Great Plains Reports Second Quarter 2007 Financial and Operational Results



    CALGARY, Aug. 13 /CNW/ - Great Plains Exploration Inc. (TSX - GPX) (Great
Plains) is pleased to announce its financial and operational results for the
three and six months ended June 30, 2007.

    The highlights for the second quarter 2007 are as follows:

    
    Operations
    ----------
    -   Increased prospect inventory at Pembina/Crossfire with six Nisku
        locations scheduled for drilling in 2007 with 12 remaining in
        inventory for 2008; additionally, 8 to 13 new targets have been
        identified in stacked pay intervals in the Nordegg, Rock Creek and
        Ellerslie formations

    -   Production increased seven percent to 1,359 boe/d from 1,272 boe/d in
        the prior quarter as a result of behind-pipe production from Randell
        being placed on-stream

    -   Oil production increased 20 percent over the quarter and now accounts
        for 45 percent of the Company's total production; a result of Great
        Plains' deliberate shift in capital allocation towards oil weighted
        projects with the highest potential to create value

    -   Operating netbacks increased 38 percent to $30.84 from $22.41 in the
        first quarter, due to increased oil prices and decreased operating
        expenses

    Financial
    ---------
    -   Cash flow increased 86 percent to $3.1 million ($0.06 per share) from
        $1.7 million ($0.04) during the first quarter, due to increased oil
        volumes and prices, and reduced general and administrative expenses

    -   Second quarter debt and working capital deficit reduced 31 percent to
        $12.4 million from $17.8 million at the end of the first quarter; the
        Company has a $26 million revolving credit facility and a $14 million
        acquisition line

    -   The Company closed on the disposition of certain, mainly gas
        properties, for $3.3 million in the quarter, representing
        approximately 70 boe/d of production. A further $1.7 million in asset
        sales, representing 30 boe/d which was to close during the quarter,
        is expected to be finalized during the third quarter
    

    Outlook
    -------
    During the second quarter, the Great Plains technical team focused its
attention on actively licensing drilling locations, acquiring land, generating
new prospects and evaluating seismic data for further drilling locations. The
industry was faced with an unusually long spring break-up, with wet field
conditions delaying drilling and tie-in activity. Subsequent to the quarter,
Great Plains drilled an exploration well in the Garrington area targeting
liquids rich gas in the Elkton formation. This well has been cased as a gas
well and is currently being evaluated. Also subsequent to the quarter, Great
Plains received approval to production test its Leduc oil discovery in the
Morinville area. This well, which previously tested at 200 bopd, will be
produced for thirty days to establish a stabilized rate which is anticipated
to be approximately 100 bopd. Further 3D seismic evaluation of this play type
is contemplated in the remainder of 2007.
    For the second half of the year, Great Plains has planned capital
expenditures of $9.5 million; $6.0 million at Pembina/Crossfire; $1.5 million
at Spirit River, $0.8 million at Morinville and the balance on facilities and
other areas. This program has the potential, on a risked basis, to add
275 boe/d in 2007, plus 400 boe/d behind pipe for 2008 and 1.2 mmboe of
reserves. Great Plains' rapidly increasing prospect inventory at
Pembina/Crossfire may require a shift in budget allocation from other areas
based upon management's continual drive to direct operating focus on those
areas which offer the best returns in the current commodity price environment.
    At Pembina, Great Plains is currently awaiting regulatory approvals and
facility upgrades to bring on its significant development well in the Nisku HH
pool. The well, which should add approximately 100 to 150 boe/d, is expected
to be on-stream in the coming months. Our joint venture partner is currently
engaged in the licensing process for two exploration wells out of a current
inventory of 11 Nisku oil locations. Additionally, the Great Plains technical
team has focused its activities on increasing its prospect inventory in this
area with 8 to 13 new targets identified in the second quarter, in stacked pay
intervals in the Nordegg, Rock Creek, and Ellerslie formations.
    At Crossfire, Great Plains and its joint venture partner are also
proceeding with the licensing of four exploration wells to evaluate Nisku oil
targets. Ongoing evaluation of our 200 km2 3D seismic program, which was
completed in the first quarter, has revealed another three firm Nisku
locations plus development potential on exploratory locations currently being
licensed. Facilities in this area are currently being developed with Great
Plains' industry partner having recently received regulatory approval for the
construction of its oil production facility. The development of these
facilities in advance of exploration activities will expedite on-stream times
for all future production in the Crossfire area.
    In summary, at Pembina/Crossfire, Great Plains has 18 Nisku locations of
which six are scheduled for drilling during the balance of the year. Based on
area statistics over the past several years, these wells are expected to
produce at an average rate of 1,000 bopd with target sizes of approximately
1.0 MMbbls per well and 3.0 to 5.0 MMbbls per pool with working interests
ranging from 25% to 46%. Area statistics also indicate success rates of
approximately 50% based on the use of 3D seismic. Our new and growing
inventory of medium depth targets in the Nordegg, Rock Creek and Ellerslie
formations provides a complimentary growth strategy for Great Plains in the
general Pembina area.
    Great Plains continues to evaluate corporate transactions in the context
of weakening gas prices and the continual tightening of debt and equity
markets. The marked decline in industry activity levels and softening service
costs are enhancing economics which are beginning to generate new
opportunities for land acquisitions as well as strategic production purchases.
Great Plains' management and directors believe that our restructuring efforts
over the last year have put the Company in a good position to take advantage
of the expanding range of opportunities.

    On behalf of the Board of Directors,

    signed "Stephen Gibson"

    Stephen P. Gibson
    President and CEO
    August 13, 2007


    
    FINANCIAL & OPERATIONAL HIGHLIGHTS

    -------------------------------------------------------------------------
                               Three     Three               Three
    ($000s except per         Months    Months              Months
     unit amounts)             Ended     Ended               Ended
                             June 30  March 31       %     June 30       %
                                2007      2007    Change      2006    Change
    -------------------------------------------------------------------------
    Oil and gas sales          7,063     6,246        13     7,065         0
    Cash flow                  3,085     1,662        86     3,211        (4)
      Per share (basic)         0.06      0.04        50      0.09       (33)
    Net earnings (loss)         (256)   (1,214)      (79)      609       n/a
      Per share (basic
       and diluted)            (0.01)    (0.03)      (67)     0.02       n/a
    Capital expenditures, net
     of dispositions          (2,040)   15,024       n/a     9,560       n/a
    Bank debt and working
     capital deficit          12,378    17,819       (31)   27,726       (55)
    Common shares outstand.
     (000s) basic             47,625    47,625         0    37,208        28
    -------------------------------------------------------------------------

    Production
      Crude oil (bbls/d)         615       512        20       447        38
      NGLs (bbls/d)               45        52       (13)       79       (43)
      Natural gas (mcf/d)      4,196     4,248        (1)    6,431       (35)
    -------------------------------------------------------------------------
      Total (boe/d)            1,359     1,272         7     1,598       (15)

    Realizations
      Crude oil ($/bbl)        69.61     64.01         9     74.94        (7)
      NGLs ($/bbl)             59.51     66.57       (11)    60.04        (1)
      Natural gas ($/mcf)       7.66      7.80        (2)     6.13        25
    -------------------------------------------------------------------------
      Average ($/boe)          57.11     54.55         5     48.59        18

    Netbacks ($/boe)
      Oil and gas sales        57.11     54.55         5     48.59        18
      Royalties, net of ARTC   (8.69)   (10.58)      (18)    (9.31)       (7)
      Operating costs         (15.22)   (16.93)      (10)   (11.40)       34
      Transportation           (1.01)    (1.13)      (11)    (0.80)       26
      Asset retirement
       expenditures            (1.35)    (3.50)      (61)    (0.41)      229
    -------------------------------------------------------------------------
      Operating netback        30.84     22.41        38     26.67        16
      Processing and
       other income             1.95      1.59        23      1.37        42
      General and
       administrative          (5.72)    (8.56)      (33)    (3.35)       71
      Interest                 (1.61)    (0.93)       73     (2.95)      (45)
      Current taxes            (0.51)    (0.01)      n/a      0.34       n/a
    -------------------------------------------------------------------------
      Cash flow netback        24.94     14.51        72     22.08        13
    -------------------------------------------------------------------------
    

    Investors should note that boes may be misleading, particularly if used
in isolation. A boe conversion rate of 6 Mcf: 1 bbl 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.

    
                     MANAGEMENT'S DISCUSSION AND ANALYSIS
    

    The following Management's Discussion and Analysis ("MD&A") of financial
results as provided by the management of Great Plains Exploration Inc. ("Great
Plains" or the "Corporation") should be read in conjunction with the unaudited
interim financial statements and selected notes for the three and six month
periods ended June 30, 2007 and 2006 and the audited consolidated financial
statements and MD&A for the years ended December 31, 2006 and 2005. This
commentary is based on information available as at August 9, 2007.
    The following information has been prepared by management in accordance
with Canadian generally accepted accounting principles ("GAAP"). All financial
results are reported in Canadian dollars and production and reserve numbers
are stated before crown or lessor royalties. Natural gas reserves and volumes
are converted to barrels of oil equivalent (boe) on the basis of six thousand
cubic feet (mcf) of gas to one barrel (bbl) of oil. Included in the MD&A are
references to terms commonly used in the oil and gas industry such as cash
flow and cash flow per share. Cash flow as used in this report represents cash
flow from operating activities before changes in non-cash working capital. The
Corporation believes that cash flow represents an indicator of the
Corporation's performance. The Corporation also discloses cash flow per share,
where cash flow is divided by the weighted average number of common shares
outstanding. These terms are not defined by Canadian GAAP and therefore are
referred to as non-GAAP measures and therefore may not be comparable with the
calculation of similar measures for other companies.

