Antrim Posts First-quarter Loss

Antrim Energy Inc. on Wednesday issued its interim financial report for the first quarter of 2007.

Antrim made significant progress in the first quarter advancing drilling programs in the United Kingdom and Argentina. For the remainder of the year, Antrim expects to be drilling multiple targets in several of the Company's license areas. Antrim's strong balance sheet provides confidence the Company has the financial resources to complete its 2007 drilling program in the United Kingdom and Argentina as planned.

In the United Kingdom, preparations are complete for the drilling of three wells designed to evaluate the potential of the Central Causeway fault compartment and appraise previous discoveries on the structure. Acquisition of 3D seismic over the Fyne and Dandy oil fields has commenced and plans are underway to drill the non-operated East Kerloch prospect on Block 211/22a northwest.

In Argentina, production over the comparable period in 2006 has increased significantly following the Company's successful 2006 drilling program in Tierra del Fuego. Further growth is planned based on the interpretation of 3D seismic acquired in 2006, the acquisition of new 3D seismic in the first quarter of 2007 and the contracting of drilling rigs for both the Tierra del Fuego and Medianera licenses.

OVERVIEW OF OPERATIONS

United Kingdom - Block 211/22a South East and Block 211/23d ('Causeway')

Antrim intends to follow-up its 2006 East Causeway discovery on Block 211/23d with a drilling program of up to three wells commencing in May 2007. The first well in the program is planned to be drilled in the Central Causeway fault compartment and is intended to appraise each of the Jurassic Tarbert, Ness and Etive Sandstones. Antrim has contracted AGR Peak Well Management of Aberdeen and the semi-submersible drilling rig the Transocean Prospect for the drilling program. Antrim has operatorship and a 65.5% working interest in the southeast area of Block 211/22a and in Block 211/23d.

United Kingdom - Block 211/22a North West

In March 2007, Antrim announced its plans to drill the non-operated East Kerloch prospect in Block 211/22a northwest area in the fourth quarter of 2007. Drilling operations are expected to commence in October 2007. The well is intended to target the oil prone Jurassic Brent Sandstones adjacent to the Cormorant oil field and related infrastructure. The proposed location is approximately 10 km northwest of the Causeway 211/23d-17z well drilled by Antrim in mid-2006. Antrim holds a 21% working interest in the northwest area of Block 211/22a.

United Kingdom - Block 21/28a ('Fyne and Dandy')

In November 2006, Antrim acquired a 75% working interest in Block 21/28a in the Central North Sea. The block contains the Fyne and Dandy oil fields, which have been delineated with eight wells drilled from 1971 to 1998. Antrim is operator of the block and is currently completing the acquisition of a 70 km2 3D seismic program, which began in the second quarter of 2007. A decision on additional drilling will be reached by the fourth quarter of 2007, with a target of early 2008 for drilling the first development well. The cost of the license acquisition in 2006 was US$8 million. Antrim has agreed to pay the seller an additional US$10 million on approval of a field development plan.

Argentina - Tierra del Fuego

Operations in the first quarter of 2007 have focused on infrastructure development and the acquisition of new 3D seismic. Existing gas processing facilities in Tierra del Fuego are not sufficient to process additional volumes created by the new gas discoveries and an expansion of gas processing facilities and installation of a pipeline that will connect the Las Violetas license to the San Martin pipeline is in progress. The expansion, projected for completion in August 2007 and to be fully operational by October 2007, is expected to raise gross gas processing capacity to between 35 and 40 mmcf per day at which time previous gas discoveries are expected to be placed on production. Additional oil pipeline, storage and treatment facilities are also planned for 2007 to enable increased oil production.

In late 2006 and early 2007, the Company and its partners began the acquisition of 309 km2 of 3D seismic over the Angostura and Los Violetas licenses. The 3D seismic program was initiated to expand target areas identified during the Company's successful 2006 drilling program. A drilling rig dedicated to the Tierra del Fuego licenses has been contracted for the next two years. The Company anticipates that drilling on the licenses will recommence in late June 2007. Antrim's working interest in the Tierra del Fuego licenses is 25.78%.

