Double Eagle Petroleum Reports Third Quarter Results

DENVER, Oct. 29 /PRNewswire-FirstCall/ -- Double Eagle Petroleum Co. (Nasdaq:
DBLE) today reported its financial results for the third quarter ended
September 30, 2009. Highlights of the third quarter include:

-- Net production volumes of 2.3 Bcfe, which represents an increase of
21%
year over year;
-- Clean Earnings* of $3,008,000 or $0.29 per share;
-- Production costs decreased to $0.84 per Mcfe versus $0.90 per Mcfe for
the third quarter of 2008;
-- Cash flows from operations of $2,648,000; and

-- Completed acquisition of Petrosearch Energy Corporation, which
resulted
in net cash to the Company of $7,733,000.

(*) Please see last table for reconciliation of U.S. GAAP.

The Company reported Clean Earnings, a non-U.S. GAAP metric, for the third
quarter of 2009 of $3,008,000 or $0.29 per share, as compared to $4,214,000,
or $0.46 per share for the same prior year period. Clean Earnings excludes
the effects of non-cash charges, including depreciation, depletion and
amortization expense ("DD&A"), unrealized gains/losses related to the
Company's economic hedges, which are recorded at fair value at each period
end, as well as stock-based compensation expense. Third quarter Clean
Earnings includes the impact of income taxes of $2,328,000, although the
Company does not expect to pay income taxes due to its unused operating loss
carryforwards.

On a U.S. GAAP basis, the Company reported a net loss attributable to common
shareholders of $(514,000), or $(0.05) per diluted share, as compared to a net
income of $1,977,000, or $0.22 per share for the third quarter of 2008.

Total revenues for the third quarter of 2009 were approximately $10,866,000,
as compared to $14,006,000 in the third quarter of 2008. Production-related
revenue, which excludes the non-cash hedging loss of $800,000 and other
income, decreased 15% to approximately $11,580,000, as compared to the third
quarter of 2008. During the period, the Company's average realized gas price
decreased 32% to $4.27, compared to $6.27 in the same 2008 period. The
Company benefited from its hedging program, as the average Colorado Interstate
Gas ("CIG") price for the quarter decreased 52% compared to the third quarter
of 2008.

Production costs during the three months ended September 30, 2009, increased
to $1,934,000 as compared to $1,722,000. The increase in production costs
during the third quarter was primarily related to higher workover costs, as
the Company performed well workovers and enhancement projects during the
period. Despite the increase in workover expense during the third quarter,
production costs on a per Mcfe basis decreased 7% to $0.84 per Mcfe, as
compared to $0.90 a year ago.

"The third quarter of 2009 was another solid quarter for Double Eagle, with
year over year production growth, positive cash flow from operations, and
disciplined spending. Although natural gas producers in the Rockies have
still been saddled with low gas prices, we've used this as an opportunity to
workover many of our existing wells in the Catalina Unit and fine tune our
gathering and transportation system. These activities are expected to
increase production in the later part of this year, and beyond," Richard Dole,
Chairman, President and CEO of Double Eagle remarked.

Total production volumes increased by 21% to 2.3 Bcfe for the quarter ended
September 30, 2009, as compared to 1.9 Bcfe in the same prior-year period, and
reflects production from 20 new wells in the Catalina Unit that were drilled
as part of the 2008 drilling program. It also includes production from 16 new
wells in the Pinedale Mesa Units from the 2008 drilling program, and new wells
from the 2008 drilling program at the Sun Dog and Doty Mountain Units. The
increase in production volume from new wells was reduced by i) the decrease in
the Company's working interest in the wells at the Catalina Unit from 73.84%
to 69.31%, ii) reduced production from certain existing wells at the Catalina
Unit, due to the well workovers and the production enhancement projects, iii)
a temporary reduction in transportation capacity from pipeline maintenance and
iv) reduced compression in the field for several months.