    The information contained herein contains forward-looking statements and
assumptions, such as those relating to the results of operations and financial
condition, capital spending, financing sources, commodity prices and costs of
production. By their nature, forward-looking statements are subject to
numerous risks and uncertainties that could significantly affect anticipated
results in the future and, accordingly, actual results may differ materially
from those predicted. Readers are cautioned that the assumptions used in the
preparation of such information, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance should not
be placed on forward-looking statements.

    Great Plains Exploration Inc. is a Canadian-based company whose common
shares are traded on The Toronto Stock Exchange (TSX) under the symbol "GPX".
Additional information relating to the Corporation can be found on the SEDAR
website at www.sedar.com or on the Corporation's website at
www.greatplainsexp.com.

    Disclosure Controls

    Disclosure controls and procedures are designed to provide reasonable
assurance that all relevant information is gathered and reported on a timely
basis to senior management, so that appropriate decisions can be made
regarding public disclosure. As at the end of the period covered by this MD&A,
management evaluated the effectiveness of the Corporation's disclosure
controls and procedures as required by Canadian securities laws.
    Based on that evaluation, management has concluded that, as of the end of
the period covered by this MD&A, the disclosure controls and procedures,
subject to certain limitations indicated below, were effective to provide
reasonable assurance that information required to be disclosed in the
Corporation's annual filings and interim filings (as such terms are defined
under Multilateral Instrument 52-109 - Certification of Disclosure in Issuers'
Annual and Interim Filings) and other reports filed or submitted under
Canadian securities laws is recorded, processed, summarized and reported
within the time periods specified by those laws, and that material information
is accumulated and communicated to management as appropriate to allow timely
decisions regarding required disclosure.

    Internal Controls Over Financial Reporting

    The Chief Executive Officer and the Chief Financial Officer of Great
Plains are responsible for designing a system of internal controls over
financial reporting, or causing them to be designed under their supervision,
in order to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
reporting purposes in accordance with Canadian generally accepted accounting
principles.
    We have designed and implemented a system of internal controls over
financial reporting which we believe is effective for a company of our size.
During the review of the design of the Corporation's control system over
financial reporting it was noted that due to the limited number of staff at
Great Plains, there is an inherent weakness in the system of internal controls
due to our inability to achieve appropriate segregation of duties. The limited
number of staff may also result in weaknesses with respect to accounting for
complex and non-routine transactions due to a lack of technical resources, and
a weaknesses in controls governing our computer systems and applications
within the Corporation. While management of Great Plains has put in place
certain procedures to mitigate the risk of a material misstatement in the
Corporation's financial reporting, there is no assurance that this risk can be
reduced to less than a remote likelihood of a material misstatement.

    Corporate Vision, Core Businesses and Strategy

    Great Plains is an oil and gas company engaged in the exploration for,
and development and production of, oil and natural gas in Western Canada.
Great Plains was formed through the division of Eurogas Corporation under a
Plan of Arrangement dated April 5, 2004. The Corporation focuses on the
Western Canadian Sedimentary Basin and intends to pursue a strategy of growth
through corporate acquisitions and value creation from full-cycle exploration.

    Production

    For the three and six month periods ended June 30, 2007, production
volumes averaged 1,359 and 1,316 boe per day, compared to 1,598 and 1,590 boe
per day average in the same periods in 2006 (a 15 and 17 percent decrease,
respectively).

    
    -------------------------------------------------------------------------
                                                 For the
                                                   three
                                 For the three    months         For the six
                                  months ended     ended        months ended
                                       June 30  March 31             June 30
    -------------------------------------------------------------------------
                                2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Oil (bbls/d)                 615       447       512       564       488
    NGLs (bbls/d)                 45        79        52        49        77
    Natural Gas (mcf/d)        4,196     6,431     4,248     4,222     6,149
    -------------------------------------------------------------------------
    boe/d (6:1)                1,359     1,598     1,272     1,316     1,590
    -------------------------------------------------------------------------
    % natural gas production      51        67        56        53        64
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Crude oil and natural gas liquids sales volumes averaged 660 bbls/d for
the three month period ended June 30, 2007, a 25 percent increase over the
526 bbls/d for the same period in 2006 and an increase of 17 percent over the
three months ended March 31, 2007. The increased volumes were due to increased
production at Randell commencing in late March, 2007. The current quarter
reflects the full impact of the new production offset by continued natural
declines. It is anticipated that additional production will be added in
subsequent periods as reserves are tied-in at Morinville and Pembina.
    Natural gas sales volumes averaged 4,196 mcf/d during the three months
ended June 30, 2007 compared to 6,431 mcf/d for the same period of 2006, a
35 percent decrease, due to disposition of several properties representing
1,037 mcf/d that were undertaken during the past twelve months ended June 30,
2007, and the expected natural decline rate of 22 percent. There were also
continued natural declines as the Corporation has focused its exploration and
development activity on increasing its oil producing properties.

    
    Commodity Pricing
    -------------------------------------------------------------------------
                                                 For the
                                                   three
                                 For the three    months         For the six
                                  months ended     ended        months ended
                                       June 30  March 31             June 30
    -------------------------------------------------------------------------
                                2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Oil ($/bbl)                69.61     74.94     64.01     67.05     70.05
    NGLs ($/bbl)               59.51     60.04     66.57     60.84     61.49
    Natural Gas ($/mcf)         7.66      6.13      7.80      7.76      7.15
    -------------------------------------------------------------------------
    $/boe                      57.11     48.59     54.55     55.88     52.13
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Prices for the three month period ended June 30, 2007, increased by
18 percent over the comparable period in 2006. Oil was 7 percent lower, NGLs
were 1 percent lower and natural gas prices were 25 percent higher in the
second quarter of 2007. All petroleum products are sold to Canadian marketers
at spot reference prices based on US$ WTI for oil and Cdn$ AECO for natural
gas. Noting industry inventory levels and downward pressures on the natural
gas prices, during the current quarter, Great Plains entered into several
financial contracts to ensure cash flow protection against anticipated lower
natural gas prices. As at June 30th approximately 47 percent of the natural
gas production was protected by financial contracts through to March, 2008
with the lowest floor price being $7.00/GJ. Subsequent to the quarter end, the
Corporation entered into additional financial contracts for gas to extend the
price protection on 2,000 GJ/d from April, 2008 to December, 2008 with a floor
of $6.50/GJ and a ceiling of $8.00/GJ. Additionally, approximately 37 percent
of the oil is protected by financial contracts with an average swap price of
$US69.80/bbl for the balance of 2007.

    
    Oil and Gas Sales
    -------------------------------------------------------------------------
                                             For the
                                               three
                                              months
                    For the three months       ended      For the six months
                           ended June 30    March 31,          ended June 30
                        2007        2006        2007        2007        2006
    -------------------------------------------------------------------------
                   $000    %   $000    %   $000    %   $000    %   $000    %
    -------------------------------------------------------------------------
    Oil           3,894   55  3,049   43  2,951   47  6,843   51  6,186   41
    NGLs            243    3    431    6    312    5    534    4    862    6

    Natural Gas   2,926   41  3,585   51  2,983   48  5,933   45  7,957   53
    -------------------------------------------------------------------------
    Total         7,063  100  7,065  100  6,246  100 13,311  100 15,005  100
    -------------------------------------------------------------------------

    Oil and gas sales for second quarter of 2007 were $7.1 million,
coincidentally, unchanged from the same period in 2006 due to higher volumes
for oil being offset by lower volumes for natural gas and natural gas liquids.

    Royalties
    -------------------------------------------------------------------------
                                                 For the
                                                   three
                                 For the three    months         For the six
                                  months ended     ended        months ended
                                       June 30  March 31             June 30
    $000s                       2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Crown royalties              899     1,122       986     1,885     2,610
    Other                        185       354       226       411       804
    Alberta Royalty Tax Credit    (9)     (122)        -        (9)     (243)
    -------------------------------------------------------------------------
    Total                      1,075     1,354     1,212     2,287     3,171
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                 For the
                                                   three
                                 For the three    months         For the six
                                  months ended     ended        months ended
                                       June 30  March 31             June 30
    % of sales                  2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Crown royalties               13        16        16        14        17
    Other                          3         5         4         3         6
    Alberta Royalty Tax Credit     -        (2)        -         -        (2)
    -------------------------------------------------------------------------
    Total                         15        19        20        17        21
    -------------------------------------------------------------------------
    

    For the six month period ended June 30, 2007, total royalties were
$2.3 million, representing a decrease of 28 percent from the $3.2 million
incurred in 2006. As a percentage of sales, total royalty expense decreased to
17 percent in 2007 compared to 21 percent in 2006. The reduction in royalties
as a percentage of sales is primarily due to continued movement towards oil
production. The Corporation's oil properties are usually subject to a lower
Crown royalty rate, and the new oil production at Randell is subject to a
royalty holiday. The Alberta Royalty Tax Credit was discontinued effective
January 1, 2007, with any 2007 amounts being due to adjustments of prior year
claims.

