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END - Endeavour Reports 470 Percent Increase in Reserves and 2006 Fourth-Quarter and Year-End Financial Results
Monday March 5, 6:22 pm ET


HOUSTON, March 5 /PRNewswire-FirstCall/ -- Endeavour International Corporation (Amex: END - News) announced today fourth-quarter and full-year financial and operational results that included a 470 percent increase in proved plus probable reserves.



The company's oil and gas proved plus probable reserves increased to 29.6 million barrels of oil equivalent (BOE) as of December 31, 2006 from 6.3 million BOE at year-end 2005. The increase was driven by both acquisitions and successful exploration during the year.

"Endeavour was transformed in 2006 from a start-up entity to a balanced exploration and production company with substantial growth in production and cash flows expected in 2007," said William L. Transier, chairman, chief executive officer and president. "Our reserve base increased almost five-fold with the acquisition of interests in UK fields and two exploratory discoveries during the year. We will launch our 2007 exploration campaign in the second quarter and anticipate aggressively moving forward with four development projects."

Revenues for the fourth quarter were $31.3 million compared to revenues of $11.0 million for the same period in 2005. Production for the quarter was 595,000 BOE, an increase from 205,000 BOE for the fourth quarter of 2005. Revenues for full-year 2006 were $54.1 million, up from $38.7 million the previous year. Production for the year increased 33 percent from 760,000 BOE in 2005 to 1.01 million BOE. The increase was primarily due to two months of production from the purchase of interests in seven producing fields in the United Kingdom in the fourth quarter of 2006.

The company reported a fourth-quarter operating profit of $5.4 million compared to an operating loss of $17.2 million for the same quarter in 2005. For the full-year 2006, Endeavour recorded an operating loss of $4.3 million compared to an operating loss of $28.0 million for 2005.

A net loss to common stockholders of $6.7 million or $0.06 per diluted share was recorded in the fourth quarter compared to a loss of $25.6 million or $0.34 per diluted share in the same period of 2005. For the full-year 2006, the company recorded a net loss to common stockholders of $8.8 million or $0.10 per diluted share as compared to a loss of $31.5 million or $0.42 per diluted share for the full-year 2005.

Significant events for the company include:

Increased production from acquisition of interests in the United Kingdom - Endeavour gained a position in seven producing oil and gas fields in the Central North Sea with a purchase of assets during the fourth quarter. Combined with production from its Njord and Brage interests in Norway, the company is currently producing approximately 10,000 barrels of oil equivalent per day (BOEPD).

Exploration success and ongoing progress with exploration campaign - Endeavour participated in the drilling of three wells during 2006, two of which were discoveries. Drilling will commence for the 2007 exploration program in the second quarter.


* Cygnus, Block 44/12, Southern Gas Basin -- The well successfully
tested as a gas discovery in one fault block of a potential multiple
fault block accumulation. The well extended northward the limit of
gas-bearing sands in the Leman sandstone in the Rotliegend formation.
Endeavour holds a 12.5 percent interest in the well.
* Columbus, Block 23/16f, Central Graben -- During the fourth quarter,
the company drilled the Columbus prospect and encountered a material
gas column that tested at 17.5 million cubic feet of gas and 1,060
barrels of condensate per day. Endeavour operated the drilling and
testing of the well and holds a 25 percent interest in the license.
* Bacchus, Block 22/6S (N), Central Graben -- Endeavour also
participated in the drilling of an appraisal well on the Bacchus
prospect in the fourth quarter near the Forties Field. The results of
the well were not definitive and evaluations are continuing to
determine commerciality of the field. Endeavour holds a 10 percent
interest in the license.
* Howgate, Block 9/4a, North Viking Graben -- The company has elected
not to exercise its right to take an interest in the Howgate prospect
in Block 9/4a, incurring no capital expenditures for the drilling of
the well.
* Balgownie, Block 30/23b, Central Graben -- The 2007 exploration
program will commence in the second quarter with the drilling of the
Balgownie prospect that will target a Fulmar sand objective.
Endeavour is the operator.

Moved four projects toward development - Endeavour is in final stages of development of the Enoch Field on Block 16/13a that is expected to contribute initial production of 1,000 barrels of oil equivalent per day (BOEPD) in the second quarter of the year. Endeavour holds an eight percent interest in the field. Three other projects are moving toward development that the company estimates will add approximately 4,000 net BOEPD by late 2009.


* Columbus discovery -- Plans for commercialization include the drilling
of an appraisal well during the summer to extend the limits of the
field and establish its production rate potential.
* Cygnus discovery -- The first development well is slated for drilling
at the Cygnus gas discovery around year end.
* Rochelle development -- The company expects to drill a development
well in 2008 at the undeveloped Rochelle discovery. Plans call for
the well to tie-back to a nearby floating production unit. Endeavour
is operator of Rochelle and holds a 55.62 percent interest.

