Winstar Announces Record First Half 2007

    CALGARY, Aug. 14 /CNW/ - Winstar Resources Ltd. ("Winstar" or "the
Company") (TSX: WIX) is pleased to announce its operating and financial
results for the second quarter and first half of 2007 and provide an overview
of its plans and perspectives for the remainder of the year and some 2008
preliminary guidance.
    Winstar is a junior oil and gas company focused on Tunisia with medium to
long term Canadian and Hungarian investments. The Company achieved rapid
growth in the first half, with record production and funds from operations.
    The second quarter results recorded a $0.3 million decline in funds from
operations from $3.9 million in Q2 2006 to $3.6 million in Q2 2007, as the
Company's success triggered Tunisian income tax liability ($1.2 million Q2
2007; zero Q2 2006). For the first six months of 2007 the Company recorded a
29% increase in funds from operations to $11.7 million compared to        
$9.0 million for the comparable period in 2006, after accruing for
$2.1 million of 2007 tax expense associated with the southern Tunisian
Concession Chouech Essaida.
    First half earnings are approximately 43% higher year over year (earnings
$3.2 million 2007; earnings $2.3 million 2006) but second quarter earnings are
lower than the three month period of Q2, 2006 (loss $1.3 million 2007,
earnings $0.8 million 2006). Lower year over year earnings reflect lower 2007
gas sales in Hungary as compared to 2006 and the write-down of $3.4 million of
Canadian assets (undeveloped land, seismic and potential reserves).

    First Half 2007 Production, Sales, Cash Flow and Earnings

                                                             % Change over
                                    Six Month Results     First Half of 2006
    Average Production (boepd)             1,854                  + 15%
    Average Sales (boepd)                  2,059                  + 26%
    Funds from Operations
     (CDN $ thousands)                    11,695                  + 29%
    Earnings (CDN $ thousands)             3,232                  + 43%

    First Half 2007 and Q2 2007 Operating and Financial Summary:

    Highlights                     Second Quarter         Year over Year
                                                       First   First
                          Three Months Ended June 30,   Half    Half
                                                 %                       %
                                2007    2006  Change    2007    2006  Change
    Sales and Prices
    Oil and NGL sales (boepd)  1,109     661      68   1,327     605     119
    Natural gas sales (Mcf/d)  2,933   3,830     (23)  4,392   6,201     (29)
    Average daily
     sales 6:1 (boepd)         1,598   1,299      23   2,059   1,639      26
    Average natural
     gas price (CDN$/Mcf)       8.43    6.83      23    8.64    7.11      22
    Average oil and NGL
     price ( CDN $/bbl)        72.66   71.75       1   69.42   68.88       1
    Financial (CDN $ thousands)
    Oil and gas revenue        9,585   6,697      43  23,540  15,528      52
    Funds from operations      3,607   3,857      (6) 11,695   9,046      29
      Per share, basic and
       diluted                  0.13    0.14      (7)   0.40    0.32      25
    Net (loss)/income         (1,288)    847    (252)  3,232   2,262      43
      Per share, basic
       and diluted             (0.04)   0.03    (233)   0.11    0.08      38
    Working capital at
     period end                1,156  15,945     (93)  1,156  15,945     (93)
    Long term debt at
     period end                    -       -       -       -       -       -
    Shareholders' equity
     at period end            69,094  65,888       5  69,094  65,888       5
    Common Shares (thousands)
    Weighted average during
     the period  - Basic      28,742  28,564       1  28,741  28,564       1
                 - Diluted    28,742  28,564       1  29,232  28,564       2
    Outstanding at
     period end               28,780  28,564       1  28,780  28,564       1

    Winstar realized record oil and gas production in the first half of 2007
of 1,854 boepd, or a 15% increase over the comparable period in 2006. The
Company's drilling and recompletion success in Tunisia more than offset
declines in Hungary and Canada.

    Production Area (boepd)                     Six months ended
    June 30,                             2007                           2006
    Canada                                424                            437
    Hungary                               367                            663
    Tunisia                             1,063                            518
    Total boepd                         1,854                          1,618

    Second quarter recompletion results at Chouech Essaida (News Released
May 1, 2007) and subsequent operational results at Sabria 11 (News Released
July 9, 2007) plus the announcement of the new rig contract for Tunisia (press
released July 19, 2007) support our confidence and our focus on the Tunisian
business plan.