    
    Processing and Other Income

    -------------------------------------------------------------------------
                                                 For the
                                                   three
                                 For the three    months         For the six
                                  months ended     ended        months ended
                                       June 30  March 31             June 30
    -------------------------------------------------------------------------
    (000s)                      2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Processing                   166       186       181       347       298
    Unrealized gain on
     financial instruments       341         -         -       341         -
    Other                         67        14         -        75        16
    -------------------------------------------------------------------------
    Total                        574       200       181       763       314
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    $/boe                       4.64      1.37      1.59      3.21      1.09
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Processing and other income for the three and six month periods ended June
30, 2007 were $574 thousand and $763 thousand ($4.64 and $3.17 per boe
respectively), compared to $200 thousand and $314 thousand ($1.37 and $1.09
per boe respectively) in the same periods of 2006. The increases are primarily
due to the mark to market adjustment on the Corporation's financial contracts.

    Operating Expenses and Transportation Costs

    -------------------------------------------------------------------------
                                             For the
                                               three
                        For the three months  months      For the six months
                               ended June 30   ended           ended June 30
                                         %  March 31                     %
                        2007    2006  Change    2007    2007    2006  Change
    -------------------------------------------------------------------------
    Operating
     expenses ($000)   1,882   1,657      14   1,938   3,820   2,837      35
    Less: Processing
     expenses ($000)     (51)    (36)     42     (25)    (76)    (72)      6
    -------------------------------------------------------------------------
    Production
     expenses ($000)   1,831   1,621      13   1,913   3,744   2,765      35
    Production
     expenses ($/boe)  14.81   11.15      33   16.71   15.72    9.61      64
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Transportation
     costs ($000)        126     116       8     129     254     237       7
    Transportation
     costs ($/boe)      1.01    0.80      27    1.13    1.07    0.82      30
    -------------------------------------------------------------------------
    

    Operating expenses for the three and six month periods ended June 30,
2007, were $1.88 million and $3.82 million ($15.22 and $16.04 per boe
respectively), compared with $1.66 million and $2.84 million ($11.40 and $9.86
per boe respectively) for the same period in 2006. The above amounts include
operating costs relating to a battery located at Pembina for which the
Corporation earns processing revenues. These processing costs for three and
six months ended June 30, 2007 were $51 thousand and $76 thousand ($0.41 and
$0.32 per boe, respectively) compared to $36 thousand and $72 thousand ($0.25
for both periods) for same periods in 2006.
    The increased production expense per boe from the prior year is primarily
due to increased water rates at Pembina and Spirit River with continued
natural declines that have yet to be replaced, both of which have resulted in
fixed costs being allocated over a smaller hydrocarbon base. To mitigate the
natural declines, compression has been added in the Athabasca, Spirit River,
and Watts Lake properties during the past year. In April, 2006 a battery in
the Randell area began operations to allow Great Plains to exploit the growth
potential of this area. However, access to the Randell area is restricted to
the winter months resulting in a limited time to conduct exploration and
development activities. The high operating costs for this battery were being
allocated over a small production base during the first three months of 2007.
As additional production commenced at Randell during late March, 2007, the
battery's operating costs are being allocated over a larger production base.
During the current quarter, certain high operating cost properties were also
disposed of. Both of these actions have resulted in a reduction of operating
expense per boe in the second quarter of 2007 as compared to the first quarter
of 2007. Plans for continued efficiencies are being implemented at Randell,
which in addition to additional production coming in from behind pipe at
Morinville and Pembina, are expected to result in further reductions in the
operating cost per boe through the balance of 2007.
    Transportation costs totalled $126 thousand and $254 thousand ($1.01 and
$1.07 per boe respectively), compared with $116 thousand and $237 thousand
($0.80 and $0.82 per boe respectively) for the same period in 2006.

    General & Administrative Expenses and Stock Based Compensation

    
    -------------------------------------------------------------------------
                                             For the
                                               three
                        For the three months  months      For the six months
                               ended June 30   ended           ended June 30
                                         %  March 31                     %
    $000s               2007    2006  Change    2007    2007    2006  Change
    -------------------------------------------------------------------------
    Gross costs        1,019     744      37   1,420   2,439   1,552      57
    Capitalized         (312)   (257)     21    (440)   (752)   (514)     46
    -------------------------------------------------------------------------
    Net Costs            707     487      45     980   1,687   1,038      63
    -------------------------------------------------------------------------

    Stock based
     compensation         77     295     (74)     97     174     600     (71)
    -------------------------------------------------------------------------
    $/boe               6.34    5.38      18    9.41    7.81    5.69      37
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    General and administrative costs (net of capitalization) averaged $5.72
per boe for the three months ended June 30, 2007, a decrease of 38 percent
from the $8.56 per boe incurred during the three month period ended March 31,
2007, and a 70 percent increase when compared to $3.35 per boe during the
second quarter of 2006. The year on year increase is primarily due to
increased staff costs during the current year due to the addition of technical
staff and lower partner recovery amounts as result of reduced capital activity
in the second quarter of 2007 as compared to the second quarter of 2006. There
have also been supplier price increases for many products and services over
last year. The reduction in expenses from the first quarter of 2007 reflects
mainly severance costs incurred in the first quarter.
    Stock based compensation of $77,000 was expensed for three month period
ended June 30, 2007 compared to $295,000 for the three months ended June 30,
2006. In addition stock based compensation of $402,000 has been capitalized
for the three months ended June 30, 2007. The decreased 2007 expense is due to
the cancellation of certain stock options for departed employees during the
current year as well as other stock options fully vesting and thus not being
subject to further expense as total stock based compensation expense is
amortized over the vesting period of the related stock options. Compensation
expense is based on the estimated fair value of the options on the grant date
in accordance with the fair value method of accounting for stock based
compensation.

    Interest Expense

    
    -------------------------------------------------------------------------
                                              For the
                                                three
                                               months
                       For the three months     ended     For the six months
                              ended June 30  March 31          ended June 30
                                         %                               %
    $000s               2007    2006  Change    2007    2007    2006  Change
    -------------------------------------------------------------------------
    Interest expense     200     430     (54)    106     306     676     (55)
    -------------------------------------------------------------------------
    $/boe               1.61    2.95     (45)   0.93    1.28    2.35     (45)
    -------------------------------------------------------------------------
    

    Interest expense for the three month period ended June 30, 2007, was
$200 thousand ($1.61 per boe) compared to $430 thousand ($2.95 per boe) for
the second quarter in 2006. The decrease is due to less reliance on the line
of credit such that interest charges were $180 thousand for the second quarter
2007 as compared to $350 thousand for the second quarter 2006. Also the
Corporation fully expended its obligations with respect to the November, 2006
flow through share issuance by March 31, 2007. This resulted in a lower flow
through share interest charge compared to the period ended March 31, 2006 when
there was a remaining flow through share obligation of $5.4 million relating
to a December, 2005 flow through share issuance. During the three months ended
June 30, 2007 the Corporation recorded $20 thousand for estimated flow through
share interest arising from an audit of the flow through share claims of a
predecessor corporation, Rock Creek Resources Ltd.

    Depletion, Depreciation and Accretion

    
    -------------------------------------------------------------------------
                                              For the
                                                three
                                               months
                       For the three months     ended     For the six months
                              ended June 30  March 31          ended June 30
                                         %                               %
    $000s               2007    2006  Change    2007    2007    2006  Change
    -------------------------------------------------------------------------
    Depletion,
     depreciation
     and accretion
     expense           3,830   3,897      (2)  3,726   7,556   7,623      (1)
    -------------------------------------------------------------------------
    $/boe              30.97   26.80      16   32.54   31.72   26.49      20
    -------------------------------------------------------------------------
    

    Depletion, depreciation and accretion expense has decreased to
$3.8 million from $3.9 million for the three month period ended June 30, 2007
compared to the same period in 2006. The increased expense on a per boe basis
reflects an aggressive capital program that commenced in 2006 and continues
into 2007 which has resulted in significant facilities' costs being incurred
which have no reserves associated with them in the depletion calculation. The
increased depletion, depreciation, and accretion for the second quarter of
2007 as compared to the first quarter of 2007 are due to additional sales of
approximately 9,000 boe in the second quarter.

    Taxes

    A current income tax provision of $63,000 was recorded by the Corporation
for the three month period ended June 30, 2007, compared to a recovery of
$50,000 during the same period of 2006. The current period income tax
provision consists of an estimated additional tax, interest, and penalties of
$55,000 arising from an income tax audit of a predecessor corporation, Rock
Creek Resources Ltd, and a provision of $8,000 relating to Saskatchewan
capital taxes.
    A future income tax recovery of $58,000 was recorded for the three month
period ended June 30, 2007, compared to a future income tax recovery of
$1,530,000 for the same period in 2006.
    Included in the future income tax liability is an amount of $2.47 million
that was recorded in the first quarter of 2007 in respect of renouncement of
Canadian Exploration Expense made relating to the flow-through shares issued
by the Corporation in November, 2006.
    Great Plains and its subsidiaries have combined tax pools of
approximately $51.4 million of which $5.4 million is available for deduction
against Alberta income only.

    Cash Flow

    Cash flow for the three month period ended June 30, 2007, totalled
$3.1 million ($0.06 per basic and diluted share). For the same three month
period ended June 30, 2006, cash flow was $3.2 million ($0.09 per basic and
diluted share) and it was $1.7 million ($0.04 per basic and diluted share) for
the first quarter of 2007.
    Cash flow totalled $24.94 per boe for the three month period ended
June 30, 2007, an improvement from the $20.63 per boe recorded for the same
period in 2006 and $14.51 per boe for the first quarter of 2007. The second
quarter of 2007 reflects the full benefit of new production from the
Corporation's winter drilling program. There was lower production in the first
quarter as natural declines and the impact of previous property dispositions
has not yet been replaced by new production. An offset to this new production
was the disposition of certain high operating cost properties with daily
production of 75 boe undertaken in April, 2007. Furthermore, in the first
quarter of 2007 the Corporation incurred certain one-time general and
administrative charges.

