News Releases

November 14, 2008

Shares Outstanding:  16,096,084

TSX: “ISR”                                                                                            

International Sovereign Energy Corp. Third Quarter Results and Business Update

CALGARY, ALBERTA - November 14, 2008. International Sovereign Energy Corp. ("ISR" or the "Company") is pleased to announce its operating and financial results for the three and nine months ended September 30, 2008. These filings are available for review at www.sedar.com

Q3 2008 Highlights:

• Funds from operations for the three months ended September 30, 2008 totaled $2,845,501 or $0.20 per share, compared to $627,466 or $.05 for the same period in 2007.


• Net earnings for the three months ended September 30, 2008 totaled $1,149,936 or $0.08 per share, compared to a loss of $167,593 or ($.01) for the same period in 2007.


• Gross revenue from the sale of petroleum and natural gas in the third quarter of 2008 totaled $5,563,108 up by 124% from the same quarter last year, and up 3% and 40% from the second and first quarter of 2008 respectively.


• Operating netbacks were significantly higher for the three months ended September 30, 2008, increasing to $38.34 per boe up 100% when compared to the prior year period of $19.13 per boe, due mainly to the increase in commodity prices. Higher sales revenues were only partially offset by higher royalties and lease operating costs.

Business Update: As previously advised, a new board of Directors was elected at the Annual General Meeting of ISR on June 23, 2008. In addition new management was appointed led by Mr. Eugene Hretzay, Chief Executive Officer, and Mr. Sharad Mistry, Chief Financial Officer.

On assuming responsibility for the affairs of the Company, the Board and new management were faced with a number of significant issues, as follows:

• The credit facility with its banker had been utilized approximately to the extent of $4 million. The line of credit had been approved at maximum $6 million. Included in the bank debt was an amount of approximately $1.2 million that previous management had, immediately prior to the AGM, considered themselves entitled to as a change of control payment under their respective employment contracts and prior to the new board having been elected. The Company has instituted legal proceedings to challenge the validity of these payments.


• The Company's banker served notice that the Company was in default of its change of control covenant, as defined in the credit facility. This matter was resolved subsequently to the satisfaction of the bank although the credit facility was reduced to $4,000,000 with an extension date to September 30, 2008. However, at September 30, 2008, the credit facility was not being utilized and is available.


• At June 30, 2008, ISR was in arrears with its obligations under the Pakistan farm in agreements related to the Sukkur and Sujawal fields. These obligations exceeded $1,000,000. During the 3rd quarter, an amount of $500,000 related to the Sukkur development was transferred and the requirement to issue a performance bond guarantee related to the Sujawal field was posted subsequent to September 30, 2008. ISR has now complied with its financial obligations.


• In Ecuador, ISR was in default of its obligations to Petro Ecuador and seriously in arrears with various suppliers regarding the Charapa/Conejo Concession work program. Subsequent to September 30, 2008, ISR renewed the performance bond of USD$2.3 million, and prepared a revised work program after meeting with Petro Ecuador officials.


• The Charapa/Conejo license is held by the ISR wholly owned subsidiary, Bellwether International Inc. (BII). The effective date of the share purchase was March 23, 2008, and was only recorded in the Company financial statements effective the second quarter. However, and as reported on in the second quarter financial results, certain indentified loans payable by BII to previous shareholder corporations or their subsidiaries, approximately in the amount of $14.5 million, all of which were subject to assignments by the owner of the shares of BII to the then current owner of the BII shares, had not been assigned by the previous owner of BII to ISR at the date of the transfer of the shares to ISR. This omission by previous management is the subject of ongoing negotiations with the seller of the BII shares and so that ISR will be the beneficiary of the assignments, as had originally been contemplated. ISR anticipates resolution to this matter with limited financial effect.


• The board and management reviewed the property portfolio of ISR and determined that potential existed to increase the production base within Canada. Accordingly, various projects were identified as having significant potential to achieve results and these were prioritized according to the cost and the time to bring these on stream. The first of these projects was Berwyn 7-11, which was brought into production on November 1, 2008. The flow rate is not at its full potential due to testing of the gathering system, but it is anticipated to be in the range of 250 BOED. This represents an increase of 25% over existing production.


• During the quarter, Koonj Well #1A in the Sukkur development was successfully tested and is now being prepared for tie-in into the gas gathering system. Initial flows from this first well is 224 BOED to ISR and is now in the process of being tied-in for commercial sales.


• The depth and extent of the credit crisis has greatly affected commodity prices, ISR like all other commodity based businesses, is feeling the effect of these changes. As a junior player in the global energy market, the Company has no influence on the macro metrics that affect profitability and sustainability. It does, however, have greater control of its internal operations and, accordingly, strict cash control has been exercised from the date the new board and management assumed responsibility for the Company.

The result of effective cash management has placed ISR in an enviable position in that cash flow from operations is no longer required to discharge debt or pay interest costs, but is now available for further development of its properties.

In summary, in the four short months since assuming responsibility for the affairs of ISR, the board and new management have been able to use the positive cash flow from operations, plus the benefit of a share issue in a difficult credit and equity market, to move the Company forward with a sound capital program that will build production, increase profitability and cash availability, while restoring sound operational and fiscal relationships with its international partners. It has also eliminated debt, reduced and controlled overhead expenditures and placed the Company on a sound financial base on which to grow.

In the event that commodity prices decline further from current levels, ISR is well placed to weather this, again through careful cash management, which may include reducing capital programs, while capitalizing on the internal opportunities that require low capital expenditure as related against their performance potential.

For further information, please contact:

Eugene Hretzay
President & CEO
T: [403] 263 - 2472
F: [403] 264 - 7035
ehretzay@isove.com

Reader Advisories

Forward-Looking Statements: This news release contains certain forward-looking statements, including management's assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, 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 foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

BOE may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

This news release is not for dissemination in the United States or to U.S. persons.