Pearl Exploration and Production

Capex

Pearl set a 2008 capital budget of $61 million.

Future Plans

In 2008, the Company plans to continue pursuing large resource North American heavy oil opportunities to add to its portfolio, to seek to rationalize non-core assets, and to focus on conversion of resources to reserves and development of its existing interests in the USA and Canada.

The Company’s intention is to focus a significant portion of its 2008 budget on resource conversion activities, including the continued work on the steam pilots in San Miguel, Texas, Onion Lake, Saskatchewan and the Blackrod project in the Athabasca region of Alberta. The Company will also be initiating studies to examine options for upgrading and/or refining technologies on its core properties to increase per barrel netback economics. In addition, in order to dedicate more capital and intellectual resources to core properties, the Company has determined that it will investigate the rationalization of certain non-core assets situated in Saskatchewan and Southern Alberta.

Production

Over the course of 2007, Pearl added substantially to its production and resource/reserve base through six corporate and land acquisitions and a major development drilling program.

Much of the operations were focused on development drilling to raise production levels to the 2007 guidance range of 12,000 to 14,000 Boepd. The company’s year end exit rate came in at the low end of the range at 12,100 boepd yet represents a 55% increase over year end 2006 exit rate. In total the Company drilled 170 wells in 2007 throughout its properties utilizing as many as 5 rigs at a time.

Reserves

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