JED Reports Fall in Production Rate by 86%

JED Oil (AMEX: JDO) reported financial results for the three and six months ended June 30, 2007.

Q2, 2007 Compared to Q2, 2006

Exit production rate was down 86% to 260 boe/d from 1,825 boe/d at the close of Q2'06 primarily due to asset sales to fund the purchase of Caribou Resources Corp.; Q2, 2007 revenue decreased 56% to approximately $3.8 million from $8.6 million in the same period last year. First half 2007 revenue decreased 46% to approximately $7.1 million from $13.3 million for the first half of 2006; Funds provided by operating activities increased to approximately $1.3 million from ($16.6) million; Average sales volumes decreased 62% for the quarter and 49% for the six months ended June 30th to 871 boe/d from 2,277 boe/d, and to 901 boe/d from 1,766 boe/d respectively; Net income applicable to common shareholders was $14.6 million for Q2, 2007 and $10.6 million for the six months ended June 30th due to the gain on sale of the Ferrier and Sousa properties. Comparatively, the net income for the same periods of 2006 were $0.468 million for the quarter and $0.446 million for the six months ended June 30th, increases of 3,029% and 2,283%, respectively.

Recent Operating Highlights

JED sold its producing properties in the North Ferrier area of Alberta and a non-operated property at Sousa in Alberta for net proceeds of over $34.2 million; The acquisition of Caribou Resources Corp. was commenced during the second quarter and consummated on July 31, 2007; A settlement of five drilling contracts, which contributed $1.9 million to the loss for the first quarter, also brought in cash of $2.2 million in the second quarter and terminated commitment liabilities of $17.665 million over the next 4 years; Management's efforts to reduce overhead expenses result in a 29% decrease in expenses in the current quarter versus the second quarter of 2006.

Referring to the Caribou acquisition, James Rundell, JED's President stated, "We believe the Caribou assets offer tremendous upside potential with relatively low incremental expenditures. While we were aware that certain assets were partially developed and easily converted into production, our continued review of well files and other information has uncovered significantly more opportunities than we had first thought."

The Caribou acquisition is also a key component to the plan presented to the American Stock Exchange regarding the Company regaining compliance with the AMEX Company Guide. Richard Carmichael, JED's CFO commented, "We have taken some large steps over the last six months to reshape the Company by rebuilding the management team, addressing the cost side of our business, and through asset rationalization, however, the acquisition of Caribou is definitely a highlight so far. The acquisition has provided the type of assets critical to our success over the review period."

Subsequent to June 30, 2007 the Company drilled, completed, and is testing a second well in the West Ferrier area of Alberta. Early tests show that initial production of JED's 80% interest should approach 200 boe/d. The Company plans to spud an additional well in this area before the end of the week. These wells are included in the guidance issued by the Company on June 19, 2007, confirming the production estimates contained therein.

JED's financial statements continue to contain a going concern uncertainty note. The note provides information regarding the Company and outlines the issues the Company faces to remain a going concern.

Legal Action

JED Oil Inc. has received notification of a legal action against it by one of its noteholders. In its complaint, the party has alleged a breach of a covenant of the convertible note and has claimed a right of redemption at 120% of the face value of the note plus interest. The claim totals $3,607,500 plus interest which includes the original face value of the note. The noteholder is alleging that the acquisition of Caribou Resources Corp. is a prohibited investment rather than a permitted acquisition under the terms of the convertible notes as management contends. Management of JED does not consider that the action has merit and will vigorously defend against it.