Angle Energy Inc. (Angle Energy) has announced a strategic reduction in drilling activity and revised operational and financial guidance for the balance of 2009. Angle Energy's revised 2009 guidance includes the deferral of $10 million of drilling and related capital expenditures in the second half of 2009, reducing the company's projected 2009 production growth and related cash flow from its previous guidance.

As a result of this capital deferral, the company expects to maintain its low debt to cash flow ratio for 2009 (projected at less than 0.4 times), and preserve the balance sheet to allow for capitalization on acquisition opportunities and sustainability if natural gas prices are slow to recover early in 2010.

Angle Energy’s drilling activity for the balance of 2009 is largely discretionary based on commodity prices and the company’s corresponding targets for return on capital invested. Angle Energy’s view of the near term market conditions has caused these changes to Angle Energy’s discretionary activities. Angle Energy targets an overall recycle ratio of two (field netback as compared to finding cost per boe, calculated with previous reporting,), with a minimum threshold ratio of greater than 1. Given the current AECO gas price environment of about $2-$2.50/GJ, and coupled with the near term fundamentals of continued high levels of US gas production, storage injections, and weak industrial demand, the Company has taken a conservative view on natural gas pricing for the remainder of 2009 and accordingly will reduce capital activity which is unlikely to meet the minimum threshold returns.

Angle Energy’s revised forecast guidance for the year ending December 31, 2009 is as follows:

– Drilling of 14 gross wells during 2009, including six gross wells at a 100% working interest from July 1 to December 31, 2009. The activity in the second half of 2009 includes two wells at Lone Pine Creek (capital commitments) and discretionary drilling in Ferrier (three wells) and Harmattan (one well). Deferral of five to seven gross wells from previous guidance.

– Average production for 2009 in the range of 7,500 to 7,600 boe/d (approximately 15% growth over the company’s average production in 2008 of 6,586 boe/d). The deferral of development drilling has resulted in this target reduction in average volumes of about 400 boe/d (about 5%) from prior guidance.

– Capital expenditures of $42 to $44 million for 2009, not including the Ferrier acquisition in the first half of 2009 at a cost of $22.5 million, or inclusion of the Alberta Crown drilling meterage incentives as credits against capital which are now expected to be in the range of $2.1 million. Reduction in planned capital expenditures of $10 million (about 19%) from prior guidance.

– Royalty rates in the range of 24% to 26%, operating costs between $5 to $5.2 per boe and net general and administrative expenses in the range of $1.9 to $2 per boe. Royalty rates as quoted do not include the Alberta Crown drilling meterage credits.

– Cash flow in the range of $32 to $34 million and 2009 exit net debt of less than $15 million, based upon forecast prices of about $2.50/mcf AECO and $65/bbl WTI for the period of July 1 to December 31, 2009. Prior guidance was using forecast prices of $4/GJ ($4.22/mcf) AECO and $55/bbl WTI, reflecting a reduction in forecast gas price of 40%.

– No current plans to shut in production, due to low operating costs and high NGL content in Angle’s natural gas production. The Company’s low cost structure and exposure to oil pricing through condensate production results in positive field operating netbacks in this current low gas price environment.

The company enjoys a strong financial position due to prudent balance sheet management, and high working interest and operatorship in the majority of its projects. The resulting strong balance sheet affords Angle the ability to continue to seek acquisitions with the potential to enhance value based growth, while maintaining infrastructure control, operatorship and a high working interest position.

Recent Events

Angle Energy received a routine drilling license on September 3, 2009 for the second of the company’s planned 2009 locations in the Lone Pine Creek area. This Wabamun gas target is an exploratory drill targeting the north end of the projected extension of the Lone Pine Creek pool. Angle is planning to drill horizontally and will spud the well prior to the end of the third quarter.