KRU Proshares Ultra S&P Regional Banking (delisted)

OKLAHOMA CITY, Dec. 16 /PRNewswire-FirstCall/ -- Crusader Energy Group Inc. (AMEX:KRU) today provides 2009 drilling budget and hedging update. 2009 Drilling Budget Reduction -- Board approved a 45% reduction to the 2009 drilling budget from $184.3MM to $103.6MM. -- Management has ability to further reduce 2009 drilling budget, if warranted, with only two drilling rigs under long-term contracts (expire in second half of 2009). -- Currently 6 drilling rigs are active on operated properties (1 in Williston Basin, 1 in Permian Basin and 4 in Anadarko Basin) and 2 drilling rigs are active on non-operated properties (1 in Ft. Worth Basin and 1 in Anadarko Basin). -- Based on $103.6MM budget for 2009, we anticipate operated rig count to range from 3 to 4 and non-operated rig count to range from 1 to 2. Hedging Update -- Liquidated a significant portion of our 2009 and 2010 in-the-money hedges for cash proceeds of approximately $17.0MM. -- The following hedging transactions significantly increased our hedged volumes (required by second lien term facility) while providing two strategic initiatives. Our 2009 oil and gas volumes hedged increased approximately 82% and 83%, respectively, while our 2010 oil and gas volumes hedged increased approximately 91% and 71%, respectively, compared to our previous positions. Management also entered into hedging instruments covering the first half of 2011 for the first time. First, we monetized our hedge positions entered into in the second half of 2008 creating significant shareholder value. Second, hedges entered into allow Crusader to participate in increased petroleum prices in the future. -- Purchased approximately $8.3MM of premium puts as follows: Monthly Year Product Volumes Floor ---- ------- ------- ----- 2009 Oil 18,800 $50.00 2010 Oil 16,450 $60.00 1st Half of 2011 Oil 15,200 $60.00 2009 Gas 467,000 $5.50 -- Entered into the following gas costless collars: Monthly Year Product Volumes Floor Ceiling ---- ------- ------- ----- ------- 2010 Gas 342,000 $6.00 $9.30 1st Half of 2011 Gas 363,000 $6.00 $10.25 -- Immediately following these transactions, Crusader has the following hedging instruments: Natural Gas Production ---------------------- Collars Swaps Puts Year Month MCF Floor Ceiling MCF Fixed MCF Floor 2008 Dec - $- $- 10,000 $7.45 123,650 $8.25 2009 Jan - Dec - $- $- - $- 5,841,500 $5.62 2010 Jan - Dec 4,104,000 $6.00 $9.30 2011 Jan - Jun 2,178,000 $6.00 $10.25 Oil Production -------------- Collars Swaps Puts Year Month Bbls Floor Ceiling Bbls Fixed Bbls Floor 2009 Jan - Dec 72,000 $67.00 $100.00 - $- 225,600 $50.00 2010 Jan - Dec - $- $- - $- 197,400 $60.00 2011 Jan - Jun - $- $- - $- 91,200 $60.00 Basis Differential Swap ----------------------- Year Month MCF ANR 2008 Dec 145,000 $1.11 2009 Jan - Dec 1,560,000 $0.76 MANAGEMENT COMMENTS Commenting on the announcement, David D. Le Norman, Crusader's President and CEO, said, "We demonstrated today that we have the commitment to live within our means and the flexibility to decrease our 2009 Drilling Budget, now for the second time in 60 days. The remainder of the 2009 Drilling Budget was also high graded and shifted to lower F&D cost endeavors as a part of the process while we continue to evaluate regional product pricing net backs on a project by project basis. If further reductions are warranted, we will move quickly to implement them." John G. Heinen, the company's CFO added that Crusader is required under certain provisions of its existing credit agreements to maintain minimum hedging levels. He stated, "We were able to monetize a portion of our previous hedge positions and take advantage of short term pricing pressures while significantly adding volumes. By executing a series of trades, we were able to protect our capital budgets without sacrificing future earnings and cash flows when product pricing rebounds." ABOUT CRUSADER ENERGY Oklahoma City-based Crusader Energy Group Inc. is an oil and gas company with assets focused in various producing domestic basins. The company has a primary focus on the development of unconventional resource plays which includes the application of horizontal drilling and cutting edge completion technology aimed at developing shale and tight sand reservoirs. The Crusader assets are located in various domestic basins, the majority of which are in the Anadarko Basin and Central Uplift, Ft. Worth Basin Barnett Shale, Delaware Basin, Val Verde Basin, and the Bakken Shale of the Williston Basin. For other information regarding Crusader, please visit the Company's Internet Web site at http://www.crusaderenergy.com/. In addition to SEC filings and press releases, the Company posts materials of general interest to investors including any current investor meeting information or Crusader conference or analyst presentations. FORWARD-LOOKING STATEMENT DISCLOSURE This press release contains "forward-looking statements" within the meaning of the Federal securities laws and regulations. Forward-looking statements are estimates and predictions by management about the future outcome of events and conditions that could affect Crusader's business, financial condition and results of operations. We use words such as, "will," "should," "could," "plans," "expects," "likely," "anticipates," "intends," "believes," "estimates," "may," and other words of similar expression to indicate forward-looking statements. There is no assurance that the estimates and predictions contained in our forward-looking statements will occur or be achieved as predicted. Any number of factors could cause actual results to differ materially from those referred to in a forward-looking statement, including drilling risks, operating hazards and other uncertainties inherent in the exploration for, and development and production of, oil and natural gas; volatility in oil and natural gas prices, including the adverse impact of lower prices on the amount of our cash flow available to meet capital expenditures, our ability to borrow and raise capital and on the values attributed to our proven reserves; drilling and operating risks in the unconventional shales and other reservoirs in which we operate, including uncertainties in interpreting engineering, reservoir and reserve data; the availability of technical personnel and drilling equipment; the timing and installation of processing and treatment facilities, third-party pipelines and other transportation facilities and equipment; changes in interest rates; and increasing production costs and other expenses. Further information on risks and uncertainties affecting our business is described under Risk Factors are available in our reports filed with the SEC which are incorporated by this reference as though fully set forth herein. We undertake no obligation to publicly update or revise any forward-looking statement. DATASOURCE: Crusader Energy Group Inc. CONTACT: Roy A. Fletcher, Investor Relations of Crusader Energy Group Inc., +1-405-241-1847 Web Site: http://www.crusaderenergy.com/

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