Echo Energy Canada Inc.
TSX VENTURE : EEI

Echo Energy Canada Inc.

December 21, 2007 14:41 ET

Echo Energy Canada Inc.: News Release

LONDON, ONTARIO--(Marketwire - Dec. 21, 2007) - Echo Energy Canada Inc. (TSX VENTURE:EEI) ("Echo Energy") announced today that on December 18, 2007, Justice Morawetz of the Superior Court of Justice issued an injunction, on terms, enjoining Echo Energy's Board of Directors (the "Board") from proceeding with the private placement that was approved by a majority of the Board at a special meeting called by Salvatore Fuda and held on November 20, 2007. The purpose of the proposed private placement is to raise funds to finance the development of Echo Energy's gas reserves.

The injunction arises out of an action filed by three shareholders of Echo Energy, namely Salvatore Fuda, Challenge Gas Holding AB ("Challenge"), and Exclusive Asset Management Inc. ("Exclusive") against Echo Energy and five of its directors, namely Gary Conn, Michael Hunter, Robert Moore, David Johnstone, and Salvatore Pacifico (the "Fuda Action"). The plaintiffs allege that the defendants have engaged in conduct contrary to section 248 of the Ontario Business Corporations Act.

Mr. Fuda controls Challenge and Exclusive and is Chairman and a director of Echo Energy. Mr. Fuda, Challenge, and Exclusive are part of a control group purportedly holding directly and indirectly 51.9% of the common shares of Echo Energy. Mr. Fuda voted against the private placement at the November 20, 2007 Board meeting.

The order of Justice Morawetz provides that Echo Energy can proceed with a private placement that permits Mr. Fuda to acquire 52% or all of the shares to be issued under the proposed private placement. Justice Morawetz ordered Mr. Fuda to post $2 million as security to demonstrate his commitment to take up the private placement in its entirety, which must be posted no later then January 11, 2008.

The Board is defending against the Fuda Action. A meeting of the Board will be held to strike a special committee to address issues raised in the Fuda Action, including an appeal of the order of Justice Morawetz.

On December 20, 2007, Mr. Fuda issued an unauthorized press release in the name of Echo Energy without the Board's consultation or approval. The press release is an incomplete summary of the decision of Justice Morawetz and the Board does not share the views expressed in the press release.

About Echo Energy

Echo Energy is a publicly traded energy company with revenue producing natural gas production operations near Port Burwell Ontario, Canada on the shores of Lake Erie.

Certain statements in this press release are forward-looking statements including specifically forward-looking statements relating to management's approach to operations, estimates of future sales, production and deliveries, business plans for drilling and development, estimated amounts and timing of capital expenditures, anticipated operating costs, royalty rates, cash flows, transportation plans and capacity, anticipated access to infrastructure or other expectations, beliefs, plans, goals, objectives, assumptions and statements about future events or performance. The reader is cautioned that the assumptions used in the preparation of such information, although considered reasonable by Echo at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; fluctuations in oil and gas prices; the results of exploration and development drilling and related activities; the uncertainty of estimates and projections relating to productions, costs and expenses; uncertainties as to the availability and cost of financing; fluctuations in currency exchange rates; the imprecision in reserve estimates; risks associated with oil and gas operations, such as operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; the weather in the Company's area of operations; the ability of suppliers to meet commitments; changes in environmental and other regulations; actions by governmental authorities including changes in laws and increases in taxes; decisions or approvals of administrative tribunals; the effect of acts of, or actions against international terrorism; and other factors, many of which are beyond the control of Echo. There is no representation by Echo that the actual results achieved during the forecast period will be the same in whole or in part as those forecast.

Issued Common Shares: 52,779,515

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

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