Redcliffe Announces Q3 2009 Financial Results

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. PERSONS.

Redcliffe Exploration Inc. ("Redcliffe" or the "Company") (TSX
VENTURE:RXP.A)(TSX VENTURE:RXP.B) is pleased to announce that it has filed its
unaudited interim consolidated financial statements and related Management's
Discussion and Analysis as of and for the three and nine months ended September
30, 2009 with Canadian securities regulatory authorities. These filings are
available for review at www.sedar.com.


Q3 2009 Highlights:

- Production for Q3 2009 increased 4% to 864 boe/d and 8% to 982 boe/d for the
three and nine months ended September 30, 2009, respectively, compared to the
corresponding periods in 2008. Q3 2009 production continued to be affected by
low natural gas prices, resulting in approximately 250 boe/d of production
shut-ins combined with delayed tie-ins of previously drilled wells. The Company
estimates its current production capability at 1,000 - 1,100 boe/d, and expects
all of its wells to be on production in December 2009, although some are
expected to produce at restricted rates.


- Net debt decreased 50% to $6,687,000 at September 30, 2009, compared to
$13,472,000 at December 31, 2008. This compares to Redcliffe's bank lines at
September 30, 2009 of $14.1 million. The decrease was primarily the result of
closing two equity financings in Q2 - Q3 2009 for gross proceeds of $8,200,000.


- Net capital expenditures totaled $2,629,000 for Q3 2009 and $5,270,000 for the
nine months ended September 30, 2009. The Company did not drill any wells during
Q3 2009 with the majority of capital expenditures during the period consisting
of Crown land purchases and completion activity on previously drilled wells.
During the first nine months of 2009, the Company drilled 3 (1.81 net) wells,
which resulted in 2 (1.38 net) natural gas wells and 1 (0.43 net) dry and
abandoned well, for an overall net success rate of 76%.


- Petroleum and natural gas sales decreased 57% to $2,347,000 and 45% to
$9,224,000 for the three and nine months ended September 30, 2009, respectively,
compared to the corresponding periods in 2008. This was primarily caused by a
decrease in product prices realized of 42% and 49% for the respective periods in
2009 compared to 2008, and has had a corresponding impact on cash flows from
operations in 2009.


- Established an $8 million Q4 2009 / Q1 2010 winter drilling program focused in
the Company's core gas area in the Gold Creek / Wapiti / Karr regions of
northwestern Alberta, and in the developing Cardium horizontal oil play in the
Pembina area of central Alberta.




                                           Three months         Nine months
                                     ended September 30  ended September 30
                                --------------------------------------------
Financial                                2009      2008      2009      2008
----------------------------------------------------------------------------
($ thousands, except per share
 amounts)

Petroleum and natural gas sales         2,347     5,411     9,224    16,693
Funds from operations (1)                 321     2,011     2,956     7,021
 Per basic and diluted share                -      0.02      0.03      0.09
Cash provided by operating activities     861     1,368     2,126     5,923
 Per basic and diluted share             0.01      0.02      0.02      0.08
Net income (loss)                      (2,160)    1,856    (4,575)      632
 Per basic and diluted share            (0.02)     0.02     (0.04)     0.01
Capital expenditures, net               2,629     4,474     5,270    13,096
Weighted-average shares (thousands)
 Basic                                122,080    80,484   109,966    75,549
 Diluted                              122,080    80,484   109,966    78,872

Capital Structure                    September 30, 2009   December 31, 2008
----------------------------------------------------------------------------
($ thousands, except share amounts)

Working capital deficiency (2)                    1,156               4,885
Bank debt                                         5,531               8,587
Net debt (3)                                      6,687              13,472
Total assets                                     61,878              66,683
Shares outstanding (thousands)
 Class A (4)                                    110,308              74,235
 Class B                                          1,494               1,494

                                           Three months         Nine months
                                     ended September 30  ended September 30
                                --------------------------------------------
Operations                               2009      2008      2009      2008
----------------------------------------------------------------------------