    Plans and Perspectives for 2007 and 2008

    The Company's primary focus for the remainder of 2007 and for 2008 will
be Tunisia, where recent successes are generating substantial growth
opportunities. At Sabria, the continued strong performance of our new
Sabria 11 oil well has resulted in the Company considering an extensive
development program to harvest the recognized large in-place oil reserves. The
maximization of this core asset will be one of the Company's primary
activities throughout 2008 and beyond. At Chouech Essaida, high productivity
recompletions in Q4 2006 and the first half of 2007 have illustrated what the
Company believes to be the undeveloped oil potential within existing well
bores. During the remainder of 2007 and in 2008, the Company plans a number of
new recompletions, the first new development well aimed at extending the
established field boundaries, and a 3D seismic program at Chouech Essaida and
Ech Chouech to pin point a Silurian exploration well in late 2008. The
development of the high impact Triassic oil play and the exploration of the
deeper Silurian plays will be a core activity at Winstar.

    The Company's very profitable Hungarian gas operations will continue for
the remainder of 2007 and into the first half of 2008 at which time it is
expected our gas wells will reach their economic limit. Gas prices in Hungary
remain over $9 per Mcf, but the Company's gas production is subject to
seasonal demand which will remain low until Q4 2007. The Company continues to
reprocess its existing seismic and is considering the acquisition of new
seismic to identify exploration targets for the first half of 2008.

    Winstar's Canadian production is mature with low decline. Of the roughly
424 boepd produced in the first half of 2007, some 60% is in the form of
natural gas. Natural gas is the dominant product anticipated over the majority
of our undeveloped lands. Current natural gas prices at $5 per Mcf, coupled
with high drilling costs and moderate initial production rates, generate
marginal rates of return. Until circumstances improve, Winstar has little
additional drilling planned for Canada in the second half of 2007, with the
exception of the oil dominated Sturgeon Lake region, where, subject to
obtaining surface rights, one or two wells are planned. At Strachan, subject
to receiving partner financial support, the Company will conduct a large Leduc
stimulation on its recent well in Q3 or Q4 2007. The company carries over
$6 million of value for the Strachan well on its balance sheet. A successful
completion would support the current investment, while a marginal result could
trigger an impairment during the last half of 2007.
    Continued low North American gas prices make the Canadian properties and
goodwill more susceptible to write-downs. At June 30, 2007, all Canadian
assets were reviewed, and further to a $3.4 million write down, no further
impairment was indicated at this time.

    Winstar is forecasting average net daily production (sales) of between
2,000 and 2,200 boepd in 2007, as compared to 1,612 boepd in 2006. Production,
funds from operations and capital expenditure forecast for 2007 has been
adjusted downward from our guidance of May 10, 2007 by 25%, with the deferral
of the second new well at Sabria (Sabria 12) to Q2 2008 when Winstar's
contracted drilling rig is anticipated to be available, and the delay of gas
sales from Chouech Essaida until Q3 2007.
    The Company's 2007 production is expected to generate funds from
operations of $25 to $30 million, or $0.80 to $1.00 per share, based on
Winstar's current commodity prices and second half operational success.
Capital expenditures for full year 2007 are expected to be in the order of
$30 to $35 million ($16.6 million First Half, 2007), subject to availability
of equipment and other factors. This capital budget will be funded through
working capital, bank debt, cash flow and other means.
    The Company continues to monitor its Canadian assets relative to fair
market carrying value. Additional Canadian impairments may develop during the
last half of 2007 if ongoing operations in Canada are not successful or if
natural gas prices materially decline.

    The Company's guidance for 2008 is very preliminary. A number of material
variables, including partner consent, equipment availability, facility
reliability and commodity prices, will have a significant impact on this
guidance. Presuming that the Company invests between 100 and 150% of its
projected 2008 funds from operations, it is expected average net daily
production (sales) during 2008 will increase by more than a third over 2007.


    References herein to boe mean barrels of oil equivalent derived by
converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to
one barrel (bbl) of oil. Boe may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 Mcf:1 bbl is based upon an energy
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.

