Zapata Sets 2006 Capital Budget at $42 Million

Zapata Energy has received board approval for its 2006 capital budget and guidance. The Corporation's capital budget has been set at $42.0 million to drill up to 71 (68 net) wells. The budget includes $8.0 million for land and seismic expenditures. The majority of the drilling budget will be spent further exploring and developing Zapata's holdings. Drilling will be split evenly between gas and medium to light oil. With one drilling rig already committed to Zapata for 2006, the Corporation believes its access to rigs will be more than adequate to complete its program. The Corporation expects to have up to three rigs active at any one time during the year. Zapata anticipates its cash flow and existing credit facility will be sufficient to fully fund its capital program.

Zapata has received board approval for its 2006 capital budget and guidance. The Corporation's capital budget has been set at $42.0 million to drill up to 71 (68 net) wells. The budget includes $8.0 million for land and seismic expenditures. The majority of the drilling budget will be spent further exploring and developing Zapata's holdings. Drilling will be split evenly between gas and medium to light oil. With one drilling rig already committed to Zapata for 2006, the Corporation believes its access to rigs will be more than adequate to complete its program. The Corporation expects to have up to three rigs active at any one time during the year. Zapata anticipates its cash flow and existing credit facility will be sufficient to fully fund its capital program.

During the fourth quarter of 2005, Zapata drilled 15 (15 net) wells, resulting in six oil wells, eight gas wells and one abandonment. For the year 2005, Zapata drilled or participated in drilling 42 (27 net) wells, resulting in 31 (16 net) gas wells, nine net oil wells and two abandonments for a 95 percent overall success rate.

The Corporation's forecasted average daily production for the year ended December 31, 2006 is 4,000 to 4,400 boe/d. This forecast assumes a 70 percent drilling success rate and timely well tie-ins while taking estimated decline rates into account. Current field estimated production fluctuates between 3,300 and 3,400 boe/d. Additional production from Zapata's fourth quarter 2005 drilling program awaits tie-in. Zapata's estimated average production sales for the year ended December 31, 2005 rose to 3,000 boe/d from 2790 boe/d in 2004.

Zapata has a drilling inventory in excess of 100 locations on 57,526 (38,679 net) hectares of undeveloped land or 142,150 (95,578 net) acres. The Corporation actively seeks to expand its land and production base through corporate and property acquisitions which are not included in the above capital budget.

Zapata is a junior oil and gas production company operating in western Canada. It trades on the TSX Venture Exchange under the symbol "ZCO".

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