Bill Barrett Reports Record Earnings for 2006, Q4 Profit Down

Bill Barrett Corp. on Tuesday reported its full-year operating results for 2006 that were highlighted by:

--Production growth of 32% to 52.1 Bcfe
--Proved reserve growth of 26% to 428 Bcfe
--Proved, probable, and possible resources of 2 Tcfe
--Record discretionary cash flow (1) of $239 million; $5.39 per diluted share
--Record net income of $62 million; $1.40 diluted EPS
--Organic Finding and Development Costs (2) of $2.44 per Mcfe

As previously announced, oil and gas production for 2006 was 52.1 Bcfe compared to 39.4 Bcfe in 2005. Including hedging effect, the Company's average realized sales price for oil and gas production in 2006 was $6.60 per Mcfe compared to an average realized sales price in 2005 of $7.21 per Mcfe. In the fourth quarter of 2006, production was 14.2 Bcfe, a 13% increase over the prior quarter and a 15% increase over the year earlier period. For the fourth quarter of 2006, realized prices were $6.21 per Mcfe compared to $8.89 per Mcfe in the fourth quarter of 2005. Proved reserves at December 31, 2006 were 428 Bcfe compared to 341 Bcfe at year end 2005, while probable and possible resources increased to 1.6 Tcfe at year end 2006 from 1.1 Tcfe at year end 2005.

For 2006, discretionary cash flow (1), a non-GAAP measure defined below, was $239 million, a 23% increase over 2005. Discretionary cash flow (1) for the fourth quarter of 2006 was $62 million, a $19 million decrease from the comparable period in 2005. On a per diluted share basis, discretionary cash flow (1) was $5.39 for the year ended 2006, a 20% increase over the previous year.

Net income for 2006 was $62 million compared to net income in 2005 of $24 million. In the fourth quarter of 2006, net income was $11 million compared to net income of $23 million in the fourth quarter of 2005. Both discretionary cash flow (1) and net income decreased in the fourth quarter of 2006 compared to the fourth quarter of 2005 primarily due to lower natural gas prices. Diluted earnings per share were $1.40 in 2006 compared to $0.55 in 2005.

Fred Barrett, Chairman and Chief Executive Officer, commented: "2006 was a record year for us in terms of production, reserves, cash flow, net income, and organic finding and development costs. We are excited to continue this momentum into 2007 with a $425-$450 million capital budget that allocates approximately 70-75% to our development projects in West Tavaputs, Piceance, and Powder River Basin, where we believe we can achieve significant organic production growth in the coming years with improved F&D and returns. We are spending the remainder of the capital budget delineating established discoveries at West Tavaputs deep, Lake Canyon/Blacktail Ridge, and Cave Gulch, and drilling potential high impact exploration plays in Montana Overthrust, Big Horn, Paradox and Uinta."

Capital Expenditures

The Company announced that its previously estimated capital expenditures (excluding acquisitions) for 2006 were lower than reported and actually totaled $377 million, which was comprised of $34 million for the acquisition of undeveloped properties and land, $332 million for drilling, development, exploration, and exploitation of natural gas and oil properties, $9 million for geologic and geophysical costs, and $2 million for equipment and other expenditures. Additionally, the acquisition of CH4 Energy Corporation for Powder River Basin properties in May 2006 totaled $79 million. The Company received $78 million from the sale of certain properties in the Powder River Basin and other proceeds from industry partners related to joint exploration projects. The capital expenditures referred to in this press release do not include any amounts associated with properties acquired for other than cash or non-cash deferred taxes related to the CH4 acquisition, which totaled $46 million and are included in the Company's costs incurred analysis in its Notes to the Financial Statements in its Form 10-K for the year ended December 31, 2006. The following table lists the capital expenditures and wells spud by basin for 2006.

                         Capital Expenditures
                       (excluding acquisitions)
    Basin                    (in millions)           Wells spud (gross)
    Piceance                      $138                       68
    Uinta                          120                       36
    Wind River                      35                        2
    Powder River                    23                       99
    Williston                       31                       13
    Other                           30                        6
      Total                       $377                      224

Operating and Drilling Update

Uinta Basin, Utah

West Tavaputs - The Company increased production by 209% in 2006 compared to 2005 due to an active drilling program, improved well performance, and added compression and processing capacity. Current production in the area is 75 MMcfd (gross) and continues to be compression constrained. The Company expects to add two additional compressors in late March, and drill a total of 29 shallow (Wasatch and Mesaverde) wells during 2007.

The Company recently finished drilling the Peter's Point 2-12D well, its second offset to its deeper discovery well in the Dakota, Entrada, and Navajo formations and expects to begin completion operations in March. The Company expects to drill an additional three deep West Tavaputs wells in 2007.

Lake Canyon/Blacktail Ridge - The Company recently began testing two offsets to its oil discovery in the Wasatch formation at Lake Canyon. The Company expects to drill 18 Wasatch wells in 2007 on these properties.

Piceance Basin, Colorado

The Company increased production by 179% in 2006 compared to 2005 due to an active drilling program and improved completion performance. The Company currently is operating a three rig program in the area, and plans to drill 96 wells in 2007, including several 10-acre pilot programs.

Powder River Basin, Wyoming

Company production in the Powder River Basin decreased by 17% in 2006 compared to 2005 as a result of Wyodak production declines not being offset by Big George wells coming on production due to dewatering timing. The Company continues to see gradual gas production increases in its Cat Creek Big George area, which is fully drilled and in the later phases of dewatering. The Company expects to increase activity in 2007 by drilling 229 wells in its development program in this area.

Paradox Basin, Colorado

The Company recently began testing the first of two exploratory tests drilled to the Gothic shale in the Yellow Jacket prospect. After extensive core analysis, the Company set casing, began fracture stimulation operations and currently is evaluating results. The Company intends to drill two additional exploratory tests in 2007.

Big Horn Basin, Wyoming

Recompletion operations recently began on the Sellers Draw #1 well, where we expect to perforate and fracture stimulate five different zones in the Mesaverde formation.

Hedging The Company currently has approximately 65% of its estimated 2007 production hedged with a weighted average floor of $6.02 MMBtu and approximately 27% of its estimated 2008 production hedged with a weighted average floor of $6.62 MMBtu.

Bill Barrett Corporation, headquartered in Denver, explores for and develops natural gas and oil in the Rocky Mountain region of the United States.