Athlone Energy Ltd.
TSX VENTURE : ATH

Athlone Energy Ltd.

October 01, 2007 14:33 ET

Athlone Energy Ltd.

Second Quarter Report Ending July 31, 2007

CALGARY, ALBERTA--(Marketwire - Oct. 1, 2007) - Athlone Energy Ltd. (TSX VENTURE:ATH) ("Athlone" or the "Company") is pleased to announce that the Company's second quarter ending July 31, 2007 together with the related management's discussion and analysis has been filed. For a complete copy of the report please visit www.sedar.com or the Company's website at www.athlone.com.

The second quarter represented continued growth in terms of revenue, cash flow, production and reserve additions. Gross revenue in the second fiscal quarter was $1,584,941 compared to $1,289,456 in the first quarter, an increase of 23%. This was the highest revenue in the company's history.

Financial highlights of the second quarter compared to the second quarter of the previous year are:

- Gross revenue of $1,584,941 compared to $879,140 an increase of 80%

- Operating cash flow of $739,792 compared to $315,539 an increase of 134%

- Average production of 369 boepd compared to 190 an increase of 94%.

- Due to spring break up in May and June and county applied road restrictions, a number of road infrastructure improvements have been made in the county in which Athlone operates. This will positively affect the production next year.

Operational highlights of the second quarter are as follows:

- Two wells were drilled and cased at South Lloydminster, AB and two wells at Vermilion, AB. These 100% working interest wells were completed in June and July and are now on production.

- The two wells at Vermilion confirmed the aerial extent of a new Sparky oil pool that was discovered earlier this year. These two wells were placed on production initially at a rate of approximately 75 boepd each. The production has recently been stepped up to 100 boepd for each well with additional capacity to increase production without affecting long term reservoir performance. Twenty additional locations have been proved up on 40 acre spacing in this pool.

- At Grand Forks in Southern Alberta, Athlone exercised its drilling option on the farm-in with an intermediate sized trust. The first well will be drilled prior to October 31, 2007. The primary target is medium oil and, if successful, a number of follow-up locations will be selected.

- A re-entry in west central Alberta, completed in the second quarter and targeting light oil, tested 100% water and is currently suspended. The well has an up hole gas zone that will be considered when natural gas pricing improves.

Based on the success of the Vermilion wells Athlone is currently evaluating its capital budget for the remainder of the year. Average production for the month of August was 630 boepd consisting of 90% heavy oil, 5% light oil and 5% natural gas. Oil prices are forecast to remain strong which will provide a strong platform for future growth. Should natural gas pricing improve Athlone also has a number of drill ready gas locations that can be drilled.

About Athlone Energy Ltd.

Athlone Energy Ltd. is an active junior oil and gas exploration company with core assets in Alberta and Saskatchewan. For further information, please refer to the Company's website: www.athlone.com or alternatively on www.sedar.com.

The term barrels of oil equivalent "boe" may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (6 mcf) to one barrel (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 term "operating cash flow" does not have a meaning assigned under GAAP and represents cash flow generated from operations before deducting non-cash expenditures.

This information contains forward-looking statements (forecasts) under applicable securities laws. Forward-looking statements are necessarily based upon assumptions and judgments with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, and the regulatory and legal environment. Many of these factors can be difficult to predict. As a result, the forward-looking statements are subject to known or unknown risks and uncertainties that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements.

Copyright (C) 2007 ATHLONE ENERGY LTD. (TSX VENTURE:ATH) All rights reserved. For more information visit our website at http://www.athlone.com/ or send mailto:info@athlone.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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