Net production to Antrim from the Tierra del Fuego licenses in the first quarter of 2007 was 1,155 boe per day compared to 574 boe per day in the first quarter of 2006. Net oil production in the first quarter of 2007 was 335 barrels of oil per day compared to 138 barrels of oil per day in the first quarter of 2006. Gas and natural gas liquids ('NGL') production in the first quarter of 2007 was 4.49 mmcf/d and 71 barrels per day, respectively. Gas and NGL production in the first quarter of 2006 was 2.28 mmcf/d and 56 barrels per day, respectively.

Argentina - Medianera

Antrim acquired a 70% working interest in the Medianera production license in February 2006. The Medianera license is located in central Argentina in the Neuquen Basin close to the Medanito and Barranca de los Loros fields. Antrim believes the license has significant exploitation and exploration potential, both uphole and from deeper horizons. In 2006, Antrim acquired 83 km2 3D seismic over the entire license. A drilling rig has been contracted and Antrim expects to commence drilling at least one exploration well on the license targeting the deeper intervals in May 2007.

Net production to Antrim from the Medianera license in the first quarter of 2007 was 25 barrels of oil per day.

Argentina - North West Basin

In September 2006, Antrim completed the acquisition of 330 km2 of 3D seismic in the Puesto Guardian license in northern Argentina. Processing of the seismic data is expected to be completed in May 2007 after which interpretative work will begin. Antrim intends to use the newly acquired seismic to support a drilling program on the license in 2007-2008.

Antrim has a 40% working interest in the Puesto Guardian license.

Net production to Antrim from the Puesto Guardian license in the first quarter of 2007 was 323 barrels of oil per day compared to 357 barrels of oil per day in the first quarter of 2006.

In September 2006, Antrim completed the acquisition of 54 km2 of 3D seismic in the Capricorn license. Processing of the seismic data has been completed and interpretative work has started. Antrim has a 50% working interest in the Capricorn license, subject to the terms of a farm-out agreement entered into in October 2006 with respect to a portion of its interest in the license. At least one exploration well is planned in 2007 subject to confirmation of a suitable drilling location, partner approvals and securing a drilling rig.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following management's discussion and analysis ('MD&A'), dated May 11, 2007, should be read in conjunction with Antrim's unaudited consolidated financial statements for the three month period ended March 31, 2007 and Antrim's MD&A and audited consolidated financial statements for the year ended December 31, 2006. The calculations of barrels of oil equivalent ('BOE') are based on a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. The BOE conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Unless otherwise stated, all dollar amounts are expressed in Canadian dollars.

Financial and Operating Review

Oil, Gas and NGL Revenue

Oil and gas revenue increased to $3,297,875 in the first quarter of 2007 compared to $2,840,821 in the first quarter of 2006. Revenues increased due to an increase in oil and gas production from the Tierra del Fuego licenses.

Net production to Antrim in the first quarter of 2007 was 1,502 boe per day compared to 954 boe per day in the first quarter of 2006. Average net oil production in the first quarter of 2007 was 683 barrels of oil per day compared to 494 barrels of oil per day in the first quarter of 2006. Oil prices averaged $41.38 per barrel in the first quarter of 2007 compared to $50.79 per barrel in the first quarter of 2006. Oil production from both the Puesto Guardian and Tierra del Fuego licenses is sold with reference to the price of West Texas Intermediate ('WTI') crude oil less a quality discount. Domestic oil sales are subject to a mandated discount which increases as the price of WTI crude oil increases. Oil exports are subject to an export tax introduced in the fourth quarter of 2006.

Average net gas production in the first quarter of 2007 was 4.49 mmcf per day compared to 2.42 mmcf per day in the first quarter of 2006. Gas volumes increased significantly following completion in July 2006 of a 10 km high pressure gas pipeline. Sales gas prices in Argentina averaged $1.46 per mcf in the first quarter of 2007 compared to $1.24 per mcf in the first quarter of 2006. Gas production from the Tierra del Fuego licenses is sold to domestic residential and industrial consumers under fixed price contracts. The price of gas sold to industrial consumers increased in 2006 and has continued to increase, from US$1.32 per mcf for certain industrial gas contracts in the fourth quarter of 2006 to over US$1.60 per mcf in the first quarter of 2007. The price of gas sold to residential consumers is not anticipated to increase above the current price of US$0.36 per mcf. Approximately 75% of gas production is currently sold to industrial consumers.

