First Calgary Petroleums Reports First Quarter Results

First Calgary Petroleums reports financial results for the three months ended March 31, 2005.

Management's Discussion and Analysis

Management's discussion and analysis ("MD&A") should be read in conjunction with the unaudited interim financial statements for the three months ended March 31, 2005 and 2004 and the audited financial statements and MD&A for the year ended December 31, 2004. In this discussion and analysis $ refers to the U.S. dollar and C$ refers to the Canadian dollar. Additional information is available on FCP's website at www.fcpl.ca or on SEDAR's website at www.sedar.com.

FCP operates in Algeria where it has the rights to explore and appraise two large acreage blocks, Ledjmet Block 405b and Yacoub Block 406a. The Company's rights and obligations are set out in hydrocarbon agreements with Sonatrach, the national oil company of Algeria, which represents the interest of the state.

Hydrocarbon Agreements

The hydrocarbon agreements require FCP to conduct certain drilling and seismic activities over periods of time. The exploration and appraisal phases of the agreements that extend for five years are divided into two periods with each period containing a minimum work commitment. In each agreement, the first period was for three years, and the Company then had the option to enter a second exploration period of two years. Following the exploration and appraisal phase of each agreement, the Company and Sonatrach will obtain exploitation permits for any reserves determined to be commercial and all lands not subject to an exploitation permit will be returned to the government.

Ledjmet Block 405b

On Block 405b, FCP is party to a Production Sharing Contract (PSC) with Sonatrach. The PSC allocates hydrocarbon production between FCP and Sonatrach in accordance with a sliding scale formula based on such factors as production levels, product prices and project investment. Pursuant to the formula, the Company's annual share of production may range from 27.72 percent to 8.16 percent. All Algerian state royalties and income taxes are paid by Sonatrach from its share of hydrocarbon production.

The Company is in the first year of the second exploration period. The remaining work commitment for the second exploration period includes drilling one exploration well prior to December 2006, estimated to cost $9 million. If the Company fails to satisfy this work obligation, the rights, other than for which an exploitation permit has been granted or requested, will be returned and the Company will be liable to pay Sonatrach a penalty of $6.25 million.

Yacoub Block 406a

On Block 406a, FCP has a Joint Venture Agreement (JVA) with Sonatrach. The JVA allocates 49 percent of the hydrocarbon production or equivalent volume thereof to the Company. FCP is responsible for paying Algerian state royalties and income taxes on its share of production. A portion of the total recoverable natural gas reserves above a certain threshold will be considered strategic reserves and excluded by Algerian law from the JVA.

The Company is in the second exploration period of the JVA, which will end in November 2005. The remaining second period exploration period work commitment is to finish drilling the ZCHW-1 exploration well and drill one additional exploration well, RTN-1, having a combined estimated cost of $16 million. If the Company fails to satisfy this work obligation, the rights, other than for which an exploitation permit has been granted or requested, will be returned and the Company will be liable to pay Sonatrach a penalty of $12.75 million.

Capital Expenditures

Capital expenditures for the three months ended March 31, 2005 totaled $12.5 million compared to $14.2 million in the first three months of 2004. Of the 2005 expenditures:

	    -  $9.7 million related to production testing the LES-2 well, drilling
	       the MLE-6 well and site preparation costs for the 2005 Block 406a
	       exploration wells;

	    -  $0.9 million was spent completing the 2004 Block 406a 3D seismic
	       programme;

	    -  $0.3 million was attributed to annual training bonuses; and

	    -  $1.6 million related to administrative and support services for the
	       Algerian operations.

	    Liquidity and Capital Resources

FCP continues to rely on equity to fund its operations and capital programmes. During the quarter ended March 31, 2005, the Company received $0.4 million in proceeds for the issuance of 504,377 common shares from the exercise of options and warrants. The fully-diluted number of shares outstanding was 191,684,961 at the following dates:

	                                          May 6,     March 31,   December 31,
	    FULLY-DILUTED SHARES OUTSTANDING       2005         2005        2004
	    -------------------------------------------------------------------------
	    Common shares                      183,605,460  183,591,052  183,086,675
	    Employee stock options               7,629,501    7,629,501    7,629,501
	    Common share purchase warrants               -       14,408       68,785
	    Non-employee stock options             450,000      450,000      900,000
	    -------------------------------------------------------------------------
	    Fully-diluted shares outstanding   191,684,961  191,684,961  191,684,961
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------

The Company had working capital of $38 million at March 31, 2005 compared to $52.1 million at December 31, 2004. Changes in the Company's working capital are primarily a function of the timing and magnitude of its equity financings and capital expenditures. The reduction in working capital in the three months ended March 31, 2005 is attributed to $12.5 million of capital expenditures, $0.4 million in proceeds from the exercise of options and warrants, $0.5 million used to fund operations and a foreign currency charge of $1.5 million.

