Encore Acquisition Company Announces Revised 2009 Capital Budget

FORT WORTH, Texas--(Business Wire)--
Encore Acquisition Company (NYSE: EAC) ("Encore" or the "Company") announced
today that its Board of Directors has approved a revised capital budget for 2009
of $310 million related to its drilling and development program, a reduction of
$150 million from the Company`s previously approved $460 million capital budget.
While Encore has hedges in place protecting approximately 90 percent of its
estimated oil production for 2009, the Company felt it prudent to scale back its
capital program in light of the financial crisis, inflated service costs, and a
further weakening of commodity prices. The Company believes that late 2009 or
2010 oil prices will increase, and the deferred projects will have a higher rate
of return than today. Encore`s strategy for 2009 continues to be focused on
allocation of capital to the Company`s most efficient and highest rate of return
projects, expansion of the Company`s acreage position in the highly successful
Bakken and Haynesville plays, repurchase of common stock, and reduction of debt.

Jon S. Brumley, President and Chief Executive Officer of the Company, commented,
"Encore was formed around long-life, shallow-declining properties and that has
continued as core to our business philosophy and strategy. When you couple our
long-life, high-margin oil properties with our hedging portfolio, the result is
a company poised to weather storms and take advantage of uncertainty. As
commodity prices rose, service costs rose right alongside them. Now commodity
prices have dropped, but service costs remain inflated. So, to make us more
opportunistic and improve our already strong liquidity position, we are reducing
our 2009 budget by $150 million. However, even with a lower budget, the Company
can keep production flat. I think it is important to note that we are not losing
projects, but deferring them until service costs reflect the current commodity
price environment. If you were to drill the projects under the current scenario,
you would be wasting those projects."

Mr. Brumley went on to say, "Our properties are time-tested and decline at slow
rates as they have been weathering cycles since the second half of the 20th
century. A downturn in commodity prices is nothing new to the Cedar Creek
Anticline or our Permian waterfloods. It is because of properties like these
that we can maintain our production with only $215 million of drilling. We are
excited about 2009 and look forward to our small but efficient budget, improving
our liquidity position, and maintaining our production for about 50 percent of
EBITDAX. We plan to continually assess and wisely invest in areas the markets
are giving the best rate of return whether it be drilling, stock repurchases,
debt reduction, or acquisitions. We feel this is the most efficient and prudent
use of capital and will position the Company for 2010 and beyond, regardless of
the commodity price environment. Our focus has always been on increasing
long-term shareholder value, and with our new, efficient capital budget we will
accomplish our goal."

The Company has a strong hedging portfolio in place for 2009 that includes
floors at $110.00 per barrel ("Bbl") for 11,630 barrels of oil per day
("Bbls/D"), swaps at $84.09 per Bbl for 3,500 Bbls/D, and floors at $80.00 per
Bbl for 8,000 Bbls/D. The counterparties to these hedges are a diverse group
comprising eleven institutions, all of which are rated A- or better by Standard
& Poor`s and/or Fitch, with the majority rated AA- or better. The Company
recently cashed in approximately $25 million of hedging gains on 2,500 Bbls/D of
swaps.

Under the various NYMEX pricing assumptions, the Company`s hedging portfolio is
expected to provide the following cash flows in 2009 (net of deferred premiums,
in thousands):

Crude Oil ($/Bbl)
Natural Gas $30.00 $40.00 $50.00 $60.00 $70.00

($/Mcf)

$4.00 $477,695 $411,520 $345,346 $260,921 $177,227
$5.00 $467,584 $401,409 $335,235 $250,810 $167,116
$6.00 $457,473 $391,298 $325,124 $240,699 $157,005
$7.00 $452,475 $386,301 $320,126 $235,702 $152,007
$8.00 $444,750 $378,575 $312,401 $227,976 $144,282

The Company has been expanding its natural gas hedge portfolio since the end of
the third quarter of 2008 by adding a combination of floors, collars, and swaps.
Since the end of the third quarter, Encore entered into 2009 collars for 20,000
Mcf/D with floors of $6.50 and ceilings of $7.45 and entered into 2009 floors at
$7.50 for 1,800 Mcf/D. Additionally, the Company entered into floors for 900
Mcf/D for 2010, 2011, and 2012 at $8.25, $7.50, and $7.50, respectively, and
entered into swaps for 900 Mcf/D for 2010, 2011, and 2012 at $7.04, $7.43, and
$7.39, respectively. All preceding natural gas hedge prices are presented on a
NYMEX equivalent basis.