    
    -------------------------------------------------------------------------
                                                 For the
                                                   three
                                 For the three    months         For the six
                                  months ended     ended        months ended
                                       June 30  March 31             June 30
    -------------------------------------------------------------------------
    $/boe                       2007      2006      2007      2007      2006
    -------------------------------------------------------------------------
    Oil and gas sales          57.11     48.59     54.55     55.88     52.13
    Royalties, net of ARTC     (8.69)    (9.31)   (10.58)    (9.60)   (11.02)
    Operating costs           (15.22)   (11.40)   (16.93)   (16.04)    (9.86)
    Transportation             (1.01)    (0.80)    (1.13)    (1.07)    (0.82)
    Asset retirement
     expenditures              (1.35)    (0.41)    (3.50)    (1.68)    (0.25)
    -------------------------------------------------------------------------
    Operating netback          30.84     26.67     22.41     27.49     30.18
    Processing and other
     income                     1.95      1.37      1.59      1.77      1.10
    General and administrative (5.72)    (3.35)    (8.56)    (7.08)    (3.61)
    Interest                   (1.61)    (2.95)    (0.93)    (1.28)    (2.35)
    Current taxes              (0.51)     0.34     (0.01)    (0.27)     0.09
    -------------------------------------------------------------------------
    Cash flow                  24.94     22.08     14.51     20.63     25.41
    -------------------------------------------------------------------------
    

    Net Earnings

    Net loss for the three and six months ended June 30, 2007 were
$256 thousand and $1.5 million as compared to net earnings of $609 thousand
and $633 thousand for the same periods in 2006. Loss per share for the three
and six months ended June 30, 2007 was $0.01 and $0.03 as compared to earnings
per share of $0.02 for both the same periods in 2006.

    Capital Expenditures

    During the second quarter no new wells were drilled as the Corporation
focused its efforts toward actively licensing drilling locations and
evaluating existing seismic data for further locations. The Corporation
increased its prospect inventory in Pembina with 8 to 13 new targets
identified in stacked pay intervals in the Nordegg, Rock Creek, and Ellerslie
formations. A total of 13 wells (5.1 net) were drilled in the first three
months of 2007. Of this total, 8 wells (2.7 net) are classified as oil wells,
1 well (0.4 net) is classified as a gas well, 2 wells (1.0 net) are suspended
and 2 wells (1.0 net) are dry and abandoned.
    The Corporation closed on dispositions of certain mainly gas properties
during the second quarter for $3.3 million, representing approximately
70 boe/d; while expenditures on drilling and completing, land, and geological
and geophysical costs totalled $251 thousand, with equipping and facilities
costs totalling $690 thousand. The Corporation also capitalized $313 thousand
of general and administrative costs.
    A total of $167 thousand was spent with respect to abandonment and site
restoration activities for the three months ended June 30, 2007, compared with
$60 thousand in the same period of 2006. These amounts were recorded as a
reduction of the asset retirement obligation liability. In addition to the
above amounts the Corporation has capitalized $402 thousand and $525 thousand
in stock based compensation and related future income taxes for the three and
six months ended June 30, 2007.

    Liquidity and Capital Resources

    At June 30, 2007, Great Plains' total debt and working capital deficiency
totalled $12.4 million compared to $13.9 million at the end of 2006.
    The Corporation has a $26 million revolving demand credit facility with a
Canadian chartered bank with a balance outstanding at June 30, 2007, of
$13.9 million with an additional $4.1 million due in respect of outstanding
cheques. The borrowing amount available is scheduled to increase to
$28 million after August, 2007 and to $29.5 million after October, 2007,
subject to the performance of certain wells that were brought on to production
during the first half of 2007. In addition, a $14.0 million non-revolving
acquisition/development credit facility is available. Interest is charged at
the bank's prime rate per annum. Standby fees associated with the facilities
are 0.10% per annum on the undrawn portion of each of the facilities.
Collateral for the facility consists of a general security agreement,
providing a security interest over all present and after acquired personal
property and a floating charge on all present and after acquired land
interests of the Corporation.
    The next review of this facility is scheduled for April 30, 2008.
    The Corporation expects to be able to fund its capital expenditure
program for the remainder of 2007 using cash flow and available credit
facilities.

    Commitments

    During 2006, Great Plains and its wholly owned subsidiaries issued a
total of $8.0 million flow-through shares. As at June 30, 2007, the
Corporation has incurred sufficient eligible exploration and development
expenditures to satisfy its obligations from this issue.
    In connection with the issuance of flow-through shares in March, 2007,
the Corporation is required to expend $10.0 million of eligible exploration
and development expenditures by December 31, 2008. No amounts have been spent
towards satisfying this commitment.
    The Corporation has entered into lease arrangements for office space to
March 31, 2010. The future minimum lease payments total $0.75 million.
    The Corporation also enters into various contractual obligations in the
normal course of its operations, including the purchase of various operational
services, operating agreements, and office equipment. These contractual
obligations were entered into in the ordinary course of business and the terms
reflect market conditions.

    Capitalization

    During the quarter ended March 31, 2007 the Corporation issued
6.7 million flow through shares pursuant to a private placement. At the end of
June, 2007 (with no change to August 9, 2007) there was a total of
47.6 million Class "A" common shares outstanding, as follows:

    
    -------------------------------------------------------------------------
    Issued and outstanding Class "A"
     common shares                            Number of shares        Amount
    -------------------------------------------------------------------------
    Balance, December 31, 2006                      40,957,672  $ 86,760,222
    Tax effect on flow-through shares                        -    (2,466,319)
    Flow through shares issued for cash
     on private placement                            6,667,000    10,000,500
    Share issue costs, net of future
     taxes, totalling $211,888                               -      (482,479)
    -------------------------------------------------------------------------
    Balance, June 30, 2007                          47,624,672  $ 93,811,924
    -------------------------------------------------------------------------
    

    At June 30, 2007 the Corporation had a total of 4.21 million stock
options outstanding with a weighted average exercise price of $1.54 per common
share. On August 3, 2007, the Corporation granted to directors and employees
1,784,000 stock options to purchase common shares at an exercise price of
$0.95 per share, of which 400,000 were issued under Section 613(c) of the TSX
Company Manual. As at August 9, 2007, there were 4,907,000 stock options
outstanding in total.
    The weighted average number of shares outstanding for the three and six
month period ended June 30, 2007 was 47,624,672 and 44,751,600 (diluted -
47,624,672 and 44,751,600). For the three and six month period ended June 30,
2006, the weighted average number of shares outstanding was 37,207,672 and
37,144,278, respectively (diluted - 37,315,797 and 37,249,153).

    Related Party Transactions

    The Corporation had transactions with a law firm in which a director of
the Corporation is a partner. Transactions for the six months ended June 30th
were as follows:

    
    -------------------------------------------------------------------------
    Recorded as:                                          2007          2006
    -------------------------------------------------------------------------
    General and Administrative Expenses           $     33,268  $     45,857
    Share Capital Issuance Costs                  $     27,326  $      1,621
    Property and Equipment                        $          -  $     80,260
    -------------------------------------------------------------------------
    

    As at June 30, 2007, no amount was a payable to the law firm (June 30,
2006 - $14,164).
    The above transactions are in the normal course of business and have been
valued in these financial statements at the exchange amount which is the
amount of consideration established and agreed to by the related parties.

    Accounting Changes

    Effective January 1, 2007 the Corporation adopted the following new
accounting standards issued by the Canadian Institute of Chartered Accountants
relating to financial instruments. These new standards have been adopted on a
prospective basis with no restatements to prior periods financial statements.

    
    (i)    Financial Instruments - Recognition and Measurement

           This standard sets out the criteria for the recognition and
           measurement of financial instruments for fiscal years beginning on
           or after October 1, 2006. This standard requires all financial
           instruments within its scope, including derivatives, to be
           included on a Corporation's balance sheet and measured either at
           fair value or, in certain circumstances when fair value may not be
           considered most relevant, at cost or amortized cost. Changes in
           fair value are to be recognized in the statements of operations
           and comprehensive income.

           All financial assets and liabilities are recognized when the
           entity becomes a party to the contract creating the item. As such,
           any of the Corporation's outstanding financial assets and
           liabilities at the effective date of adoption are recognized and
           measured in accordance with the new requirements as if these
           requirements had always been in effect. Any changes to the fair
           value of assets and liabilities prior to October 1, 2006 are
           recognized by adjusting opening deficit or opening accumulated
           other comprehensive income.

           All financial instruments are classified into one of the following
           five categories: held-to-maturity, loans and receivables, and
           other financial liabilities, available-for-sale financial assets,
           and held-for-trading. Initial and subsequent measurement and
           recognition of changes in the value of financial instruments
           depends on their initial classification:

              -  Held-to-maturity investments, loans and receivables, and
                 other financial liabilities are initially measured at fair
                 value and subsequently measured at amortized cost.
                 Amortization of premiums or discounts and losses due to
                 impairment are included in current period net earnings.
              -  Available-for-sale financial assets are measured at fair
                 value. Revaluation gains and losses are included in other
                 comprehensive income until the asset is removed from the
                 balance sheet.
              -  Held for trading financial instruments are measured at fair
                 value. All gains and losses are included in net earnings in
                 the period in which they arise.
              -  All derivative financial instruments are classified as held
                 for trading financial instruments and are measured at fair
                 value, even when they are part of a hedging relationship.
                 All gains and losses are included in net earnings in the
                 period in which they relate.

