FG.B Flagship Energy IN Com Classb Npv

Flagship Energy Inc. ("Flagship") (TSX VENTURE:FG.A)(TSX VENTURE:FG.B) today
announced that it had identified accounting errors with respect to previous
calculations of its ceiling tests during June 2008. In the formula used to
calculate the estimated recoverable amount of property, plant and equipment,
future development costs were inadvertently deducted twice. This had the effect
of overstating reported write-downs of property plant and equipment and affected
the calculation of loss on sale of oil and gas properties under full cost
accounting.


The net effect of the errors, which commenced in the fourth quarter of 2006, was
to increase property, plant and equipment by $13.9 million to December 31, 2007,
with an offsetting decrease to deficit. At the end of the quarter ending March
31, 2008 the increase in property, plant and equipment was $12.6 million, again
with an offsetting decrease in the reported deficit. The revisions had no effect
on reported cash flows from operating activities in any period.


Revised audited financial statements for the years ended December 31, 2006 and
2007, with revised management's discussion and analysis ("MD&A") for the two
years then ended, have been filed on the SEDAR website. Revised unaudited
interim financial statements for the three months ended March 31, 2008 and
revised MD&A were also filed on the SEDAR website.


Copies of the revised documents may be obtained at www.sedar.com or by
contacting Flagship.


Flagship is a Calgary, Alberta, Canada based crude oil and natural gas
exploration, development and production company. The class A and class B shares
of Flagship are traded on the TSX Venture Exchange under the symbols FG.A and
FG.B, respectively.

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