Admiral Bay Resources Inc.
TSX VENTURE : ADB

Admiral Bay Resources Inc.

January 18, 2007 17:49 ET

Admiral Bay Announces Settlement of Actions

CENTENNIAL, COLORADO--(CCNMatthews - Jan. 18, 2007) - Admiral Bay Resources Inc. (TSX VENTURE:ADB) (the "Company") announces that it has settled two actions that the Company was a party to relating to activities of prior management.

The first was a lawsuit brought against the Company's wholly-owned subsidiary, Admiral Bay (USA), Inc., in the United States District Court for the District of Kansas by Charter Capital Resources, Inc. ("Charter"), the Company's former joint venture partner in its Swordfish project in Kansas. The lawsuit was related to a dispute over payments under a joint venture agreement. In settlement of the action, the Company has issued 750,000 common shares at a deemed price of $0.90 per share, which will be issued to three designees of Charter. Under the settlement agreement, Charter has agreed to discontinue its action against Admiral Bay (USA), Inc. relating to its US$634,000 investment in the project and reassign its interests in 6 wells and 4,000 acres in the Swordfish Project. In addition to the standard hold period of four months, there are further resale restrictions imposed on these shares under the settlement such that one third of the shares will become free trading after the expiration of the original four month hold period, an additional one third will become free trading three months later and the balance will become free trading after an additional three months.

In the second, Chemterra International Consultants Ltd. ("Chemterra") had brought an action in the Superior Court of Justice in Ontario against James Bay Energy Inc. ("James Bay"), Admiral Bay's former JV partner and operator in the Company's Moose River CBM project in northern Ontario. The action related to $128,415.21 in unpaid invoices for work performed by Chemterra on the project. James Bay subsequently added the Company as a third party to the action. Under the settlement agreement, the Company has issued to Chemterra 125,000 common shares at a deemed price of $1.00 per share and paid Chemterra $30,000 cash to settle. Chemterra has released Admiral Bay from any claim regarding the work Chemterra provided on the Moose River Project, and has assigned the Company its claim against James Bay. Admiral Bay is pursuing claims against James Bay and some of its officers for breach of contract and the failure of James Bay to act as prudent Operator.

All common shares issued relating to the above settlements are subject to a hold period in Canada that expires on May 19, 2007.

In addition, the Company's wishes to announce results from its Annual General Meeting, held at its Denver office on January 16, 2007. The shareholders have approved re-election of the current Directors and the appointment of McGovern, Hurley, Cunningham LLP as the Company's auditor for the ensuing year. The shareholders did not approve amendment to the current stock option plan and any grants made under the plan. Directors re-elected for the ensuing year are Steven Tedesco, Logan Magruder, Greg McMichael, Ronald Phillips and Vern Swanson. All officers were also reappointed for the coming year - Steve Tedesco as President and Chief Executive Officer, Robert Carington as Chief Financial Officer and Curt Huber as Vice-President of Corporate Development.

Admiral Bay Resources Inc. (www.admiralbay.com) is an emerging unconventional gas production company focused on the development of projects in the Cherokee Basin in southeast Kansas and the Appalachian Basin in Pennsylvania. Admiral Bay is listed on the TSX Venture Exchange under the symbol ADB.

Statements in this release that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned that any such statements are not guarantees of future performance and that actual developments or results may vary materially from those in these "forward-looking statements".

The TSX Venture Exchange does not accept responsibility for the adequacy of this release.

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