operated programs or alternatively, participating only in
projects where the Great Plains team can have meaningful technical input and
some degree of budgetary control. Our average working interest for drilling
has increased year-over-year from less than 30% to 42%, while 60% of 2007
drilling, completion, equipping and facilities expenses were on projects
operated by Great Plains. The ability to reduce expenses and control the
timing and allocation of capital was essential in the challenging business
environment we faced last year.

    Current Operations
    Great Plains got off to an early start with its $19 million 2008 program.
In January, we announced that we had participated in the discovery of a new
light oil pool at 11-12-51-05W5 at Crossfire. This well encountered a highly
porous dolomite Nisku reef with a hydrocarbon column of 10.5 metres. Rates as
high as 1,400 boe/d were observed during testing, along with a much lower
H(2)S content and a lower gas-oil ratio than typically observed in wells
further southwest on the Nisku trend. Besides the obvious importance to Great
Plains of a discovery of this caliber, there are some other important points
which can be made from this. Firstly, we have now proven that there is a
significant extension of the Nisku Fairway and that hydrocarbons and required
reservoir conditions exist at least nine km from previous discoveries.
Secondly, we can comfortably reduce our assessment of risk on Nisku locations
previously identified, as these targets lie in between our 11-12 discovery and
a well at 13-2-50-6W5M which is operated by our joint venture partner and is
on production at over 2,000 boe/d. One of our planned locations for 2008 is
located approximately 0.7 km updip of the 13-2 well. Third, our 3D seismic
interpretation is valid and we can now identify additional targets and add
them to the 15 locations already in inventory. Fourth, the lower gas-oil ratio
and H(2)S content observed in the 11-12 well should expedite the well
licensing process for future locations as the risk of a critical sour gas
release is materially reduced. Lastly, we believe we may have identified a new
uphole zone with light oil potential which we intend to evaluate this year.
    Generally speaking, we are seeing a sharp increase in activity planned by
industry in the general Crossfire/Tomahawk/Highvale area, which includes the
planned construction of new facilities and pipeline gathering systems. This
will not only expedite the commencement of production from 11-12, but should
allow the tie-in of our previously drilled well at 15-7-51-6W5 which we
believe could add 200 to 250 boe/d of net production to Great Plains.
Additionally, Great Plains has a 25% interest in a well in the Tomahawk area
which was drilled to the base of the Wabamun formation and is awaiting a
license for deepening to the Nisku. This well is thought to have similar
potential to other Nisku targets which average 1,000 boe/d and one mmbbls per
well and upon success, could be easily tied-in to the proposed gathering
system. Potential future reserve and production additions from this well
should be very inexpensive given the amount of capital spent in prior years.
    Great Plains has continued to execute on its drive towards seeking out
uphole oil and gas targets in the Nordegg, Rock Creek, Ellerslie and
Glauconite formations in the Pembina/Crossfire area. Great Plains drilled four
wells targeting these zones at Pembina in late 2007. Two wells are in the
tie-in phase, the third well is awaiting further evaluation and the fourth
well has had one zone completed and is on hold until after spring break up for
an additional zone to be completed. Based on the successful results of the
first two wells, Great Plains has plans for up to six wells at Pembina in the
balance of the year with additional locations in inventory. In the Crossfire
area, Great Plains also has two locations targeting Ellerslie light oil
planned in 2008 on recently acquired 100% lands.
    Morinville has emerged as a new, operated, core project for Great Plains.
Our interest in this area stems from the existence of neighboring pools which
have produced as much as 1.7 mmbbls. Consistent with our exploration strategy
of using 3D seismic to help us generate light oil prospects, our technical
team had initial success in finding a 330,000 bbl Leduc oil pool at
1-30-55-25W4M. This well was put on an extended production test prior to being
tied-in in February of 2008. The 1-30 well is now on stream at a maximum
allowable rate of 50 bopd. Following this initial encouragement, we completed
another 3D program which identified a much larger prospect which was
subsequently drilled late in 2007 and tested in 2008. The well at
10-6-56-25W4M tested oil at a rate up to 600 bopd from an estimated eight
metres of pay. Pipeline operations are commencing immediately and we expect to
have this well on stream at a maximum allowable rate of 135 bopd (50% W.I.) by
April 2008. We are now licensing a step-out location with additional
development to follow. We are also licensing an additional location to test
another feature which our technical team believes to be equally prospective.
The price of oil combined with the modest cost of drilling in this area yields
superior risked returns from a project with good growth potential for 2008.
    At Randell this winter Great Plains entered into an agreement with an
industry competitor to share proprietary seismic data in return for the right
to participate in successful wells via a 50% back-in at casing point. This
agreement allowed Great Plains to continue to participate in the upside
potential of the area and mitigated the drilling risk. Four wells were drilled
under the agreement; two discovery wells, both light oil, which are now
on-stream with initial combined production of 350 bopd (50% W.I.) and two
other wells which Great Plains did not take the option to participate in that
were dry and abandoned. In addition, Great Plains drilled two wells in its own
interest, one of which was a dry hole and the other is currently being
completed. Great Plains continues to hold an inventory in excess of
12 locations which it will be high-grading in preparation for next year's
drilling program as Randell is a winter only access area. Drilling costs at
Randell have dropped from an average of $1.1 million per well in 2007 to
$730,000 per well for 2008. Opportunities continue to exist for the
acquisition of additional area interests to consolidate operations and reduce