           Upon adoption of these new standards, the Corporation designated
           its cash and cash equivalents as held-for-trading, which are
           measured at fair value. Accounts receivable are classified as
           held-to-maturity investments, which are measured at amortized
           cost. Accounts payable are classified as other financial
           liabilities which are also measured at amortized cost. During the
           three months ended June 30, 2007 the Corporation entered into
           various financial instrument contracts as more fully disclosed in
           Off Balance Sheet Arrangements.

           Prior to adoption of the new standards, physical receipt and
           delivery contracts were not within the scope of the definition of
           a financial instrument. On adoption of the new standards, the
           Corporation elected to continue to account for its commodity sales
           contracts and other non-financial contracts on an accrual basis
           rather than as non-financial derivatives.

           Derivatives embedded in other financial instruments must be
           separated and fair valued as separate derivatives under the new
           standard. The Corporation has not identified any embedded
           derivatives in any of its instruments.

    (ii)   Hedging (Section 3865)

           This new standard specifies the circumstances under which hedge
           accounting is permissible and how hedge accounting may be
           performed. On adoption of these standards, the Corporation did not
           have any agreements or contracts which are following hedge
           accounting.

    (iii)  Comprehensive Income (Section 1530)

           Comprehensive income is the change in shareholders' equity during
           a period from transactions and other events from non-owner
           sources. This standard requires certain gains and losses that
           would otherwise be recorded as part of net earnings to be
           presented in "other comprehensive income" until it is considered
           appropriate to recognize into net earnings. This standard requires
           the presentation of comprehensive income, and its components in a
           separate financial statement that is displayed with the same
           prominence as the other financial statements.

           The Corporation had no "other comprehensive income or loss"
           transactions during the three months ended March 31, 2007 and no
           opening or closing balances for accumulated other comprehensive
           income or loss.
    

    Off Balance Sheet Arrangements

    The Corporation has certain lease agreements that are entered into in the
normal course of operations. All leases are treated as operating leases
whereby lease payments are included in operating expenses or general and
administrative expenses depending on the nature of the lease. No asset or
liability value has been assigned to these leases in the balance sheet as of
June 30, 2007.

    Financial Instrument Contracts

    During the three months ended June 30, 2007 the Corporation entered into
various financial instrument contracts to reduce its exposure to fluctuations
in commodity prices. The financial instrument contracts are classified as held
for trading and recorded at fair value on the consolidated balance sheet. No
financial instrument contracts were designated as hedges during the six months
ended June 30, 2007.
    Details of these contracts were as follows:

    
    Financial WTI Crude Oil Contracts
    -------------------------------------------------------------------------
                                                              Unrealized Gain
                                           Volume      Fixed    /(loss) as at
    Term                         Contract  (bbl/d)     Price    June 30, 2007
    -------------------------------------------------------------------------
    May, 2007 - December, 2007       Swap     150   US$69.05       $ (52,280)
    July, 2007 - December, 2007      Swap     100   US$70.55         (12,325)


    Financial AECO Gas Contracts
    -------------------------------------------------------------------------
                                                              Unrealized Gain
                                           Volume      Fixed    /(loss) as at
    Term                         Contract  (GJ/d)      Price    June 30, 2007
    -------------------------------------------------------------------------
    May 1, 2007 to March 31, 2008     Cap   1,000       9.50       $ (82,438)
    July 1, 2007 to March 31, 2008    Cap   1,000       8.80        (105,076)
    May 1, 2007 to March 31, 2008   Floor   1,000       7.20         320,938
    July 1, 2007 to March 31, 2008  Floor   1,000       7.00         272,572
    -------------------------------------------------------------------------
                                                             Total $ 341,391
                                                                   ----------
    

    Subsequent to June 30, 2007 the Corporation entered into a costless
collar with a floor of $6.50/GJ and a cap of $8.00/GJ on 2000GJ/day for
April 1, 2008 to December 31, 2008.

    Critical Accounting Estimates

    The reader is advised that the critical accounting estimates, policies
and practices as described in the Management Discussion and Analysis at
December 31, 2006 Year-End Report continue to be critical in determining Great
Plains' unaudited financial results as at June 30, 2007.

    Selected Annual and Quarterly Information ($000s)

    
    -------------------------------------------------------------------------
                                                2007                2006
    -------------------------------------------------------------------------
                                            Q2        Q1        Q4        Q3
    -------------------------------------------------------------------------
    Average daily production (boe/d)     1,359     1,272     1,265     1,455
    -------------------------------------------------------------------------
    Oil & gas sales                      7,063     6,247     5,648     6,820
    -------------------------------------------------------------------------
    Cash flow                            3,085     1,662     1,556     2,682
    -------------------------------------------------------------------------
    Net earnings (loss)                   (256)   (1,214)  (28,432)     (836)
    -------------------------------------------------------------------------
    Basic cash flow per share         $   0.06  $   0.04  $   0.04  $   0.07
    -------------------------------------------------------------------------
    Total assets                       114,557   119,147   105,270   132,400
    -------------------------------------------------------------------------
    Long term liabilities               22,122    22,588    20,883    22,002
    -------------------------------------------------------------------------
    Capital expenditures, net of
    dispositions                        (2,040)   15,024     5,536   (10,601)
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                2006                2005
    -------------------------------------------------------------------------
                                            Q2        Q1        Q4        Q3
    -------------------------------------------------------------------------
    Average daily production (boe/d)     1,598     1,583     1,604     1,591
    -------------------------------------------------------------------------
    Oil & gas sales                      7,065     7,940    10,917     9,606
    -------------------------------------------------------------------------
    Cash flow                            3,211     4,105     6,828     5,844
    -------------------------------------------------------------------------
    Net earnings (loss)                    609        24     2,153       838
    -------------------------------------------------------------------------
    Basic cash flow per share         $   0.09  $   0.11  $   0.19  $   0.20
    -------------------------------------------------------------------------
    Total assets                       148,378   141,593   131,189   125,058
    -------------------------------------------------------------------------
    Long term liabilities               22,356    23,841    21,238    20,829
    -------------------------------------------------------------------------
    Capital expenditures, net of
    dispositions                         9,560    14,062     9,882     5,473
    -------------------------------------------------------------------------

    Note: The increase in Q3 2005 quarterly information primarily reflects
    the acquisition of Rock Creek Resources Ltd., effective July 27, 2005.




                         GREAT PLAINS EXPLORATION INC.

                      Consolidated Financial Statements

       For the three months and six months ended June 30, 2007 and 2006



    GREAT PLAINS EXPLORATION INC.

    Consolidated Balance Sheet
    -------------------------------------------------------------------------
    (unaudited)                                        June 30,  December 31,
                                                          2007          2006

    -------------------------------------------------------------------------
    ASSETS

    Current
      Accounts receivable                         $  7,887,568  $  4,462,351
      Financial instruments (Note 13)                  341,391  $          -
      Prepaid expenses and deposits                  1,219,505     1,562,916
    -------------------------------------------------------------------------
                                                     9,448,464     6,025,267

    Property and equipment (Note 4)                105,108,667    99,244,372

    -------------------------------------------------------------------------
                                                  $114,557,131  $105,269,639
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES

    Current
      Bank debt (Note 6)                          $ 17,980,305  $  6,695,392
      Accounts payable and accrued liabilities       3,846,429    13,240,928
    -------------------------------------------------------------------------
                                                  $ 21,826,734  $ 19,936,320

    Asset retirement obligations (Note 5)            3,304,122     3,838,758

    Future income taxes (Note 10)                   18,817,709    17,044,252
    -------------------------------------------------------------------------
                                                  $ 43,948,565  $ 40,819,330
    SHAREHOLDERS' EQUITY

    Share capital (Note 7)                          93,811,924    86,760,222

    Contributed surplus (Note 9)                     3,753,684     3,177,263
    Deficit                                        (26,957,042)  (25,487,176)
    -------------------------------------------------------------------------
                                                  $ 70,608,566  $ 64,450,309
    Commitments and contingencies (Note 12)
    Subsequent events (Notes 13 and 15)
    -------------------------------------------------------------------------
                                                  $114,557,131  $105,269,639
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying notes



    GREAT PLAINS EXPLORATION INC.