Expanded exploration leasehold position - Endeavour continues to be successful in annual offshore licensing rounds held in the UK and Norway. Total leasehold position held by the company is approximately 2.4 million acres in the UK and Norwegian sectors of the North Sea and in the Irish Sea.


* UK 24th Seaward Licensing Round - The UK Department of Trade and
Industry awarded the company eight licenses covering 10 blocks, five
of which will be operated by Endeavour.
* Awards in Predefined Areas (APA Round) - Endeavour was awarded five
production licenses on the Norwegian Continental Shelf in the license
round conducted by the Ministry of Petroleum and Energy. It will serve
as operator of two licenses with a non-operated ownership in the three
other licenses.
* Slyne-Erris-Donegal Bid Round - The Department of Communications,
Marine and Natural Resources in Ireland granted Endeavour a frontier
exploration license covering an area in the Donegal Basin of the Irish
Sea.

Guidance on Year 2007 Estimates
The table below sets forth the current estimates of the company's operating statistics for the full year ending December 31, 2007. These estimates are based on the historical operating performance and trends, estimates of oil and gas reserves as of December 31, 2006 and planned capital and operating budget for 2007.


2007 Estimated Average Production (A)

Daily Production (boepd) 8,800 to 9,200
Oil Price Differentials (B) $(3.00)

Gas Percentage of Total 38%
Gas Price Differentials (B) $(0.35)

Lease operating expense (per barrel) $12-13

(A) Actual results may differ materially from these estimates.

(B) For purposes of the 2007 estimates, assumptions of price
differentials are based on location, quality and other factors,
excluding the effects of derivative financial instruments. Gas
price differentials are stated as premiums (discounts) from National
Balancing Point pricing, and oil price differentials are stated as
premiums (discounts) from Dated Brent pricing.

Earnings Conference Call Tomorrow, Tuesday, March 6, at 9:00 A.M. CST (10:00 A.M. EST)

Endeavour will host an analyst conference call tomorrow at 9:00 a.m. Central Standard Time (10:00 a.m. EST) to discuss 2006 financial and operational results and update business plans for 2007. To participate and ask questions during the conference call, dial 1-800-811-0667 (U.S., toll- free) or 913-981-4901 (international), pass code: 6402450. To listen only to the live audio web cast via the Internet access Endeavour's internet home page at http://www.endeavourcorp.com . A replay will be available by dialing toll free 1-888-203-1112 (U.S.) or 719-457-0820 beginning at 12:00 p.m. Central time on March 6 through 12:00 p.m. Central time on March 13, 2007.

Endeavour International Corporation is an international oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea. For more information, visit http://www.endeavourcorp.com .

Certain statements in this news release should be regarded as "forward- looking" statements within the meaning of the securities laws. These statements speak only as of the date made. Such statements are subject to assumptions, risk and uncertainty. Actual results or events may vary materially.

The Securities and Exchange Commission has generally permitted oil and gas companies in their filing to disclose only proved reserves a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. The use of the term "probable" reserves is prohibited in SEC filings as these volumes are only potentially recoverable through additional drilling or recovery techniques. These estimates are by their nature more speculative than estimates of proved reserves and are subject to substantially greater risk of being realized by the company.




Endeavour International Corporation
Comparative Condensed Statements of Operations
(Amounts in Thousands, Except per Share Data)

Quarter Year
Ended December 31, Ended December 31,
2006 2005 2006 2005

Revenues $31,284 $11,011 $54,131 $38,656

Cost of Operations:
Operating expenses 7,856 4,047 15,568 11,990

Depreciation, depletion
and amortization 12,262 2,477 20,164 9,337
Impairment of oil
and gas properties --- 17,723 849 27,116
Equity loss from entities
with oil and gas properties --- --- --- 79
General and administrative 5,728 3,967 21,924 18,223
Total Expenses 25,846 28,214 58,505 66,745

Operating Profit (Loss) 5,438 (17,203) (4,374) (28,089)

Other (Income) Expense:
Unrealized gain
on derivative instruments (17,380) --- (34,531) ---
Interest expense 4,558 1,207 7,941 4,322
Litigation settlement expense
--- 5,265 --- 5,265
(Gain) loss on sale of oil
and gas interests --- --- --- (14,966)
Other (income) expense 6,587 (465) 5,141 (2,868)

Total Other (Income) Expense (6,235) 6,007 (21,449) (8,247)

Income (Loss) Before
Minority Interest
11,673 (23,210) 17,075 (19,842)
Minority Interest --- --- --- (470)

Income (Loss) Before Income Taxes 11,673 (23,210) 17,075 (20,312)
Income Tax Expense 16,526 2,346 23,913 11,061