    Acquisition of RedStar
    On March 6th, 2008 Great Plains entered into an agreement to acquire the
issued and outstanding shares of RedStar Oil and Gas Inc. The RedStar
transaction was specifically designed to address the following issues;
firstly, junior companies in the current environment must work toward
achieving a greater critical mass to reduce overhead costs, increase investor
awareness and ultimately reduce the cost of capital; secondly, balance sheet
strength is essential in a period where capital markets are unstable and
potentially difficult to access; third, outside of normal seasonal volatility,
the future for gas prices looks considerably brighter than at any time over
the last 18 months; fourth, oil-weighted acquisitions are considerably more
expensive relative to gas-weighted acquisitions; fifth, a move into North East
British Columbia will be a hedge against potential negative effects of the
proposed changes to Alberta royalties; and finally, RedStar provides an
excellent opportunity to acquire a highly prospective core area with
operatorship, with high-working interest, access to infrastructure, and an
adequate land base to grow from.

    Upon completion of the transaction, Great Plains will have the following

        -  Average production rate of approximately 2,200 boe/d; 70%
        -  Expected annualized cash flow of $19 million based upon commodity
           prices of U.S. $85.00 per bbl WTI and CDN $7.00 per mcf AECO.
        -  300,000 net acre land base from which to explore and develop; over
           70 drilling locations in inventory.
        -  A balanced and diversified capital expenditure program of shallow
           opportunities in West Central Alberta and a new focus area in
           North East British Columbia.
        -  Strong balance sheet with 0.7 debt to cash flow and improved
           financial flexibility.

    This transaction is expected to be finalized by May 9th, 2008. The
Company's technical team is in the process of evaluating and prioritizing the
combined prospect inventory. Management has a preliminary budget of
$26 million for the combined entity planned for 2008 which would include 26
drilling locations. In addition, Great Plains may divest non-core assets with
production of approximately 100 boe/d and expects to monetize RedStar's large
proprietary 3D seismic database for up to $18 million.

    The Great Plains team is excited and optimistic about our direction and
prospects for 2008. Our hard work over the last 18 months has successfully
positioned Great Plains back into growth-mode in an anticipated environment of
high-quality acquisition opportunities coupled with increasing gas prices. Our
team will continue to seek out opportunities to increase its foothold in its
current core areas. Recent discoveries demonstrate that the Company's drilling
program is on track with results providing encouragement for future
development plans. Great Plains has a large land position and prospect
inventory and management will continue to balance its activities to ensure it
maintains its financial flexibility. The financial, operational and technical
strength of Great Plains should allow it to take advantage of further
corporate acquisitions in the coming year while our technical team continues
to seek out and evaluate prospects that would add to the long-term value of
the Company. In summary, Great Plains has built a solid platform from which to
    In closing I would like to acknowledge the support of our shareholders as
well as the contribution of all our employees and Board of Directors for the
wealth of talent, enthusiasm and commitment they bring to our Company. I look
forward to welcoming our new RedStar shareholders upon a successful conclusion
to our transaction.