    Consolidated Statements of Operations, Other Comprehensive Income, and
    Retained Earnings (Deficit)
    -------------------------------------------------------------------------
    (unaudited)
                              Three months ended            Six months ended
                                         June 30                     June 30
    -------------------------------------------------------------------------
                              2007          2006          2007          2006
    -------------------------------------------------------------------------
    Revenues
    Oil and gas
     sales            $  7,063,129  $  7,065,206  $ 13,309,645  $ 15,005,251
    Royalty expense,
     net of ARTC        (1,074,862)   (1,353,683)   (2,286,568)   (3,170,571)
    Processing and
     other income          240,749       199,710       422,388       314,101
    Unrealized gain
     on financial
     instruments
     (Note 13)             341,391             -       341,391             -
    -------------------------------------------------------------------------
                         6,570,407     5,911,233    11,786,856    12,148,781
    -------------------------------------------------------------------------
    Expenses
    Operating            1,881,924     1,657,188     3,820,370     2,837,292
    Transportation         125,514       115,692       254,485       236,623
    General and
     administrative        706,959       487,393     1,686,815     1,037,829
    Stock based
     compensation
     (Notes 8 and 9)        77,182       294,656       174,025       600,424
    Interest               199,581       429,615       305,504       675,636
    Depletion,
     depreciation
     and accretion       3,829,900     3,897,107     7,555,864     7,623,025
    -------------------------------------------------------------------------
                         6,821,060     6,881,651    13,797,063    13,010,829
    -------------------------------------------------------------------------
    Earnings (loss)
     before taxes         (250,653)     (970,418)   (2,010,207)     (862,048)
    Taxes (Note 10)
    Recovery of future
     income taxes          (57,867)   (1,530,279)     (604,066)   (1,469,974)
    Current taxes
     (recovery)             63,000       (49,519)       63,725       (25,508)
    -------------------------------------------------------------------------
                             5,133    (1,579,798)     (540,341)   (1,495,482)
    -------------------------------------------------------------------------
    Net earnings (loss)   (255,786)      609,380    (1,469,866)      633,434
    Other Comprehensive
     Income                      -             -             -             -
    Retained earnings
     (deficit),
     beginning
     of period         (26,701,256)    3,172,022   (25,487,176)    3,147,968
    -------------------------------------------------------------------------
    Retained earnings
     (deficit), end
     of period        $(26,957,042) $  3,781,402  $(26,957,042) $  3,781,402
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings (loss)
     per share (basic
     and diluted)
     (Note 7)         $      (0.01) $       0.02  $      (0.03) $       0.02
    -------------------------------------------------------------------------



    GREAT PLAINS EXPLORATION INC.

    Consolidated Statements of Cash Flows
    -------------------------------------------------------------------------
    (unaudited)
                              Three months ended            Six months ended
                                         June 30                     June 30
    -------------------------------------------------------------------------
                              2007          2006          2007          2006
    -------------------------------------------------------------------------
    Operating
     Activities
    Net earnings
     (loss)           $   (255,786) $    609,380  $ (1,469,866) $    633,434
    Depletion,
     depreciation
     and accretion       3,829,900     3,897,107     7,555,864     7,623,025
    Stock based
     compensation           77,182       294,656       174,025       600,424
    Unrealized gain
     on financial
     instruments          (341,391)            -      (341,391)            -
    Recovery of future
     income taxes          (57,867)   (1,530,279)     (604,066)   (1,469,974)
    Expenditures on
     asset retirement
     obligations          (167,428)      (59,562)     (567,773)      (70,963)
    -------------------------------------------------------------------------
                         3,084,610     3,211,302     4,746,793     7,315,946
    Changes in non-cash
     working capital
     balances relating
     to operating
     activities
     (Note 11)          (3,206,614)   (2,293,543)   (2,739,709)   (5,883,457)
    -------------------------------------------------------------------------
    Cash provided by
     operating
     activities           (122,004)      917,759     2,007,084     1,432,489
    -------------------------------------------------------------------------
    Financing activities
    Increase in
     bank debt          10,451,224     8,448,577    11,284,913    19,574,436
    Issue of share
     capital, net of
     issue costs           (25,139)            -     9,306,133       350,518
    Changes in non-cash
     working capital
     balances relating
     to financing
     activities
     (Note 11)             (14,575)       (5,997)      (32,373)      (33,824)
    -------------------------------------------------------------------------
    Cash provided
     by (used in)
     financing
     activities         10,411,510     8,442,580    20,558,673    19,891,130
    -------------------------------------------------------------------------
    Investing
     activities
    Property and
     equipment
     expenditures       (1,253,436)   (9,560,028)  (16,154,945)  (23,622,159)
    Proceeds from
     asset dispositions  3,293,411             -     3,293,411             -
    Changes in non-cash
     working capital
     balances relating
     to investing
     activities
     (Note 11)         (12,329,481)      199,689    (9,704,223)    2,298,540
    -------------------------------------------------------------------------
    Cash used in
     investing
     activities        (10,289,506)   (9,360,339)  (22,565,757)  (21,323,619)
    -------------------------------------------------------------------------
    Increase
     (decrease) in
     cash and cash
     equivalents                 -             -             -             -
    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     beginning and
     end of period    $          -  $          -  $          -  $          -
    -------------------------------------------------------------------------



    GREAT PLAINS EXPLORATION INC.
    Notes to the Consolidated Financial Statements
    For the three months and six months
    ended June 30, 2007 and 2006 (unaudited)
    -------------------------------------------------------------------------

    1.  DESCRIPTION OF BUSINESS

        Great Plains Exploration Inc. ("Great Plains" or the "Corporation")
        was incorporated under the Canada Business Corporations Act on
        March 4, 2004, and commenced operations on June 11, 2004. Its
        principal business activity is petroleum and natural gas exploration,
        development and production in Western Canada. Great Plains is listed
        on the TSX under the symbol "GPX".

    2.  BASIS OF PRESENTATION

        These consolidated financial statements include the financial
        position, results of operations and cash flows of its wholly owned
        subsidiaries Great Plains Oil & Gas Partnership and 1196823 Alberta
        Ltd.

    3.  SUMMARY OF ACCOUNTING POLICIES

        The unaudited interim consolidated financial statements of the
        Corporation have been prepared by management in accordance with the
        accounting principles generally accepted in Canada. In the opinion of
        management, these interim consolidated financial statements contain
        all adjustments of a normal and recurring nature necessary to present
        fairly the Corporation's financial position as at June 30, 2007 and
        the results of its operations and cash flows for the three and six
        months ended June 30, 2007 and 2006. The unaudited interim
        consolidated financial statements have been prepared following the
        same accounting policies and methods of computation as the
        consolidated financial statements for the fiscal year ended
        December 31, 2006 except for the accounting policy changes described
        below. The unaudited interim consolidated financial statement note
        disclosures do not include all of those required by Canadian
        generally accepted accounting principles ("GAAP") applicable for
        annual financial statements. Accordingly, 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 and 2005.

        Changes in accounting policies

        Effective January 1, 2007 the Corporation adopted the following new
        accounting standards issued by the Canadian Institute of Chartered
        Accountants relating to financial instruments. These new standards
        have been adopted on a prospective basis with no restatements to
        prior periods' financial statements.

        (i)   Financial Instruments - Recognition and Measurement -
              (Section 3855)

              This standard sets out the criteria for the recognition and
              measurement of financial instruments commencing January 1,
              2007. This standard requires all financial instruments within
              its scope, including derivatives, to be included on a
              Corporation's balance sheet and measured either at fair value
              or, in certain circumstances when fair value may not be
              considered most relevant, at cost or amortized cost. Changes in
              fair value are to be recognized in the statements of operations
              and comprehensive income.

              All financial assets and liabilities are recognized when the
              entity becomes a party to the contract creating the item. As
              such, any of the Corporation's outstanding financial assets and
              liabilities at the effective date of adoption are recognized
              and measured in accordance with the new requirements as if
              these requirements had always been in effect. Any changes to
              the fair value of assets and liabilities prior to January 1,
              2007 are recognized by adjusting opening deficit or opening
              accumulated other comprehensive income.

              All financial instruments are classified into one of the
              following five categories: held-to-maturity, loans and
              receivables, and other financial liabilities, available-for-
              sale financial assets, and held-for-trading. Initial and
              subsequent measurement and recognition of changes in the value
              of financial instruments depends on their initial
              classification:

                -  Held-to-maturity investments, loans and receivables, and
                   other financial liabilities are initially measured at fair
                   value and subsequently measured at amortized cost.
                   Amortization of premiums or discounts and losses due to
                   impairment are included in current period net earnings.

                -  Available-for-sale financial assets are measured at fair
                   value. Revaluation gains and losses are included in other
                   comprehensive income until the asset is removed from the
                   balance sheet.

                -  Held for trading financial instruments are measured at
                   fair value. All gains and losses are included in net
                   earnings in the period in which they arise.

                -  All derivative financial instruments are classified as
                   held for trading financial instruments and are measured at
                   fair value, even when they are part of a hedging
                   relationship. All gains and losses are included in net
                   earnings in the period in which they relate.

              Upon adoption of these new standards, the Corporation
              designated its accounts receivable as loans and receivables,
              which are measured at amortized cost. Bank debt and accounts
              payable and accrued liabilities are classified as other
              financial liabilities which are also measured at amortized
              cost. The Corporation had no available-for-sale assets, or
              held-for-trading instruments. During the three months ended
              June 30, 2007 the Corporation entered into various financial
              instrument contracts as more fully disclosed in Note 13.

              Prior to adoption of the new standards, physical receipt and
              delivery contracts were not within the scope of the definition
              of a financial instrument. On adoption of the new standards,
              the Corporation elected to continue to account for its
              commodity sales contracts and other non-financial contracts on
              an accrual basis rather than as non-financial derivatives.

              Derivatives embedded in other financial instruments must be
              separated and fair valued as separate derivatives under the new
              standard. The Corporation has not identified any embedded
              derivatives in any of its instruments.

        (ii)  Hedging (Section 3865)

              This new standard specifies the circumstances under which hedge
              accounting is permissible and how hedge accounting may be
              performed. On adoption of these standards, the Corporation did
              not have any agreements or contracts which are following hedge
              accounting.