At September 30, 2009, the Company had outstanding borrowings on its line of
credit of $34,000,000, as compared to $24,639,000 at December 31, 2008, and
$42,500,000 at June 30, 2009. During the third quarter, the Company completed
its acquisition of Petrosearch Energy Corporation, in exchange for
approximately 1.8 million shares of Double Eagle common stock and cash
consideration of $873,000. The acquisition provided the Company with net cash
of $7,733,000, which the Company used to pay down a portion of its outstanding
debt. Currently, the Company has a $75 million credit facility in place with
a $45 million borrowing base, which matures July 31, 2010. Management is
actively negotiating an extension to this credit facility with the current
lending group, and believes an agreement will be reached in the fourth quarter
of 2009 to extend the agreement out until 2012.

The Company has a hedging program in place in order to mitigate its exposure
to oil and gas production cash-flow risk caused by the decline in commodity
prices. The Company has historically entered into forward sales, costless
collars, and fixed price swaps to hedge its equity production. The table
below summarizes the current outstanding derivatives:

Total Volumes NYMEX Price Average CIG
(MMcf) per Mcf Price per Mcf
------------- ----------- -------------
Q4 2009 767 $7.27
615 $4.50-$9.00

2010 4,380 $4.30
3,650 $4.50-$9.00

2011 2,920 $7.07
2,730 $4.50-$9.00

SUMMARY STATEMENT OF OPERATIONS
(In thousands, except per share data)

Three months ended Nine months ended
------------------ -----------------
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----

Revenues
Oil and gas sales $9,669 $11,662 $30,661 $29,439
Transportation
revenue 1,489 1,283 4,659 2,370
Price risk
management
activities (378) 1,020 (3,670) 3,042
Other income, net 86 41 296 258
-- -- --- ---

Total revenues 10,866 14,006 31,946 35,109
------ ------ ------ ------

Expenses
Lease operating
expenses 1,934 1,722 5,535 4,814
Production taxes 879 1,419 2,521 3,753
Pipeline operating
expenses 1,032 896 2,686 1,643
Exploration expenses
including dry holes 38 391 93 922
Impairment of
properties and
surrendered
leases 82 - 82 -
-- --- -- ---

Total Expenses 3,965 4,428 10,917 11,132
----- ----- ------ ------

Gross Margin
Percentage 63.5% 68.4% 65.8% 68.3%

General and
administrative 1,579 1,652 4,680 3,861
Depreciation,
depletion and
amortization
expense 4,681 3,462 13,778 7,456
Other income
(expense), net (265) - (909) (64)
---- - ---- ---

Pre-tax income (loss) 376 4,464 1,662 12,596

Benefit (Provision)
for deferred taxes 40 (1,557) (481) (4,554)
-- ------ ---- ------

NET INCOME (LOSS) 416 2,907 1,181 8,042

Preferred stock
requirements 930 930 2,792 2,792
--- --- ----- -----

NET INCOME (LOSS)
attributable to
common stock $(514) $1,977 $(1,611) $5,250
===== ====== ======= ======

Net income (loss) per
common share:
Basic $(0.05) $0.22 $(0.17) $0.57
====== ===== ====== =====
Diluted $(0.05) $0.22 $(0.17) $0.57
====== ===== ====== =====

Weighted average
shares
outstanding:
Basic 10,315,270 9,167,977 9,587,711 9,156,079
========== ========= ========= =========
Diluted 10,315,270 9,167,977 9,587,711 9,156,215
========== ========= ========= =========

SELECTED BALANCE SHEET DATA
(In thousands)

September 30, December 31,
2009 2008 % Change
---- ----

Total assets $149,873 $171,989 -13%

Balance outstanding on Credit
facility 34,000 24,639 38%

Total stockholders' equity 49,776 54,903 -9%

SELECTED CASH FLOW DATA
(In thousands)

Nine months ended
September 30,
---------------------
2009 2008 % Change
---- ----

Net cash provided by Operating
activities $19,474 $15,100 29%

Net cash used in Investing
activities (22,560) (26,549) -15%

Net cash provided by Financing
activities 6,161 12,008 -49%

SELECTED OPERATIONAL DATA

Three months ended,
-------------------
September 30, September 30,
2009 2008 % Change
---- ----

