SOURCE: Canary Resources Inc.

November 08, 2007 09:35 ET

Canary Resources Raises Capital to Connect More Coalbed Methane Gas Wells to Southern Star Central Pipeline

STILWELL, KS--(Marketwire - November 8, 2007) - Canary Resources Inc. (PINKSHEETS: CYRR) ("Canary") announces that it has successfully negotiated the early exercise of the majority of warrants issued to investors under the Securities Purchase Agreement (SPA) of July 2005. As a result, Canary has received $1,687,500 to date from the exercise of warrants. Uses of proceeds include connecting existing methane gas wells to Canary's pipeline tap, drilling of additional wells and preparation of a reserve report.

Canary commenced continuous commercial gas production in the Eastern Forest City Basin of Kansas and Missouri in the third quarter of 2007 and has 13 producing wells on line. Canary holds a 100% working interest in three of the wells and a 50% working interest in ten wells which are part of an agreement announced in May 2007 with K C Clean Energy LLC. Canary operates all thirteen wells. Initial gas production from these wells exceeds original expectations. Canary is presently monitoring and adjusting the computerized pump control systems in order to maximize stream levels to produce gas and water at optimal efficiency. Another 8 completed wells are also connected to the gathering system. Canary is equipping the wells for production and the wells are expected to begin selling gas in November.

A further 10 gas wells have been drilled and completed in the vicinity of the compressor, and are awaiting connection to Canary's wholly-owned interconnect on the Southern Star Central Gas Pipeline. These 10 wells require pipeline, down-hole pumps and surface equipment to produce gas into Southern Star.

It is anticipated that a total of 29 of the wells will be connected and selling gas by the end of the fourth quarter of 2007. Canary has filed drilling intents for an additional 10 wells in the vicinity of its pipeline interconnect.

Canary now has 45,439,425 common shares and 18,125,000 convertible preferred shares outstanding, for a basic equivalent of 63,564,425 common shares, compared with 55,126,925 equivalent common shares previously. The number of fully diluted shares, including options and unexercised warrants, remains unchanged at 70,099,425.

Canary Resources Inc. is independent Oil and Natural Gas Company engaged in the acquisition, exploitation, production and development of oil and natural gas properties in Johnson and Miami Counties, Kansas, and in Bates and Cass Counties, Missouri, for which it is the operator.

Additional information on Canary Resources Inc. is available from:
Canary Investor Relations Department
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Portions of this document include "forward looking statements," which may be understood as any statement other than a statement of historical fact. Forward-looking statements contained in this document are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. We have tried, whenever possible, to identify these forward-looking statements using words such as "anticipates", "believes", "estimates", "expects", "intends", "plans", "potential" and similar expressions. Actual results may vary materially from management's expectations and projections expressed in this document. Certain factors that can affect the Company's ability to achieve projected results include, among others, production variances from expectations, uncertainties about estimates of reserves, volatility of oil and gas prices, the need to develop and replace reserves, the substantial capital expenditures required to fund operations, environmental risks, drilling and operating risks, risks related to exploratory and development drilling, competition, government regulation and the ability of the Company to implement its business strategy.

Copyright 2007. All rights reserved Canary Resources Inc.

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