Highpine Oil & Gas Limited provides update based on Alberta royalty announcement

    CALGARY, Oct. 29 /CNW/ - Highpine Oil & Gas Limited (TSX: HPX)
("Highpine") has prepared an estimate of the potential effect on cash flow of
the announced Alberta royalty rate changes. If enacted, the changes to the
royalty rates would become effective only on January 1, 2009.
    If the changes were enacted and applicable today and based on the
company's interpretation of publicly available information, Highpine estimates
that the potential effect on cash flow from current production would result in
an approximate reduction of 29% (based on a benchmark constant price deck of
WTI USD $70/bbl and AECO CDN $6.00/MMbtu and using a par foreign exchange
ratio) and that the potential effect on before tax discounted cash flows
(discounted at 10%) would result in an approximate reduction of 27%.
    Given the methodology used in the proposed royalty regime, the effects on
cash flow will be affected by depths and productivity of wells. The actual
effect of the Alberta royalty rate changes on Highpine will be determined
based on the actual legislation enacted, the production rates, commodity
prices and product mix after January 1, 2009.
    Highpine believes that the royalty changes produce a number of anomalous
and discriminatory results for companies engaged in high-risk oil exploration.
Highpine intends to continue to work with the Government of Alberta to address
what it believes to be these unintended consequences of a number of the
proposed changes.

    Highpine is a Calgary-based oil and natural gas company engaged in
exploration for and the acquisition, development and production of natural gas
and crude oil in western Canada. Highpine's current exploration and
development efforts are focused in the West Pembina Nisku and West Central
Alberta Gas Fairway, both located in Central Alberta. The company's class A
common shares trade on the Toronto Stock Exchange under the symbol "HPX".

    Reader Advisory

    Certain information regarding Highpine in this news release including
management's assessment of future plans and operations and the effect on
Highpine and its cash flow from changes to royalty rates in Alberta may
constitute forward-looking statements under applicable securities laws and
necessarily involve risks including, without limitation, risks associated with
oil and gas exploration, development, exploitation, production, marketing and
transportation, risks associated with sour hydrocarbons, changes to the
proposed royalty regime prior to implementation and thereafter, loss of
markets, volatility of commodity prices, currency fluctuations, imprecision of
reserve estimates, environmental risks, competition from other producers,
inability to retain drilling rigs and other services, capital expenditure
costs, including drilling, completion and facilities costs, unexpected decline
rates in wells, delays in projects and/or operations resulting from surface
conditions, wells not performing as expected, delays resulting from or
inability to obtain required regulatory approvals and ability to access
sufficient capital from internal and external sources. As a consequence,
actual results may differ materially from those anticipated in the
forward-looking statements. Readers are cautioned that the forgoing list of
factors is not exhaustive. Additional information on these and other factors
that could effect Highpine's operations and financial results are included in
reports on file with Canadian securities regulatory authorities and may be
accessed through the SEDAR website (www.sedar.com) and at Highpine's website
(www.highpineog.com). Furthermore, the forward-looking statements contained in
this news release are made as at the date of this news release and Highpine
does not undertake any obligation to update publicly or to revise any of the
forward-looking statements, whether as a result of new information, future
events or otherwise, except as may be required by applicable securities laws.
    Boes may be misleading, particularly if used in isolation. A boe
conversion ratio of six Mcf to one 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.
    The term "cash flow" is not a recognized measure under Canadian generally
accepted accounting principles ("GAAP"). Management believes that in addition
to net earnings, cash flow is a useful supplemental measure as it provides an
indication of the results generated by Highpine's principal business
activities before the consideration of how these activities are financed or
how the results are taxed. Investors are cautioned, however, that this measure
should not be construed as an alternative to net earnings determined in
accordance with GAAP as an indication of Highpine's performance. Highpine's
method of calculating cash flow may differ from other companies, especially
those in other industries and accordingly may not be comparable to measures
used by other companies. Highpine calculates cash from operations as cash from
operating activities before the change in non-cash working capital related to
operating activities.

For further information:

For further information: A. Gordon Stollery, President and Chief
Executive Officer; Bob Rosine, Executive Vice President, Corporate
Development; Harry D. Cupric, Vice President, Finance and Chief Financial
Officer; Telephone: (403) 265-3333, Facsimile: (403) 265-3362, Website:

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Highpine Oil & Gas Limited

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