Pearl Exploration and Production Ltd. - Reserves

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Reserves

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Reserves

The Company has filed a reserves report for the period ended December 31, 2007 as evaluated by DeGolyer and MacNaughton Canada Ltd. ("D&M") and prepared in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.

This report documents the results achieved by the company's activities previously reported throughout 2007 such as its ongoing development drilling programs and corporate acquisitions.

The Reserves report and Contingent Resource reports will be available at www.sedar.com and on Pearl's website.

RESERVES REPORT

Based on reserves reports prepared by D&M, using forecast prices and costs, Pearl's Gross Reserves for 2007 as compared to the previous year are as follows. Gross Reserves are Pearl's working interest share (operating or non-operating) before deducting royalties.

VOLUMES	December 31	December 31	Year over Year
	2006	2007	Increase
Reserves Category	(Mboe)	(Mboe)	(%)
Proved Reserves (1)	11,909	22,574	90%
Probable Reserves (2)	15,216	28,755	89%
Possible Reserves (3)	23,568	143,586	509%
Cumulative
Proved plus Probable Reserves	27,125	51,329	89%
Proved plus Probable plus Possible Reserves	50,693	194,915	285%

VALUES	December 31	December 31	Year over Year
	2006	2007	Increase
Reserves Category	(NPV10 (4) M$, BT)	(NPV10 (4) M$, BT)	(%)
Proved Reserves (1)	141,689	203,173	43%
Probable Reserves (2)	147,064	218,073	48%
Possible Reserves (3)	206,934	613,912	197%
Cumulative
Proved plus Probable Reserves	288,753	421,246	46%
Proved plus Probable plus Possible Reserves	495,687	1,035,158	109%

The net present value of Pearl's Proved plus Probable reserves increased to $421.2 million, while the NPV of the total Proved reserves increased to $203.2 million. The NPV of the Proved plus Probable plus Possible reserves is $1,035.2 million.
Acquisitions during 2007 accounted for Reserves additions totaling 2,356 Mboe Proved and 8,772 Mboe Proved plus Probable, and 131,687 Mboe Proved plus Probable plus Possible;

CONTINGENT RESOURCES

For several of its key properties, Pearl has had separate, individual Contingent Resource reports prepared by D&M. Contingent Resources are volumes estimated to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent Resources therefore cannot be classified as reserves. The following are the Contingent Resources currently estimated for Pearl's key properties.

	Contingent
	Resources (5)
Key Properties	(Mboe)
San Miguel	197,162
Fiddler Creek	86,337
Onion Lake	13,267
Palo Duro	11,741
Fishing Lake	10,120
Druid & Springwater	5,234
Mooney	2,575
Total	326,436

NOTES:

(1) Proved Reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

(2) Probable Reserves are those additional reserves that are less certain to be recovered than proven reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the proven plus probable reserves.

(3) Possible Reserves are those additional reserves that are less certain to be recovered than probable reserves. There is only a 10-per-cent probability that the quantities actually recovered will equal or exceed the sum of the proven plus probable plus possible reserves.

(4) The Net Present Value (NPV) based on D&M Forecast Pricing and costs, before taxes, discounted at 10%. The estimated NPV does not necessarily represent the fair market value of our reserves. There is no assurance that forecast prices and costs assumed in the D&M evaluations will be attained, and variances could be material.

(5) Contingent Resources have been prepared in accordance with the PRMS approved in March 2007 by the Society of Petroleum Engineers, the World Petroleum Council, the American Association of Petroleum Geologists, and the Society of Petroleum Evaluation Engineers. Because of the lack of commerciality or sufficient development drilling, the Contingent Resources estimated herein cannot be classified as reserves.

Click here to view Form 51-101F1 - Statement of Reserves Data and Other Oil and Gas Information (PDF, 246kb)