Net Loss (4,853) (25,556) (6,838) (31,373)
Preferred Stock Dividends (1,873) (39) (1,991) (158)

Net Loss to Common Stockholders $(6,726) $(25,595) $(8,829) $(31,531)

Net Loss Per Common Share -
Basic and Diluted $(0.06) $(0.34) $(0.10) $(0.42)

Weighted Average Number of
Common Shares Outstanding -
Basic and Diluted 107,726 75,471 86,636 74,433



Endeavour International Corporation
Comparative Condensed Consolidated Balance Sheets
(Amounts in Thousands)

December 31,
2006 2005
Assets
Current Assets:
Cash and cash equivalents $39,814 $76,127
Accounts receivable 61,104 4,876
Prepaid expenses and other current assets 27,650 8,070
Total Current Assets 128,568 89,073

Property and Equipment, Net 319,315 59,084
Goodwill 291,752 27,795
Restricted Cash --- 2,304
Other Assets 34,835 8,710
Total Assets $774,470 $186,966

Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $36,928 $18,194
Current maturities of debt 2,410 ---
Accrued expenses and other 41,799 21,240
Total Current Liabilities 81,137 39,434

Long-Term Debt 303,840 81,250
Deferred Taxes 115,155 19,185
Other Liabilities 32,510 6,753
Total Liabilities 532,642 146,622

Convertible Preferred Stock 100,657 ---

Stockholders' Equity 141,171 40,344
Total Liabilities and Stockholders' Equity $774,470 $186,966



Endeavour International Corporation
Comparative Condensed Consolidated Statements of Cash Flows
(Amounts in Thousands)

Year Ended
December 31,
2006 2005

Cash Flows from Operating Activities:
Net loss $(6,838) $(31,373)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation, depletion and amortization 20,164 9,337
Impairment of oil and gas properties 849 27,116
Deferred tax expense 13,038 3,243
Amortization of non-cash compensation 11,573 7,070
Unrealized gain on derivative instruments (34,531) ---
Litigation settlement expense --- 5,265
Gain on sale of assets --- (14,966)
Other operating activities 6,408 567
Increase (decrease) in net assets
and liabilities (24,763) 21,703
Net Cash Provided by (Used in)
Operating Activities (14,100) 27,962

Cash Flows From Investing Activities:
Capital expenditures (55,496) (47,552)
Acquisitions, net of cash acquired (376,915) (1,437)
Proceeds from sale of assets --- 19,465
Other investing activities 5,293 (5,448)
Net Cash Used in Investing Activities (427,118) (34,972)

Cash Flows From Financing Activities:
Proceeds from (repayments of) borrowings, net 225,000 77,244
Issuance of common and preferred stock, net 184,624 ---
Financing costs paid (9,565) (3,661)
Proceeds from common and preferred
stock issued and issuable 3,310 ---
Other financing --- 1,828
Net Cash Provided by Financing Activities 403,369 75,411

Net Increase (Decrease) in Cash
and Cash Equivalents (37,849) 68,401
Effect of Foreign Currency Changes on Cash 1,535 (1,249)
Cash and Cash Equivalents, Beginning of Period 76,127 8,975

Cash and Cash Equivalents, End of Period $39,813 $76,127



Endeavour International Corporation
Operating Statistics

Quarter Year
Ended Ended
December 31, December 31,
2006 2005 2006 2005

United Kingdom:
Oil and condensate sales (Mbbl) 209 --- 209 ---
Oil and condensate price,
before hedging ($ per Bbl) 49.88 --- 49.88 ---
Oil and condensate price,
after hedging ($ per Bbl) 49.88 --- 49.88 ---
Gas sales (MMcf) 1,539 --- 1,539 ---
Gas price, before and
after hedging ($ per Mcf) 9.38 --- 9.38 ---

Norway:
Oil and condensate sales (Mbbl) 119 196 508 726
Oil and condensate price,
before hedging ($ per Bbl) 59.43 57.78 64.89 54.92
Oil and condensate price,
after hedging ($ per Bbl) 49.88 53.74 54.12 51.74

Gas sales (MMcf) 60 52 203 184
Gas price, before and
after hedging ($ per Mcf) 8.06 8.83 8.75 6.06

Total:
Oil and condensate sales (Mbbl) 328 196 717 726
Oil and condensate price,
before hedging ($ per Bbl) 53.33 57.78 60.51 54.92
Oil and condensate price,
after hedging ($ per Bbl) 49.88 53.74 52.88 51.74

Gas sales (MMcf) 1,599 52 1,742 184
Gas price, before and
after hedging ($ per Mcf) 9.33 8.83 9.30 6.06




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Source: Endeavour International Corporation