        (iii) Comprehensive Income (Section 1530)

              Comprehensive income is the change in shareholders' equity
              during a period from transactions and other events from non-
              owner sources. This standard requires certain gains and losses
              that would otherwise be recorded as part of net earnings to be
              presented in "other comprehensive income or loss" until it is
              considered appropriate to recognize into net earnings. This
              standard requires the presentation of comprehensive income, and
              its components in a separate financial statement that is
              displayed with the same prominence as the other financial
              statements.

              The Corporation had no "other comprehensive income or loss"
              transactions during the six months ended June 30, 2007 and no
              opening or closing balances for accumulated other comprehensive
              income or loss.

    4.  PROPERTY AND EQUIPMENT

        ---------------------------------------------------------------------
                                                      June 30    December 31
                                                         2007           2006
        ---------------------------------------------------------------------
        Petroleum and natural gas properties
         and related equipment                 $  165,656,271 $  152,350,112
        Accumulated depletion and
         depreciation                             (60,547,604)   (53,105,740)
        ---------------------------------------------------------------------
        Net book value                         $  105,108,667 $   99,244,372
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        As at June 30, 2007, property and equipment includes $17.2 million
        (December 31, 2006 -- $12.6 million) relating to unproved properties
        which have been excluded from the depletion calculation. Future
        development costs relating to proved undeveloped reserves of
        $4.1 million (December 31, 2006 - $6.3 million) are included in the
        depletion and ceiling test calculations.

        During the three and six month periods ending June 30, 2007, the
        Corporation has capitalized $313,748 and $753,323 of general and
        administrative expenses, respectively (three and six month periods
        ended June 30, 2006 - $257,196 and $514,392). The Corporation has
        also capitalized $402,188 and $525,488 of stock based compensation
        and related future income taxes for three and six months ended
        June 30, 2007 (June 30, 2006 - $nil).

    5.  ASSET RETIREMENT OBLIGATIONS

        The following table provides a reconciliation of the beginning and
        ending aggregate carrying amount of the obligation associated with
        the retirement of property and equipment:

        ---------------------------------------------------------------------
                                                   For the six
                                                  months ended    Year ended
                                                       June 30   December 31
                                                          2007          2006
        ---------------------------------------------------------------------
        Balance, beginning of period              $  3,838,758  $  3,728,173
        Liaibilities incurred                          137,556       299,901
        Change in estimate                             171,189       335,246
        Liabilities settled                           (567,773)     (317,475)
        Liabilities eliminated with property sale     (389,608)     (399,675)
        Accretion expense                              114,000       192,588
        ---------------------------------------------------------------------
        Balance, end of period                    $  3,304,122  $  3,838,758
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The preset value of the asset retirement obligation is determined
        using an inflation rate of 2% and an annual credit adjusted discount
        rate of between 5% and 7.5% per annum. The Corporation estimates the
        total undiscounted amount of cash flows required to settle its asset
        retirement obligations is approximately $6.4 million which will be
        incurred between 2006 and 2041, with the majority of the costs to be
        incurred by 2025.

    6.  BANK DEBT

        The Corporation has a revolving demand credit facility with an
        authorized borrowing amount of $26 million, with interest charged at
        the bank's prime rate per annum. The borrowing available is scheduled
        to increase to $28 million after August, 2007 and to $29.5 million
        after October, 2007, subject to the performance of certain wells that
        were brought on to production during the first half of 2007. In
        addition, a $14 million non-revolving acquisition/development credit
        facility is available, with interest charged at the bank's prime rate
        per annum. Standby fees associated with the facilities are 0.1% per
        annum on the undrawn portion of each of the facilities. Collateral
        for the facility consists of a general security agreement, providing
        a security interest over all present and after acquired personal
        property and a floating charge on all present and after acquired land
        interests of the Corporation. The next review of this facility is
        scheduled for April, 2008.

        At June 30, 2007, $13.9 million was drawn against the revolving
        demand credit facility with an additional $4.1 million due in respect
        of outstanding cheques.

    7.  SHARE CAPITAL

        Authorized:
        Unlimited number of Class "A" Common Shares without nominal or par
        value
        Unlimited number of Class "B" Non-Voting Common Shares without
        nominal or par value
        Unlimited number of Preferred Shares without nominal or par value

        Issued:
        ---------------------------------------------------------------------
        Issued and outstanding Class "A"
        common shares                        Number of shares         Amount
                                             ----------------  --------------
        Balance, beginning of period               40,957,672  $  86,760,222
        Tax effect on flow through shares                   -     (2,466,319)
        Flow through shares issued for
         cash on private placement                  6,667,000     10,000,500
        Share issue costs, net of future
         taxes, totalling $211,888                          -       (482,479)
        ---------------------------------------------------------------------
        Balance, June 30, 2007                     47,624,672  $  93,811,924
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        During the six months ended June 30, 2007, 20,000 flow through shares
        for total proceeds in the amount of $30,000 were issued to a director
        of the Corporation.

        Basic earnings per common share are computed by dividing the net
        earnings available to common shareholders by the weighted average
        number of common shares outstanding. Diluted earnings per common
        share are calculated using the treasury stock method to determine the
        dilutive effect of stock options. The treasury stock method assumes
        that the proceeds received from the exercise of "in the money" stock
        options are used to repurchase common shares at the average market
        price during the period. The weighted average number of shares
        assumed to be outstanding was as follows:

        ---------------------------------------------------------------------
                                  Three months ended        Six months ended
                                             June 30                 June 30
        ---------------------------------------------------------------------
                                    2007        2006        2007        2006
        ---------------------------------------------------------------------
        Basic                 47,624,672  37,207,672  44,751,600  37,144,278
        Diluted               47,624,672  37,315,797  44,751,600  37,249,153
        ---------------------------------------------------------------------

        During the six months ended June 30, 2007 the Corporation commenced
        an employee share purchase plan (the "Purchase Plan") for the benefit
        of all salaried employees. Under the Purchase Plan, employees may
        elect to contribute up to 10 percent of their salary towards the
        purchase of common shares in the open market. The Company matches
        employee contributions at a rate of $1.00 for each $1.00 of employee
        contribution for the purchase of common shares in the open market.

        Costs in respect of the employee purchase plan are expensed as
        incurred. Amounts of $40,973 and $180,063 were expensed in respect of
        the Corporation's contribution for the three and six months ended
        June 30, 2007, respectively.

    8.  SHARE OPTION PLAN

        The Corporation has established a stock option plan whereby options
        may be granted to the Corporation's directors, officers, employees
        and consultants. The number of common shares issuable under the
        Corporation's share option plan cannot exceed 10% of the issued and
        outstanding common shares of the Corporation. The number of common
        shares issuable to any one person under the plan cannot exceed 5% of
        the total number of common shares outstanding from time to time. The
        exercise price of each option equals the market price of the
        Corporation's stock on the date of the grant and option's maximum
        life of ten years. The vesting period is determined by the Board of
        Directors. Options issued by the Corporation to date vest one-third
        immediately, one-third after one year following the date of grant,
        and one-third two years following the date of grant.

        The following table sets forth a reconciliation of the stock option
        activity for the period:

        ---------------------------------------------------------------------
                                                                    Weighted
                                                   Number of         Average
                                                      shares  Exercise Price
        ---------------------------------------------------------------------
        Balance at December 31, 2006               3,090,865           $2.50
        Options exercised                                  -           $0.00
        Options issued                             2,575,000           $0.94
        Options cancelled                         (1,459,391)          $2.69
        ---------------------------------------------------------------------
        Stock options outstanding, June 30, 2007   4,206,474           $1.54
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        At June 30, 2007, stock options to purchase common shares were
        exercisable as follows:

        ---------------------------------------------------------------------
                                                                     Average
                                    Number of               Contractual Life
          Exercise Price  Options Outstanding   Exercisable           (Years)
        ---------------------------------------------------------------------
                    0.94            2,575,000       849,750             4.75
            1.60 to 2.45              405,162       405,162             2.03
            2.53 to 2.91            1,226,312       615,038             2.63
        ---------------------------------------------------------------------
                                    4,206,474     1,869,950             4.04
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        For stock options granted during the three months ended June 30, 2007
        the estimated weighted average fair value of share options of $0.36
        per option was determined using the Black-Scholes model using the
        following weighted average assumptions:

        ---------------------------------------------------------------------
        Risk-free interest rate                                          4 %
        Expected hold period to exercise   lesser of 5 years and expiry date
                                           of options
        Volatility in the price of the
         Corporation's share                                             50%
        Dividend yield                                                    0%
        ---------------------------------------------------------------------

        Total compensation expense is amortized over the vesting period of
        the option. Compensation expense of $77,182 and $174,025 has been
        recognized in the three and six month periods ended June 30, 2007,
        ($294,656 and $600,424 or the three and six month periods ended
        June 30, 2006) based on the estimated fair value of the options on
        the grant date in accordance with the fair value method of accounting
        for stock-based compensation. An additional $307,978 and $402,395 in
        stock based compensation has been capitalized for the three and six
        months ended June 30, 2007, respectively (June 30, 2006 - $nil).

