Q1 2009 Highlights:

— Funds from operations increased 176% to CAD7.3 million (CAD0.14/share diluted) from CAD2.7 million (CAD0.18/share diluted) in first quarter of (Q-1) 2008

— Capital expenditures totaled CAD6.4 million including property acquisitions net of dispositions compared with CAD3.1 million in Q-1 2008

— Cost efficiencies have continued to improve. Operating costs declined CAD3.46/BOE from Q-1 2008 to CAD7.33/BOE; general and administrative costs declined CAD1.49/BOE to CAD2.55/BOE

— Total cash costs, including operating, transportation, general and administrative and interest costs, declined 30% in the quarter to CAD13.03/BOE from CAD18.61/BOE in Q-1 2008

— The effective royalty rate declined to 8% from 10.5% in Q-1 2008, which reflects the new Alberta Crown royalty rate, offset by higher freehold royalties on purchased production. Royalty rates are expected to decline further with the acquisition of an 8.5% overriding royalty on Ember Resources’ Acme property that was completed on February 20, 2009. For the month of March 2009, Ember Resources’ effective royalty rate is estimated at 6%

— Net bank debt and working capital has been reduced to CAD96.6 million, down from CAD101.2 million at the end of Q-1 2009. The decline resulted from the sale of non-core assets effective April 1, 2009 which generated gross proceeds of CAD4.55 million

— Subsequent to quarter end, the company negotiated a new CAD102 million borrowing facility with its banking syndicate. The facility is comprised of a CAD5 million dollar revolving working capital amount and a CAD97 million revolving term facility

— Net asset value, before tax, is estimated at CAD5.14/share using strip pricing from March 24, 2009, and year-end 2008 reserves. Net asset value is calculated using net present value of proved, probable plus possible reserves discounted at 10%, plus land value of CAD17.2 million, minus net bank debt and working capital deficit of CAD101.8 million

Operating performance

— Average production increased 241% to 27.2 MMcf/d from 8 MMcf/d in Q-1 2008. Production was down 6% from fourth quarter 2008 as a result of declines from flush production from 30 net wells put on stream in the fourth quarter and limited new drilling in the Q-1 2009

— The operating netback for the quarter was CAD22.50/BOE as compared to CAD28.62/BOE in Q-1 2008. Low gas prices contributed to a revenue decline of CAD11.97/BOE, offset by a CAD3.48/BOE increase in operating and transportation expenses and a CAD2.37/BOE decrease in royalties

— The drilling program recorded 100% success based on 13 wells (7.3 net) drilled at Acme and Fenn-Big Valley, all of which were on stream by the end of the quarter. In addition, production was added from a nine-well workover program (nine net) on existing wellbores in the Bashawarea

Ember Resources acquired an 8.5% gross overriding royalty payable on all of its production and undrilled lands at Acme for CAD3.3 million. Acme is currently producing about 5.2 MMcf/d and has 54 Bcf of remaining proved, probable and possible reserves. The royalty was acquired at an estimated cost of CAD0.87/Mcf on a net basis

— Non-core assets sold during the quarter generated CAD700,000 and included production of 13 BOE/d. An additional 125 BOE/d was sold on April 1, 2009 for CAD4.55 million. To date, non-core asset dispositions have generated CAD7 million and included 138 BOE/d, 350,000 BOE of proved plus probable reserves and 32 thousand net acres of undeveloped land

Outlook:

— Ember Resources is continuing to focus on development of its CBM properties on trend with the Horseshoe Canyon coals, one of the lowest-cost gas plays in North American and one that can compete with the cost structure of emerging shale gas plays

— Current production is 26.6 MMcf/d net of recent dispositions and is expected to remain relatively flat for 2009 with drilling offsetting normal declines

— Ember Resources is targeting to reduce debt to CAD90 million by year end. Additional non-core assets for sale represent 180 BOE/d, 725,000 BOE of proved plus probable reserves and 100,000 net acres of undeveloped land

— Capital expenditures this year will remain within cash flows, while non-core asset divestitures and excess cash flow will be used to reduce debt. If low gas prices continue, capital spending will be reduced for 2009. As the bulk of drilling is planned for later this year, guidance will be reviewed early in the second half of the year. Minimal activity is planned for the second quarter with cash flows expected to exceed capital spending

— The current budget of CAD25 million is forecasted to yield average production of 26-27 MMcf/d, essentially flat with current production. An estimated 35-45 net wells are planned with drilling focused on core Horseshoe Canyon CBM areas at Acme, Fenn-Big Valley and Bashaw

— An estimated 450 net Horseshoe Canyon locations are in inventory; 355 net locations were recognized in the 2008 year-end reserve report, of which 223 were considered proved undeveloped. Ember Resources has drilled with 100% success in the Horseshoe Canyon over the past three years with only one mechanical failure

Gas price recovery still unpredictable

Natural gas prices have dropped significantly through a combination factors: a high level of storage from record levels of drilling in 2008, the emergence of high deliverability shale plays and a severe contraction in demand. Current futures are trading at CAD4.10/mcf for the remainder of 2009 compared with CAD9.10/mcf averaged in the first six months of 2008.

Any gas price recovery will require a rebalancing of supply/demand fundamentals. A number of factors are coming into play that will ultimately help rebalance the market, but it is difficult to forecast when there will be an impact on pricing. For example, natural gas drilling activity has declined dramatically with rig counts off by more than 50% from last year. Ultimately, this drop will lead to a decline in domestic supply; many analysts are predicting this supply reduction to start to be seen in the second half of 2009.

“This is a difficult period for all natural gas producers. Depressed prices have forced companies to curtail drilling plans and adjust strategies to compete in this environment. Ember Resources’ proven low-cost CBM strategy will allow us to weather the storm and react quickly to improving conditions when the market turns,” said Doug Dafoe President and chief executive officer. “Ember Resources’ Horseshoe Canyon resource play can compete with the best North American shale plays and ensures our success going forward.”

Horseshoe Canyon coals & shale gas

Backgrounder

Ember Resources’ CBM strategy – Horseshoe Canyon Coals

The Horseshoe Canyon trend in Alberta has seen in excess of 14,000 wells drilled since 2001 and currently produces an estimated 700 MMcf/d making it one of the largest unconventional natural gas resources plays in Canada. The industry drills 1,500 to 2,000 wells per year resulting in a growing production base, as well as a de-risking of the estimated 36 Tcf of resource potential. The Horseshoe Canyon coals cover a trend area in Alberta of about 32,000 sections, or about 20 million acres.

As a result of strategic acquisitions and follow-up drilling activity, Ember Resources is now ranked among the top five operators currently developing this significant resource play, which has been dominated by major North American independents. With 450 drilling locations in inventory and an operational footprint over 161,000 gross acres, Ember Resources is positioned to significantly increase its producing asset base well into the future.