    On behalf of the Board of Directors,

    (Signed)"Stephen P. Gibson"

    Stephen P. Gibson
    President and CEO
    March 24, 2008


    ($000s       Three    Three             Three
     except     Months   Months            Months     Year     Year
     per unit    Ended    Ended             Ended    Ended    Ended
     amounts)   Dec 31   Dec 31        %  Sept 30   Dec 31   Dec 31        %
                  2007     2006   Change     2007     2007     2006   Change
    Oil and gas
     sales       5,979    5,648        6    5,261   24,593   27,473      (10)
    Cash flow    2,562    1,556       65    5,261    9,121   11,554      (21)
      Per share
       (basic)    0.05     0.04       25     0.04     0.20     0.31      (35)
     (loss)      1,045  (28,432)     n/a   (1,353)  (1,778) (28,635)     (94)
      Per share
       diluted)   0.02    (0.73)     n/a    (0.03)   (0.04)   (0.76)     (95)
     tures, net
     tions       6,940    5,544       25    2,227   22,028   18,557       19
    Bank debt
     deficit    15,091   13,911        8   12,105   15,091   13,911        8
     basic      50,554   40,958       23   48,264   50,554   40,958       23

      Crude oil
       (bbls/d)    540      376       44      415      520      451       15
       (bbls/d)     31       55      (44)      38       41       74      (45)
       (mcf/d)   3,051    5,002      (39)   3,460    3,735    5,692      (34)
       (boe/d)   1,079    1,265      (15)   1,030    1,184    1,474      (20)

      Crude oil
       ($/bbl)   75.07    58.17       29    76.45    71.03    69.19        3
       ($/bbl)   69.01    57.78       19    53.98    63.85    65.33       (2)
       ($/mcf)    7.32     7.26        1     6.77     7.44     6.89        8
       ($/boe)   60.23    48.54       24    55.53    56.91    51.06       11

      Oil and
       sales     60.23    48.54       24    55.53    56.91    51.06       11
       net of
       ARTC      (9.71)   (8.40)      16    (8.56)   (9.40)   (9.93)      (5)
       costs    (14.53)  (16.15)     (10)  (14.69)  (15.01)  (12.44)      21
       tation    (1.11)   (1.18)      (6)   (1.65)   (1.21)   (0.98)      23
       tures      0.31    (1.84)     n/a    (0.33)   (1.39)   (0.59)     136
       netback   35.19    20.97       68    30.30    29.90    27.12       10
       and other
       income     0.57     1.17      (51)    1.64     0.98     1.66      (41)
      General and
       tive      (7.26)   (7.26)       0   (10.56)   (7.89)   (5.11)      54
      Interest   (2.81)   (1.51)      86    (2.59)   (1.92)   (2.24)     (14)
       (expense)  0.12        -      n/a     0.35    (0.04)    0.05      n/a
      Cash flow
       netback   25.81    13.37       93    19.14    21.04    21.48       (2)

    (The complete annual financial statements and corresponding MD&A
    documents are available on SEDAR at and on the Great Plains
    website at

    Investors should note that boes may be misleading, particularly if used
in isolation. A boe conversion rate of 6 Mcf: 1bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.

    Advisory Regarding Forward-Looking Statements

    This press release contains forward-looking statements which include, but
are not limited to: operations plans and outlook, expectations, opinions,
forecasts, projections, guidance or other statements that are not statements
of fact. Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it cannot give any assurance that
such expectations will prove to be correct. Results of the Company may be
affected by a variety of variables and risks associated with oil and gas
exploration, production and transportation, such as loss of market, volatility
of oil and gas prices, currency fluctuations, imprecision of reserve
estimates, environmental risks, competition from other producers, ability to
access sufficient debt and equity capital from internal and external sources,
ability to replace and expand oil and gas reserves, ability to generate
sufficient cash flow from operations to meet its current and future
obligations, and risks associated with existing and potential future lawsuits
and regulatory actions made against the Company; as a consequence, actual
results could differ materially from those anticipated or implied in the
forward-looking statements.
    The Company's forward-looking statements are expressly qualified in their
entirety by this cautionary statement and are made as of the date of this new
release. Unless otherwise required by applicable securities laws, the Company
does not intend nor does it undertake any obligation to update or review any
forward-looking statements to reflect subsequent information, event, results
or circumstances or otherwise.

    %SEDAR: 00020740E

For further information:

For further information: Great Plains Exploration Inc., Stephen P.
Gibson, President & CEO, Sean Bovingdon, VP Finance & CFO, Tel: (403)
262-9620, Fax: (403) 262-9622, Website:, Email:

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