    9.  CONTRIBUTED SURPLUS

        The following summarizes the continuity of contributed surplus:

        ---------------------------------------------------------------------
                                                  Six months      Year ended
                                               ended June 30,    December 31,
        ---------------------------------------------------------------------
                                                        2007            2006
        ---------------------------------------------------------------------
        Balance, beginning of period            $  3,177,263    $  2,092,185
        Stock based compensation - expensed          174,025         911,485
        Stock based compensation - capitalized       402,396         228,137
        Transfer to share capital on exercise of
         options and warrants                              -         (54,544)
        ---------------------------------------------------------------------
        Balance, end of period                  $  3,753,684    $  3,177,263
        ---------------------------------------------------------------------

    10. FUTURE INCOME TAXES

        The components of the net future income tax liability are as follows:

        ---------------------------------------------------------------------
                                                  June 30        December 31
                                                     2007               2006
        ---------------------------------------------------------------------
        Temporary differences related to:
        Property and equipment              $  18,640,284    $    15,476,016
        Asset retirement obligations             (944,318)        (1,191,550)
        Unrealized gain on financial
         instruments                              110,447                  -
        Share issue costs                        (692,719)          (647,232)
        Attributed Canadian royalty income       (547,449)          (546,001)
        Partnership deferral                    2,251,464          3,953,019
        ---------------------------------------------------------------------
        Future income tax liability         $  18,817,709    $    17,044,252
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The provision for future income taxes is determined as follows:

        ---------------------------------------------------------------------
                               Three months ended           Six months ended
                                          June 30                    June 30
        ---------------------------------------------------------------------
                                2007         2006          2007         2006
        ---------------------------------------------------------------------
        Combined federal
         and provincial
         corporate tax rate   32.30%       34.65%        32.30%       34.65%
        Earnings before
         taxes             $(250,653)  $ (970,418) $ (2,010,207) $  (862,048)
        Expected tax         (80,961)    (336,250)     (649,297)    (298,700)
        Add (deduct) income
         tax effect of:
        Non-deductible
         crown royalties,
         net of ARTC               -       18,777             -       71,525
        Resource allowance         -       (9,690)            -      (37,587)
        Stock compensation
         expense              24,930       99,132        56,210      208,047
        Rate adjustment       (1,836)  (1,302,248)      (10,979)  (1,413,259)
        ---------------------------------------------------------------------
        Provision for
         (recovery of)
         future income
         taxes             $ (57,867) $(1,530,279) $  (604,066)  $(1,469,974)
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        During the three months ended June 30, 2007 the Corporation paid
        $55,000 towards estimated income taxes arising from an income tax
        audit of a predecessor corporation, Rock Creek Resources Ltd and
        $8,000 towards Saskatchewan capital taxes.

    11. SUPPLEMENTAL CASH FLOW INFORMATION

        Changes in non-cash working capital, excluding bank debt:

        ---------------------------------------------------------------------
                               Three months ended           Six months ended
                                          June 30                    June 30
        ---------------------------------------------------------------------
                                2007         2006          2007         2006
        ---------------------------------------------------------------------
        Accounts
         receivable      $  (945,323) $   494,175  $ (3,425,217) $   246,743
        Prepaid expenses
         and deposits         74,378   (1,511,726)      343,411   (1,379,433)
        Accounts payable
         and accrued
         liabilities     (14,679,725)  (1,082,300)   (9,394,499)  (2,486,051)
        ---------------------------------------------------------------------
        Change in
         non-cash
         working
         capital        $(15,550,670) $(2,099,851) $(12,476,305) $(3,618,741)
        ---------------------------------------------------------------------
        Relating to:
          Operating
           activities   $ (3,206,614) $(2,293,543) $ (2,739,709) $(5,883,457)
          Financing
           activities        (14,575)      (5,997)      (32,373)     (33,824)
          Investing
           activities    (12,329,481)     199,689    (9,704,223)   2,298,540
        ---------------------------------------------------------------------
        Change in
         non-cash
         working
         capital        $(15,550,670) $(2,099,851) $(12,476,305) $(3,618,741)
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The Corporation made the following cash outlays in respect of
        interest expense and current taxes:

        ---------------------------------------------------------------------
                               Three months ended           Six months ended
                                          June 30                    June 30
        ---------------------------------------------------------------------
                                2007         2006          2007         2006
        ---------------------------------------------------------------------
        Interest expense  $  199,581   $  349,508    $  470,367   $  543,162
        Current tax       $   63,000   $  122,473    $   63,725   $  122,473
        ---------------------------------------------------------------------

    12. COMMITMENTS AND CONTINGENCIES

        In connection with the issuance of flow through shares issued by the
        Corporation during the year ended December 31, 2006, the Corporation
        was required to expend $8.0 million of eligible exploration
        expenditures by December 31, 2007. All amounts were expended by
        March 31, 2007.

        At June 30, 2007, in connection with the issuance of flow-through
        shares by the Corporation in March, 2007, the Corporation is required
        to expend $10.0 million of eligible exploration expenditures by
        December 31, 2008.

        The Corporation has entered into lease arrangements for office space
        to March 31, 2010. The future minimum lease payments for the next
        four years are as follows:

              2007           $ 136,877
              2008             273,755
              2009             273,755
              2010              68,439
                             ----------
                             $ 752,826
                             ----------
                             ----------

        As a result of a dispute with a former contractor for the
        construction of a drilling rig the Corporation provided a Letter of
        Guarantee totalling $450,000 to the Province of Alberta. The
        Guarantee is provided as security for costs incurred by the former
        contractor of the drilling rig until actual costs can be determined.
        No amount has been claimed on this Letter of Guarantee. The Guarantee
        expires February 16, 2008. Management is of the opinion that the
        $450,000 claim made by the former contractor is without merit.
        Amounts paid, if any, by the Corporation to settle this dispute will
        be recorded when the amounts become known.

    13. FINANCIAL INSTRUMENTS

        Fair Value

        The Corporation's financial instruments consist of accounts
        receivable, financial contracts, bank debt, accounts payable and
        accrued liabilities. For all periods presented, the fair value of
        financial instruments approximated their book values due to their
        near term maturity or their variable interest rate terms except for
        the financial contracts which have been adjusted to their fair market
        value.

        Interest Rate Risk

        As at June 30, 2007, the Corporation was exposed to changes in
        interest rates with respect to its bank debt.

        Credit Risk

        The Corporation's accounts receivable are primarily with customers in
        the oil and gas industry and government agencies and are subject to
        normal credit risks.

        Foreign Currency Exchange Risk

        The Corporation is exposed to foreign currency fluctuations as crude
        oil and natural gas prices received and certain financial contracts
        are referenced to United States dollar-denominated prices.

        Commodity Price Risk Management

        During the three months ended June 30, 2007 the Corporation entered
        into various financial instrument contracts to reduce its exposure to
        fluctuations in commodity prices. The financial instrument contracts
        are classified as held for trading and recorded at fair value on the
        consolidated balance sheet. No financial instrument contracts were
        designated as hedges during the six months ended June 30, 2007.

        Details of these contracts were as follows:

    Financial WTI Crude Oil Contracts
    -------------------------------------------------------------------------
                                                                  Unrealized
                                                                  Gain/(loss)
                                                                       as at
    Term                Contract  Volume (bbl/d)  Fixed Price  June 30, 2007
    -------------------------------------------------------------------------
    May, 2007 -
     December, 2007         Swap            150      US$69.05      $ (52,280)
    July, 2007 -
     December, 2007         Swap            100      US$70.55        (12,325)

    Financial AECO Gas Contracts
    -------------------------------------------------------------------------
                                                                  Unrealized
                                                                  Gain/(loss)
                                                                       as at
    Term                Contract   Volume (GJ/d)  Fixed Price  June 30, 2007
    -------------------------------------------------------------------------
    May 1, 2007 to
     March 31, 2008          Cap          1,000          9.50      $ (82,438)
    July 1, 2007 to
     March 31, 2008          Cap          1,000          8.80       (105,076)
    May 1, 2007 to
     March 31, 2008        Floor          1,000          7.20        320,938
    July 1, 2007 to
     March 31, 2008        Floor          1,000          7.00        272,572
    -------------------------------------------------------------------------
                                                             Total  $341,391
                                                                   ----------

        Subsequent to June 30, 2007, the Corporation entered into a costless
        collar with a floor of $6.50/GJ and a cap of $8.00/GJ on 2000GJ/day
        for April 1, 2008 to December 31, 2008.

    14. RELATED PARTY TRANSACTIONS

        The Corporation had transactions with a law firm in which a director
        of the Corporation is a partner. Transactions for the three and six
        months ended June 30th were as follows:

        ---------------------------------------------------------------------
                               Three months ended           Six months ended
                                          June 30                    June 30
        ---------------------------------------------------------------------
        Recorded as:            2007         2006          2007         2006
        ---------------------------------------------------------------------
        General and
         administrative
         expenses          $  28,635    $  13,935     $  33,268    $  45,857
        Share capital
         issuance costs    $  25,250    $       -     $  27,326    $   1,621
        Property and
         equipment         $       -    $   6,825     $       -    $  80,260
        ---------------------------------------------------------------------

        As at June 30, 2007, there was a payable to the law firm of $nil
        (June 30, 2006 - $14,164).

        The above transactions are in the normal course of business and have
        been valued in these financial statements at the exchange amount
        which is the amount of consideration established and agreed to by the
        related parties.

    15. SUBSEQUENT EVENT

        On August 3, 2007, the Corporation granted to directors and employees
        1,784,000 stock options to purchase common shares at an exercise
        price of $0.95 per share, of which 400,000 were issued under
        Section 613(c) of the TSX Company Manual. After this grant there were
        4,907,000 options outstanding in total.
    

    %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: www.greatplainsexp.com, Email:
info@greatplainsexp.com

Organization Profile

GREAT PLAINS EXPLORATION INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890