The Company has sufficient working capital at March 31, 2005 to fund its capital programme and work commitments. Beyond the current planned expenditures and obligations, it is expected the Company will require additional capital to fund future operations and capital spending. In addition, the development of the Company's reserves through to commercial production will require significant funding that is expected to be in the form of equity, joint ventures or some combination thereof.


	    Operating Results and Selected Quarterly Information

	                          2005                       2004
	    (000's of U.S.
	    dollars)               Q1         Q4         Q3         Q2         Q1
	    -------------------------------------------------------------------------
	    Interest Income     $    659   $    386   $    251   $    238   $    415
	    -------------------------------------------------------------------------
	    Expenses
	      General and
	       administrative      1,139      1,165        904      1,048        910
	      Stock-based
	       compensation          746      1,442        975      1,375      1,389
	      Foreign exchange
	       loss (gain)         1,527       (820)    (2,151)     1,137        292
	      Write-off Yemen
	       investment              -          -          -          -          -
	      Earthquake
	       donation                -          -          -          -          -
	      Other expenses
	       (recovery)            (33)      (102)       109         92         90
	    -------------------------------------------------------------------------
	                           3,379      1,685       (163)     3,652      2,681
	    -------------------------------------------------------------------------
	    Income (loss)         (2,720)    (1,299)       414     (3,414)    (2,266)
	    Loss per share         (0.01)     (0.01)      0.00      (0.02)     (0.01)

	    Share capital        377,857    377,288    172,895    172,376    171,897

	    Working capital
	     (deficiency)         38,016     52,115     19,858     48,664     74,659

	    Capital assets       322,572    310,053    137,911    107,267     82,886

	    Other liabilities       (370)      (339)      (239)      (174)      (151)
	    -------------------------------------------------------------------------
	    Shareholders'
	     equity             $360,218   $361,829   $157,530   $155,757   $157,394
	   -------------------------------------------------------------------------


	    (000's of U.S.                     2003
	    dollars)                 Q4         Q3         Q2
	    ---------------------------------------------------
	    Interest Income     $    315   $     81   $    118
	    ---------------------------------------------------
	    Expenses
	      General and
	       administrative        962        660        539
	      Stock-based
	       compensation        3,579        233        214
	      Foreign exchange
	       loss (gain)          (283)      (192)       633
	      Write-off Yemen
	       investment          1,035          -          -
	      Earthquake
	       donation                -          -      1,000
	      Other expenses
	       (recovery)            253         34         97
	    ---------------------------------------------------
	                           5,546        735      2,483
	    ---------------------------------------------------
	    Income (loss)         (5,231)      (654)    (2,365)

	    Loss per share         (0.03)     (0.01)     (0.02)

	    Share capital        165,181     62,463     62,295

	    Working capital
	     (deficiency)         83,111     (1,150)    10,383

	    Capital assets        68,708     52,106     41,061

	    Other liabilities       (124)       (92)       (91)
	    ---------------------------------------------------
	    Shareholders'
	     equity             $151,695   $ 50,864   $ 51,353
	    ---------------------------------------------------

Interest and other income increased to $0.6 million in the three months ended March 31, 2005 as a result of higher average cash and term-deposit balances on hand in the quarter from the December 2004 equity financing.

General and administrative expenses were $1.1 million in the three months ended March 31, 2005 compared with $0.9 million in the comparable 2004 period. The increase is primarily attributed to additional resources required for the operation of the Algerian petroleum and natural gas projects, including employee levels, administrative support and travel, and expenses related to the strategic review process.

Stock-based compensation expense was $0.7 million in the three months ended March 31, 2005 compared with $1.4 million in the comparable 2004 period. The decrease in expense is primarily attributed to fewer options granted in 2004.

The Company recorded a foreign exchange loss of $1.5 million during the three months ended March 31, 2005. The loss primarily resulted from the effects of the strengthening U.S. dollar against Canadian dollar and British pound deposits held during the quarter.

Business Risks and Uncertainties

The MD&A for the year ended December 31, 2004 includes an overview of certain of the business risks and uncertainties facing the Company. Those risks remain in effect as at March 31, 2005.

Outlook

Operationally, the Company is proceeding with the drilling of two exploration wells on Block 406a and planning for further drilling and development work on Block 406a and Block 405b. As previously announced, FCP continues to work with its advisers to evaluate strategic alternatives.

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