Daily production
 Crude oil and condensate (bbl/d)         166       224       180       176
 Natural gas liquids (bbl/d)               97        47       126       109
 Natural gas (mcf/d)                    3,605     3,345     4,057     3,739
 Oil equivalent (boe/d @ 6:1)             864       828       982       908
 Per million diluted shares               7.1      10.3       8.9      12.0
Average prices (4)
 Crude oil and condensate ($/bbl)       69.18    115.45     58.55    115.95
 Natural gas liquids ($/bbl)            25.40     49.79     24.10     55.04
 Natural gas ($/mcf)                     3.20      8.95      4.86      9.17
 Oil equivalent ($/boe)                 29.52     71.00     34.39     67.08
Netback
 Operating netback ($/boe) (5)          10.73     39.22     16.80     38.79
 Realized gain (loss) on financial
  derivatives ($/boe)                       -     (3.36)     0.66     (1.99)
 General and administrative ($/boe)     (5.74)    (7.68)    (5.34)    (6.97)
 Interest ($/boe)                       (0.95)    (1.78)    (1.10)    (1.61)
 Funds from operations ($/boe)           4.04     26.40     11.02     28.22
Drilling activity
 Gross wells                                -      2.00      3.00      5.00
 Net wells                                  -      1.03      1.81      3.53
 Success rate, net wells                    -       100%       76%      100%
----------------------------------------------------------------------------
(1) Funds from operations is calculated as cash provided by operating
    activities and adding changes in non-cash working capital and asset
    retirement expenditures, if any. Funds from operations is used to
    analyze the Company's operating performance and leverage. Funds from
    operations does not have a standardized measure prescribed by GAAP and
    therefore may not be comparable with calculations of similar measures
    for other companies.
(2) Working capital deficiency includes only accounts receivable, prepaid
    expenses and deposits, and accounts payable and accrued liabilities.
(3) Net debt represents the sum of working capital deficiency and bank debt.
(4) Average prices are before the deduction of transportation costs; oil
    equivalent includes sulphur sales.
(5) Operating netback equals petroleum and natural gas sales less royalties,
    operating expenses and transportation costs, calculated on a boe basis.
    Operating netback does not have a standardized measure prescribed by
    GAAP and therefore may not be comparable with the calculation of similar
    measures for other companies.



Outlook:

The Company has planned an $8 million winter capital program for Q4 2009 and Q1
2010, which will be funded from cash flows and the equity financings that were
completed in Q2 - Q3 2009, which were initially used to repay debt. This capital
program will be focused in the Company's core gas area in the Gold Creek /
Wapiti / Karr regions of northwestern Alberta, and in the developing Cardium
horizontal oil play in the Pembina area of central Alberta.


Redcliffe currently owns interests in 108 sections of land in the Peace River
Arch multi-zoned gas basin, centered around its Gold Creek / Wapiti production.
This winter's capital program will focus on the Company's Montney and Nikanassin
gas potential in this area, and is being driven by anticipated strengthening gas
prices in 2010 and by the recent nearby successes of intermediate and larger
sized competitors.


In the Karr area, Redcliffe plans to drill two vertical wells offsetting the
four existing and six additional planned horizontal wells of an intermediate gas
producer. These two vertical wells, while also targeting up-hole gas horizons,
will primarily target the Montney sand. The Montney potential has already been
established by these adjacent horizontals that have reported test rates of up to
5 mmcfpd with associated liquids. Both wells will be cored for reservoir
optimization purposes. Depending upon the outcome of a drilling option in the
Gold Creek area currently being seismically evaluated, Redcliffe may allocate
additional funds to the Karr area and convert one of these vertical tests to a
horizontal drill or, alternatively, drill a horizontal well on farm-in lands.
This determination will be made prior to year-end. Redcliffe maintains an
approximate 90% working interest in 15 sections of land over this prospect. In
addition, Redcliffe has exposure to Montney turbidite siltstone potential in
approximately 89 sections across its Gold Creek / Wapiti / Karr core areas at an
average controlling working interest of approximately 70%.