Total production (Mcfe) 2,304,806 1,910,752 21%

Average price realized per
Mcfe $4.38 $6.45 -32%

Use of Non-GAAP Financial Measures
The Company believes that the supplemental presentation of "Clean Earnings"
shown below provides a meaningful non-GAAP financial measure to help
management and investors understand and compare operating results and business
trends among different reporting periods on a consistent basis, independently
of regularly reported non-cash charges. The Company's management also uses
such pro forma measures in its planning and development of target operating
models, and to enhance its understanding of ongoing operations. Readers are
cautioned not to view the non-GAAP pro forma results as superior to or an
alternative to GAAP results or as being comparable to results reported or
forecasted by other companies. Readers should refer to the reconciliation of
GAAP results with the pro forma results for the three and nine months ended
September 30, 2009 and 2008, respectively, contained below.

Reconciliation of GAAP Results to Pro Forma Results
(In thousands, except per share data)

Three Months Ended Three Months Ended
September 30, September 30,
2009 2008
------------------------------------------
Per Share Per Share
Results Basis Results Basis
------- ----- ------- -----
Net income (loss) as
reported under US GAAP $(514) $(0.05) $1,977 $0.22
===== ====== ====== =====
Add back non-cash
items (1):
Share-based compensation
expense 180 0.02 204 0.02
Depreciation, depletion,
amortization and accretion
expense 2,815 0.27 2,269 0.25
Non-cash loss (gain)
on price risk
management (2) 478 0.05 (236) (0.03)
Impairment and
surrendered leases 49 0.00 - -
-- ---- --- ---
Clean Earnings $3,008 $0.29 $4,214 $0.46
------ ----- ------ -----

Nine Months Ended Nine Months Ended
September 30, September 30,
2009 2008
-----------------------------------------
Per Share Per Share
Results Basis Results Basis
------- ----- ------- -----
Net income (loss) as
reported under US GAAP $(1,611) $(0.17) $5,250 $0.57
======= ====== ====== =====
Add back non-cash items (1):
Share-based compensation
expense 640 0.07 361 0.04
Depreciation, depletion,
amortization and
accretion expense 8,285 0.86 5,207 0.57
Non-cash loss (gain)
on price risk
management (2) 4,197 0.44 (1,552) (0.17)
Impairment and
surrendered leases 49 0.01 - -
-- ---- --- ---
Clean Earnings $11,560 $1.21 $9,266 $1.01
------- ----- ------ -----

(1) Presented net of tax with effective tax rate of 40.2% and 34.9% for
the three and nine months ended September 30, 2009 and 2008, respectively.

(2) Loss (gain) on price risk management is an unrealized loss (gain) from
the Company's mark-to-market derivative instruments, resulting from
recording the instrument at fair value at each period end. Cash is
received upon settlement of the contract. This cash settlement is also
recorded within the price risk management activities line on the statement
of operations.

The Company has scheduled a conference call for October 29, 2009 at 9:00 AM
Mountain Daylight Standard Time to review the third quarter 2009 financial
results. A replay of the call will be available shortly thereafter.

About Double Eagle
Double Eagle Petroleum Co. explores for, develops, and sells natural gas and
crude oil, with natural gas constituting more than 95% of its production and
reserves. The Company's current major development activities are in its
Atlantic Rim coal bed methane play and in the Pinedale Anticline in Wyoming.

This release contains forward-looking statements regarding Double Eagle's
future plans and expected performance based on assumptions the Company
believes to be reasonable. A number of risks and uncertainties could cause
actual results to differ materially from these statements, including, without
limitation, the success rate of exploration efforts and the timeliness of
development activities, fluctuations in oil and gas prices, and other risk
factors described from time to time in the Company's reports filed with the
SEC. In addition, the Company operates in an industry sector where securities
values are highly volatile and may be influenced by economic and other factors
beyond the Company's control. Double Eagle undertakes no obligation to
publicly update these forward-looking statements, whether as a result of new
information, future events or otherwise.

Company Contact:
John Campbell, IR
(303) 794-8445
http://www.dble.com

SOURCE Double Eagle Petroleum Co.

John Campbell, IR, +1-303-794-8445, http://www.dble.com