Average net NGL production in the first quarter of 2007 was 71 barrels per day compared to 56 barrels per day in the first quarter of 2006. NGL prices averaged $25.98 per barrel in the first quarter of 2007 compared to $43.65 per barrel in first quarter of 2006. NGL prices declined following the introduction of an export tax in the fourth quarter of 2006.

On October 11, 2006, resolution 776/2006 was published in Argentina by the Ministry of Economy and Production setting forth its position that export taxes initially announced as an emergency measure in January 2002 were applicable on oil, gas and natural gas liquids exports from Tierra del Fuego. The export tax introduced in October 2006 on crude oil exports is 45% if WTI is US$45 barrel or above. The export tax on NGL exports is 20%. Antrim has filed an appeal of the resolution introducing the export tax, a subsequent resolution deeming it retroactive to January 2002 and an injunction to prevent collection of the export tax on a retroactive basis. In February 2007, a court granted the injunction pending the outcome of appeals. On January 16, 2007, the Argentina government issued Law 26,217 which extended all export taxes for a further five years and specifically included exports from Tierra del Fuego. At present substantially all oil and NGL production is exported.

Netbacks

An increase in gas production and corresponding change in sales mix resulted in a lower wellhead price and lower netback per BOE. Antrim realized a per unit netback of $15.12/BOE in the first quarter of 2007 compared to a per unit netback of $20.67/BOE for the first quarter of 2006. The table below provides a comparative analysis of field netbacks for the three months ended March 31, 2007 and 2006.

General and Administrative

General and administrative ('G&A') costs increased in the first quarter of 2007 to $1,509,009 compared to $647,631 in the first quarter of 2006. During the period, Antrim also capitalized $603,266 (2006 - $254,940) of G&A costs related to exploration and development activity primarily in Argentina and the United Kingdom. G&A costs increased in 2007 due to greater corporate activity, increased project costs including costs involved in preparing to bring the Causeway discovery to production, a 60% increase in full-time employees and rising salary and other personnel costs within the oil and gas industry.

Foreign Exchange Loss

The Company incurred a foreign exchange loss in the first quarter of 2007 of $555,455 compared to $24,683 in the first quarter of 2006. The Company's reporting is in Canadian dollars whereas a significant amount of the Company's activities are transacted in or referenced to US dollars or Pounds Sterling. The Company purchased in the first quarter of 2007 a portion of its expected US dollar requirements to secure a drilling rig in the UK North Sea and planned capital expenditures in Argentina. The Company also purchased a portion of its expected Pound Sterling requirements for long lead items with respect to its upcoming drilling program in the UK North Sea. The purchases were made to reduce the Company's exposure to a fall in the value of the Canadian dollar relative to US dollars and Pounds Sterling and provide the Company with some certainty as to the cost, in Canadian dollars, of its planned 2007 capital expenditure program.

Cash Flow and Net Income (Loss)

Antrim generated cash flow from operations in the first quarter of 2007 of $608,221 ($0.01 per share) compared to cash flow from operations of $1,243,453 ($0.02 per share) in the first quarter of 2006. Net loss in the first quarter of 2007 was $1,269,302 ($0.01 per share) compared to a net income of $545,991 ($0.01 per share) in the first quarter of 2006. Net loss increased due to increased general and administrative costs, stock based compensation expense, higher depletion and higher foreign exchange losses.

Financial Resources and Liquidity

At March 31 2007, Antrim had working capital of $75,816,102 (December 31, 2006 - $55,391,981) including cash of $75,636,840 (December 31, 2006 - $53,714,443) and no debt. Working capital increased following the exercise in the first quarter of 2007 of warrants issued by the Company in September 2005.

On May 11, 2007, Antrim completed a public offering of 10,000,000 common shares at a price of $5.00 per common share. An over-allotment option to issue an additional 1,500,000 common shares at a price of $5.00 per share was also exercised. Total gross proceeds from the financing, including over-allotment option, were $57,500,000.

The Company has several significant capital expenditures planned for 2007. The majority of the Company's capital spending is expected to be in the United Kingdom where the Company plans to participate in drilling four wells during the year and incur certain early development costs with respect to its Causeway prospect. Cash flow from operations in Argentina is expected to be reinvested in Argentina during the year. Additional corporate investment in Argentina will also be required in 2007 to complete all of the drilling and infrastructure development planned in Argentina. Funds for the continued development of the Company's projects are expected to be from combinations of existing working capital, new equity and debt instruments.

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