While Encore expects to allocate capital to projects throughout its portfolio,
the Company is focusing a substantial portion of the budget on three core areas
with the highest expected rate of return: the Haynesville/Cotton Valley/Travis
Peak in the ArkLaTex region, the Bakken/Sanish in the Williston Basin, and the
Pegasus, Coyanosa, and Block 16 fields of the West Texas joint venture with
ExxonMobil in the Permian Basin. The regional breakdown of the capital budget is
expected to be as follows:

• Haynesville/Cotton Valley/Travis Peak $ 90 million
• Bakken/Sanish $ 75 million
• West Texas JV $ 53 million
• Other Rockies $ 49 million
• Mid-Continent $ 22 million
• Other Permian Basin $ 21 million

The $310 million of capital is expected to be invested in the following categories:

• Drilling $ 215 million
• Improved Oil Recovery, Workovers $ 60 million
• Land, Seismic and Other $ 35 million

The Company`s operational objectives for 2009 are to:

* Maintain a constant drilling program in the Bakken;
* Establish a Haynesville drilling program by drilling at least four wells;
* Exploit the Pegasus, Coyanosa, and Block 16 fields of the ExxonMobil joint
venture;
* Increase its drilling inventory;
* Maximize proved developed production;
* Reduce service costs for drilling and lease operations expense;
* Expand the Company`s acreage position in key areas developed from the 2008
program; and
* Secure a CO2 source for the Cedar Creek Anticline and/or Bell Creek.

About the Company

Encore Acquisition Company is engaged in the acquisition and development of oil
and natural gas reserves from onshore fields in the United States. Since 1998,
Encore has acquired producing properties with proven reserves and leasehold
acreage and grown the production and proven reserves by drilling, exploring,
reengineering or expanding existing waterflood projects, and applying tertiary
recovery techniques.

Cautionary Statement

This press release includes forward-looking statements, which give Encore's
current expectations or forecasts of future events based on currently available
information. Forward-looking statements in this press release relate to, among
other things, operational objectives, expected capital expenditures (including,
without limitation, the amount, location, category, and timing of such
expenditures), drilling plans, rates of return, 2009 production, our liquidity
position, discretionary cash flows, the benefits of the hedging program, the
conduct of the share repurchase program (including, without limitation, the
timing, duration, form of transaction, the factors to be considered and
termination of the program), debt repayment, results in 2009 and any other
statements that are not historical facts. The assumptions of management and the
future performance of Encore are subject to a wide range of business risks and
uncertainties and there is no assurance that these statements and projections
will be met. Factors that could affect Encore's business include, but are not
limited to: the risks associated with drilling of oil and natural gas wells;
Encore's ability to find, acquire, market, develop, and produce new properties;
the risk of drilling dry holes; oil and natural gas price volatility; derivative
transactions (including the costs associated therewith); uncertainties in the
estimation of proved, probable and potential reserves and in the projection of
future rates of production and reserve growth; inaccuracies in Encore's
assumptions regarding items of income and expense and the level of capital
expenditures; uncertainties in the timing of exploitation expenditures;
operating hazards attendant to the oil and natural gas business; risks related
to Encore's high-pressure air program; drilling and completion losses that are
generally not recoverable from third parties or insurance; potential mechanical
failure or underperformance of significant wells; climatic conditions;
availability and cost of material and equipment; the risks associated with
operating in a limited number of geographic areas; actions or inactions of
third-party operators of Encore's properties; Encore's ability to find and
retain skilled personnel; diversion of management's attention from existing
operations while pursuing acquisitions or joint ventures; availability of
capital; the strength and financial resources of Encore's competitors;
regulatory developments; environmental risks; uncertainties in the capital
markets; uncertainties with respect to asset sales; general economic and
business conditions; the ability of derivative counterparties to satisfy their
obligations to the Company; industry trends; and other factors detailed in
Encore's most recent Form 10-K and other filings with the Securities and
Exchange Commission. If one or more of these risks or uncertainties materialize
(or the consequences of such a development changes), or should underlying
assumptions prove incorrect, actual outcomes may vary materially from those
forecasted or expected. Encore undertakes no obligation to publicly update or
revise any forward-looking statements.

Encore Acquisition Company, Fort Worth
Bob Reeves, Chief Financial Officer
817-339-0918
rcreeves@encoreacq.com
or
Kim Weimer, Investor Relations
817-339-0886
kweimer@encoreacq.com

Copyright Business Wire 2009