Cobalt Energy Ltd.
TSX VENTURE : CB.A
TSX VENTURE : CB.B

Cobalt Energy Ltd.

January 08, 2008 15:51 ET

Cobalt Closes Property Acquisition

CALGARY, ALBERTA--(Marketwire - Jan. 8, 2008) -

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES FOR DISSEMINATION IN THE UNITED STATES.

Cobalt Energy Ltd. (TSX VENTURE:CB.A) (TSX VENTURE:CB.B) ("Cobalt" or the "Company") is pleased to report that it has completed the property acquisition previously announced on November 22, 2007 . After normal closing financial adjustments, Cobalt paid approximately $320,000 in cash for producing assets and undeveloped lands.

The acquisition establishes Cobalt's initial production of approximately 20 boe/d (70% light crude oil) at Woking Alberta, located within the Company's primary core area of the Peace River Arch. The acquisition also provides an estimated 16,000 boe Proven plus Probable reserves, and land holdings comprised of 8,480 gross acres (3,600 net acres) with approximately 1,200 undeveloped net acres.

Drilling Update

In December 2007, Cobalt drilled its first exploration well into the Triassic formation at its Boundary Lake prospect located in the Peace River Arch at an 80% working interest. The well has been cased and the Company plans to evaluate the well's potential over the coming weeks. A second well in this prospect is expected to be drilled late in the first quarter 2008, at an 80% working interest, targeting liquids rich natural gas reserves. To date, the Company has evaluated approximately 80 km of trade and proprietary 2D seismic over its lands to support the initial well locations.

Outlook

The Company's activity during 2008 will focus on fulfilling its flow-through obligation of $5.3 million by drilling a portion of our current exploration inventory and by conducting seismic programs in our core areas. The majority of capital expenditures will be directed towards the Peace River Arch with drilling at Boundary Lake, and well recompletions plus possible drilling at Woking. Concurrently, we anticipate adding to our current undeveloped land position in multi-zone regions of Alberta, and building our production base. Further acquisitions are a part of Cobalt's growth strategy and the Company is continually evaluating property or corporate acquisition opportunities which are well-suited to its business plan.

Reader Advisory - This news release contains certain forward-looking statements, which include assumptions with respect to completion of an acquisition, increase to production and reserves and use of capital. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements 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, tax treatment (including royalties), 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 therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. 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 or boe/d may be misleading particularly if used in isolation. A BOE conversion of 6mcf:1bbl is based as an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the well head.

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

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