    Non-GAAP Measures

    "Funds from operations," "funds from operations per share" and "netbacks"
are not recognized measures under Canadian generally accepted accounting
principles. The Company uses these measures to help evaluate its performance.
Management considers netbacks an important measure as it demonstrates its
profitability relative to current commodity prices. Management uses funds from
operations to analyze performance and considers it a key measure as it
demonstrates the Company's ability to generate the cash necessary to fund
future capital investments and to repay debt. Funds from operations have been
defined by the Company as cash flow from operating activities excluding the
change in non-cash working capital related to operating activities, geological
and geophysical expenses and expenditures on asset retirement obligations and
reclamation. The Company also presents funds from operations per share whereby
amounts per share are calculated using weighted average shares outstanding
consistent with the calculation of earnings per share. Winstar's determination
of funds from operations may not be comparable to that reported by other
companies nor should it be viewed as an alternative to cash flow from
operating activities, net earnings or other measures of financial performance
calculated in accordance with Canadian GAAP. The Company also presents funds
from operations per share whereby amounts per share are calculated using
weighted average shares outstanding consistent with the calculation of
earnings per share. Winstar's determination of cash flow and funds from
operations may not be comparable to that reported by other companies nor
should it be viewed as an alternative to cash flow from operating activities,
net earnings or other measures of financial performance calculated in
accordance with Canadian GAAP.

    Sales and Seasonality

    Oil and natural gas production is not necessarily equal to sales.
Tunisian oil is transported or pipelined to a terminal for periodic offloading
onto oil tankers. Revenue from tanker sales is recognized only when the sale
occurs. Production during the period is carried in inventory until sold.
Hungarian natural gas is sold on a monthly basis into the local market.
Monthly sales are subject to local market product demand which increases
during the heating seasons of fall and winter and curtails over the warmer
spring and summer seasons.

    Forward-Looking Statements

    This press release contains forward-looking statements. These statements
relate to future events or future performance of Winstar. When used in this
press release, the words "may", "would", "could", "will", "intend", "plan",
"anticipate", "believe", "estimate", "predict", "seek", "propose", "expect",
"potential", "continue", and similar expressions, are intended to identify
forward-looking statements. These statements involve known and unknown risks,
uncertainties, and other factors that may cause actual results or events to
differ materially from those anticipated in such forward-looking statements.
Such statements reflect the Company's current views with respect to certain
events, and are subject to certain risks, uncertainties and assumptions. Many
factors could cause the Company's actual results, performance, or achievements
to materially differ from those described in this press release. Should one or
more of these risks or uncertainties materialize, or should assumptions
underlying forward-looking statements prove incorrect, actual results may vary
materially from those described in this press release as intended, planned,
anticipated, believed, estimated, or expected. Specific forward-looking
statements in this press release include, among others, statements pertaining
to the following: factors upon which Winstar will decide whether or not to
undertake a specific course of action; and estimated volumes and timing of
future production; business plans for drilling, exploration and development;
and other expectations, beliefs, plans, goal, objectives, assumptions,
information and statements about possible future events, conditions, results
of operations or performance. The risks to which Winstar is subject include
those of the oil and gas industry in general including operational risks in
exploring for, developing and producing crude oil and natural gas; risks and
uncertainties involving geology of oil and gas deposits; volatility in global
market prices for oil and natural gas; general economic conditions;
competition; liabilities and risks, including environmental liability and
risks, inherent in oil and gas operations; uncertainties as to the
availability and cost of financing and changes in capital markets;
alternatives to and changing demand for petroleum products; and changes in
legislation and the regulatory environment, including uncertainties with
respect to the Kyoto Protocol. Furthermore, statements relating to "reserves"
or "resources" are deemed to be forward-looking statements, as they involve
the implied assessment, based on certain estimates and assumptions that the
resources and reserves described can be produced profitably in the future. The
forward-looking statements contained in this press release are expressly
qualified in their entirety by this cautionary statement. These statements
speak only as of the date of this press release. The Company does not intend
and does not assume any obligation, to update these forward-looking statements
to reflect new information, subsequent events or otherwise, expect as required
by law.

    Winstar Resources Ltd. is a Calgary-based junior oil and gas company,
which explores for, develops, produces, and sells crude oil, natural gas
liquids and natural gas in Alberta, Tunisia and Hungary. Winstar's common
shares trade on the Toronto Stock Exchange under the symbol WIX.

For further information:

For further information: Mr. David Monachello, President, Phone: (403)
513-4200, Email; or Mr. Charles de Mestral, Chief
Executive Officer, Phone: Toll-free (Canada and USA) 1-800-875-1217, (Note:
Mr. de Mestral is based in Europe, in a time zone eight hours ahead of Calgary
time), Email:

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