CALGARY, Nov. 29 /CNW/ - Kroes Energy Inc. (TSX Venture: KRS) today announced its financial and operating results for the nine months ended September 30, 2005. Net earnings amounted to $799,571 ($.025 per share) compared to $761,477 ($.025 per share) for the same period in 2004. Cash flow from operations increased by 21% to $1,135,576 ($.035 per share) compared to $939,116 ($.030 per share) in the previous year. Higher crude oil prices during the nine month period were partially offset by new production taxes imposed in 2005. Crude oil production from Ukraine averaged 236 barrels per day (bpd) in the first nine months of 2005 compared with 235 bpd the same period the prior year. Kroes' share of production has risen steadily in 2005 and for the third quarter averaged 263 bpd. Average crude oil prices in Ukraine during 2005 were $50.56 per barrel compared to $34.58 per barrel in the same period last year. During the third quarter, development well No. 301 was completed and is expected to make a significant contribution to Kroes' increasing production, initially from the K1 formation. Late in October 2005, development well No. 303, the fourth development well in this year's program, commenced drilling. This new well will be drilled through the P1-P2 zone into the lower K1 sands and will be deviated at 75 degrees from vertical through the producing horizons which should significantly extend the producing interval. The Company also announced that it intends to expand its oil and gas activities into new areas, initially focusing on Western Canada. Fred Callaway, President of Kroes, stated: "Ukraine continues to represent excellent long term potential for the Company, but delays in achieving our goals there have convinced the Board of Directors that Kroes needs a balance of long and short term opportunities." The Company is actively engaged in its new diversification strategy and hopes to be in a position to participate in Western Canadian projects early in 2006. Kroes Energy Inc.'s third quarter report as of September 30, 2005 has been filed on SEDAR (www.sedar.com). Kroes Energy is a junior oil and gas producer and explorer participating in the Lelyaki Oilfield redevelopment project in Ukraine, one of Eastern Europe's fastest growing economies. Kroes has a strong management team, with extensive international experience. Shares trade on the TSX Venture Exchange under the symbol KRS. FORWARD-LOOKING STATEMENTS This disclosure contains certain forward-looking estimates that involve substantial known and unknown risks and uncertainties, certain of which are beyond Kroes' control, including: the impact of general economic conditions in the areas in which the Company operates, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition, there are risks and uncertainties associated with oil and gas operations; therefore, Kroes' actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward- looking estimates and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking estimates will transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, that Kroes will derive from that. %SEDAR: 00007855E