In the Wapiti area, Redcliffe will drill a vertical Nikanassin test on a
recently acquired 100% working interest four-section block of land. This test
well, if successful, will be the fourth Nikanassin producer for the Company.
Like the Montney Formation at Karr, the Nikanassin Formation represents a
resource-style play that offers upside from anticipated increases in natural gas
prices combined with the predictable nature of a large gas deposit developed
utilizing horizontal drilling and multi-staged stimulation techniques. While
Montney shale and sand deposits are being developed at this time utilizing
multi-staged horizontal fracture techniques, to our knowledge the Nikanassin has
yet to be tested horizontally in the immediate area, although other operators
have recently licensed horizontal wells nearby. Vertical wells drilled to the
north and utilizing optimized fracture completion techniques have achieved
initial rates in the 3 - 5 mmcfpd range. Redcliffe estimates that it has
exposure to Nikanassin potential in approximately 82 sections in both its Wapiti
/ Gold Creek core areas at an average controlled working interest of 63%.


In the Gold Creek area, Redcliffe will re-complete the Nikanassin zone on an
existing 50% working interest well in Q4 2009. The Company also has a number of
drills planned, subject to partner approvals and the completion of an analysis
of a recently acquired seismic program. These wells range in working interest
from 30% - 72%. Confirmation of scheduling for these wells for 2010 is currently
in progress.


Redcliffe plans to drill at least one horizontal Cardium well prior to year-end
in Pembina. Recent drilling offsetting the Company's lands has resulted in
initial rates over 250 bopd per well with the ultimate potential of drilling 2 -
4 wells per section. Two recent horizontal wells have been drilled directly
offsetting Redcliffe's lands. This play is drawing significant attention due to
both its areal extent and the potential reserves per section estimated at
400,000 - 600,000 barrels. Redcliffe has 12 sections of land with Cardium
potential at an average working interest of 65%. 


After a time of distressed natural gas pricing and resultant limited capital
activity during the first three quarters of 2009, we are excited to recommence
drilling activity at a meaningful level in anticipation of improved commodity
prices through 2010. With our extensive land inventory and Montney / Nikanassin
potential, we look forward to developing our assets for significant growth
during the second half of 2010.


Reader Advisories

Forward-Looking Statements: This news release contains certain forward-looking
statements, including management's assessment of future plans and operations,
and capital expenditures and the timing thereof, that involve substantial known
and unknown risks, uncertainties and assumptions, certain of which are beyond
the Company's control. Such risks, uncertainties and assumptions include,
without limitation, those associated with oil and gas exploration, development,
exploitation, production, marketing, processing and transportation, 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, delays resulting from or
inability to obtain required regulatory approvals and ability to access
sufficient capital from internal and external sources, the impact of general
economic conditions in Canada, the United States and overseas, industry
conditions, changes in laws and regulations (including the adoption of new
environmental laws and regulations) and changes in how they are interpreted and
enforced, increased competition, the lack of availability of qualified personnel
or management, fluctuations in foreign exchange or interest rates, stock market
volatility and market valuations of companies with respect to announced
transactions and the final valuations thereof, and obtaining required approvals
of regulatory authorities. The Company's actual results, performance or
achievements could differ materially from those expressed in, or implied by,
these forward-looking statements and, accordingly, no assurances can be given
that any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what benefits that the Company will
derive there from. Readers are cautioned that the foregoing list of factors is
not exhaustive. Additional information on these and other factors that could
affect the Company's operations and financial results are included in reports,
including the Company's annual information form for the financial year ended
December 31, 2008, on file with Canadian securities regulatory authorities and
may be accessed through the SEDAR website (www.sedar.com). All subsequent
forward-looking statements, whether written or oral, attributable to the Company
or persons acting on its behalf are expressly qualified in their entirety by
these cautionary statements. Furthermore, the forward-looking statements
contained in this news release are made as at the date of this news release and
the Company does not undertake any obligation to update publicly or to revise
any of the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required by applicable
securities laws. 


BOE may be misleading, particularly if used in isolation. A BOE conversion 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.