Recovery Energy Announces Third Quarter Financial Results

Denver, (PresseBox) - Recovery Energy, Inc. (NASDAQ: RECV), an independent oil and gas exploration and production company with operations and assets in the Denver-Julesburg (DJ) Basin, reported its financial results for the quarter ended September 30, 2011.

Operations Update

Recovery Energy holds 150,000 gross and 132,500 net acres in the Denver-Julesburg Basin. The Company has continued to review 3D seismic, geologic data, chemical analysis and well results throughout its leasehold position which supports prospectivity of the Niobrara shale and other horizons. In its Chugwater prospect area, where the Company has drilled two horizontal Niobrara test wells which are still in progress, management is developing additional operational efforts for both the Niobrara shale and the Greenhorn limestone as well as other horizons.

The Company recently completed the listing of its shares on the NASDAQ Stock Market LLC, under the symbol: RECV.

3Q11 Financial Results

For the three months ended September 30, 2011 the Company reported oil and gas revenues of $1,812,000 compared to $2,653,000 for the third quarter of 2010. Net loss for the period was $3,028,000 compared to a net loss of $7,491,000 for the same period in 2010. EBITDAX for the quarter ended September 30, 2011 was $1,215,198, up sequentially from the second quarter of 2011 by 221%. The net loss for the third quarter 2011 includes stock based compensation of $917,306, non-cash charges of depreciation, depletion, amortization and accretion of $1,052,946, stock issued for services of $121,822, amortization of deferred financing costs of $1,497,648, and cash interest expense of $639,756. The net loss for the quarter also includes the effect of a non-cash loss of $13,338 related to the mark to market adjustment of a derivative liability associated with the embedded conversion feature of the Company's convertible debentures. The calculation of EBITDAX excludes these non-cash items and is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income, income from operations, or cash flow provided by (used in) operating activities prepared in accordance with GAAP. A more detailed description of EBITDAX is included below.

The Company's production volume on a BOE basis decreased 34% from 38,538 BOE during the third quarter of 2010 to 25,408 BOE during the third quarter of 2011. This decrease is primarily attributable to natural production declines related to existing production. The reduction in production volumes was partially offset by price increases during the quarter. Its average oil price increased to $81.94 per barrel for the third quarter of 2011, compared to $68.84 per barrel for the same period in 2010. In addition to the increase in price realization during the third quarter of 2011, the Company realized a gain on hedges of approximately $734,000 compared to a realized hedge gain of approximately $293,000 for the same period in 2010. The decrease in oil production was also offset by an increase in production of natural gas. Natural gas production increased from zero during to the three months ended September 30, 2010 to 31,579 Mcf during the same period in 2011, due to production from a new gas well that commenced production in the first quarter of 2011.

For the nine months ended September 30, 2011 the Company reported oil and gas revenues of $5,981,000 compared to $7,433,000 for the comparable period of 2010. Net loss for the period was $11,534,000 compared to a net loss of $13,509,000 for the same period in 2010. EBITDAX for the nine months ended September 30, 2011 was $1,940,110. The net loss for the nine month period in 2011 includes non-cash charges of depreciation, depletion, amortization and accretion of $3,194,301, stock issued for services of $373,234, stock based compensation of $5,592,638, amortization of deferred financing costs of $3,701,373, cash interest expense of $2,422,737, and an unrealized gain on commodity hedges of $222,788. Stock based compensation expenses for the period includes a one-time non-cash charge of $3,551,000 for non-cash stock based compensation related to shares issued to the Company's former chief financial officer in connection with his separation agreement. The net loss for the nine month period of 2011 also includes the effect of a non-cash gain of $1,587,699 related to the mark to market adjustment of a derivative liability associated with the embedded conversion feature of the Company's convertible debentures.

Production volumes on a BOE basis decreased 27% from 106,724 BOE during the first nine months of 2010 to 77,819 BOE during the first nine months of 2011. This decrease is primarily attributable to natural declines related to existing production. The decrease in production volume was partially offset by increased prices during the first nine months of 2011 versus the first months of 2010 with oil price realization increasing by 26% to $87.69 per BOE for the first nine months of 2011, compared to $69.65 per BOE for the same period in 2010. This increase in price realization during 2011 was partially offset by a realized gain on hedges of approximately $402,000 compared to a realized hedge gain of approximately $566,000 for the same period in 2010. The decrease in oil production was also offset by an increase in production of natural gas. Natural gas production increased from zero during to the nine months ended September 30, 2010 to 88,229 Mcf during the same period in 2011.

This press release may include "forward-looking statements" as defined by the Securities and Exchange Commission (the "SEC"), including statements, without limitation, regarding the Company's expectations, beliefs, intentions or strategies regarding the future. Such forward-looking statements relate to, among other things the Company's: (1) proposed exploration and drilling operations, (2) expected production and revenue, and (3) estimates regarding the reserve potential of its properties. These statements are qualified by important factors that could cause the Company's actual results to differ materially from those reflected by the forward-looking statements. Such factors include but are not limited to: (1) the Company's ability to finance its the continued exploration and drilling operations, (2) positive confirmation of the reserves, production and operating expenses associated with the Company's properties; and (3) the general risks associated with oil and gas exploration and development, including those risks and factors described from time to time in the Company's reports and registration statements filed with the SEC.

Der Quartalsbericht wurde unter http://finance.yahoo.com/news/Recovery-Energy-Announces-bw-1306778540.html?x=0&l=1 veröffentlicht.

Recovery Energy, Inc.

Recovery Energy, Inc. (RECV) is a Denver-based independent oil and gas exploration and production company focused on the Denver-Julesburg (DJ) Basin where it holds 150,000 gross, 132,500 net acres. Recovery Energy's mission statement is to grow reserves and production through a combination of acquisitions and conventional and unconventional drilling activity, targeting the various hydrocarbon bearing formations that produce in the Denver-Julesburg Basin.

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