Cabre Exploration Ltd. Wishes to Announce Its First Quarter 1998 Results.

CALGARY, Alberta--(BUSINESS WIRE)--May 7, 1998--Cabre (TSE:CBE.) Revenue net of royalties fell 32 percent to $18.9 million compared to $27.7 million for the period one year earlier.

Reduced revenue was due to an oil price decline of 33 percent from $27.64 per barrel to $18.51 and a 25 percent decline in the gas price received from $2.14 per thousand cubic feet to $1.60. As a result the company had a net loss of $0.8 million ($0.04 per share; $0.04 fully diluted) compared to net income of $5.0 million ($0.29 per share; $0.28fd) in the first quarter of 1997. Cash flow fell 50 percent to $9.8 million ($0.56 per share; $0.55 fully diluted) from $18.1 million ($1.15 per share; $1.09fd). The Company's debt, net of working capital, was $96 million at March 31 and there were 17,341,508 shares outstanding compared to 17,399,908 outstanding at the year end reflecting purchases made pursuant to the Company's issuer bid, net of stock option exercises.

During the quarter the Company produced a daily average of 55.1 million cubic feet of natural gas, up 17 percent from 47.0 million cubic feet in 1997 and 9,894 barrels of oil and liquids, down 10 percent from 11,055 barrels. This compares to fourth quarter 1997 averages of 61.4 million cubic feet of gas and 9,852 barrels of oil and liquids per day respectively. Gas volumes were expected to be higher, however, approximately 15 million cubic feet per day of deliverability is shut in in the Marten Hills area due to unavailable gas plant capacity. The Company estimates it is currently producing 59 million cubic feet of gas and 10,250 barrels of liquids per day. Internal forecasts suggest strong production increases are achievable through its drilling program over the balance of 1998 but not at earlier forecasted levels unless acquisitions can be made.

The Company drilled and participated in 59 wells (47.5 net), including 11 oil wells (9.7 net), 32 gas wells (24.7 net), 15 dry holes (12.09 net) and one net service well. The Company was most active in the Pelican/Marten Hills (18 wells). Provost/Halkirk (16 wells) and Birch/Tar areas (12 wells), while important new discoveries were also made in Northern Alberta and the new West 5 project area. The Company invested $42.8 million in the quarter including $1.4 million in international operations and $9.5 million in marketable securities. A sale of securities in the second quarter resulted in a net profit of $3.0 million. The Company added 4.6 million barrels of energy equivalent ("BOE") of proven and probable reserves during the quarter, converting gas to barrels of energy equivalent at a 10:1 ratio, of which 3.9 million BOE are proven. The Company replaced its production of 1.386 million BOE by 3 times in the quarter compared to the additions of the proven and one-half of the probable reserves. There was approximately $31.5 million invested in Canada, excluding capitalized overhead, resulting in a Canadian finding and on stream cost of $8.02 and $7.36 per BOE on a proven and proven and one-half probable basis respectively, compared to $9.52 and $7.99 for these measures in 1997.

Internationally, seismic operations have commenced at West Esh El Mallaha ("WEEM") in Egypt involving a 200 square kilometer 3-D program and a 400 kilometer 2-D program. The first of three firm wells is scheduled to commence drilling in June using a Sante Fe rig. As announced April 16, an agreement has been entered into whereby a Cabre subsidiary will assign its 50 percent of WEEM and match working capital after all costs and liabilities, resulting in Cabre owning 50 percent of the issued shares of Naftex Energy Corporation, which in turn will own 100 percent of the WEEM concession. Cabre shall appoint a majority of the members of the Naftex Board who in turn will appoint the new officers of Naftex. In addition Cabre will receive 10 million warrants as well as additional warrants equal to the number of stock options which survive closing. Subject to due diligence, closing is scheduled to occur no later than June 30. The transition will resolve operatorship issues, provide funding for most of the 1998 program, reduce overhead and align shareholder interest. The Naftex Board shall also appoint 4 of 8 directors to ESHPETCO, which is a joint company formed to operate WEEM, pursuant to Egyptian laws, with the Egyptian General Petroleum Corporation ("EGPC"). The discovery well Rabeh-1 continues to produce with a high water cut of approximately 48 percent at a stabilized rate of approximately 400 barrels per day of oil. ESHPETCO plan to tie in Rabeh-East No. 1 in the next 30-60 days and workover Rabeh-1 in an attempt to shut off the water, which is believed to be coming from the lowermost set of perforations in the Nukhul zone, prior to the onset of new drilling operations. The lowermost Matulla formation, which tested 1,570 bopd, has yet to be produced at Rabeh-1.

Cabre Maroc Limited, a Cabre subsidiary, has retained IMC Geophysics Limited of England to shoot approximately 450 km of vibroseis 2D data over Cabre's 6,000 square kilometers of permits in Morocco. It is expected that IMC will be mobilizing in June and complete the program by October. There are several drillable anomalies in the permit lands delineated on the existing data and subject to timely and cost effective consumables procurement, two wells may be drilled in 1998 and additional wells in 1999.

The Company is on target towards investing $80 million in Canada and $15 million internationally in 1998. This should result in approximately 140 gross wells in Canada and 4-8 internationally.

The Company's Annual General Meeting will be held at 15:30, Thursday, May 21, 1998.

CONTACT: Cabre Exploration Ltd.

Harry B. Wheeler, 403/231-8800

or

Cabre Exploration Ltd.

J. Douglas Kay, 403/231-8800