Exxel Energy Corp.
TSX VENTURE : EXX

Exxel Energy Corp.

October 09, 2007 11:03 ET

Exxel Energy Corp. Provides Operational Update

HOUSTON, TEXAS--(Marketwire - Oct. 9, 2007) - Exxel Energy Corp. (TSX VENTURE:EXX) and its subsidiaries (collectively "Exxel" or the "Company") are pleased to provide a summary update of operations on each of its current properties. The Company continues to actively pursue exploration and production activities in each of its key focus areas and has made significant operational progress to date.

OPERATIONAL UPDATE

Greater Green River Basin, Wyoming - Exxel has interests in approximately 115,000 gross acres (over 30,000 net acres) in the Greater Green River Basin.

Greater Jade Prospect. Exxel has interests in over 30,000 gross acres (over 10,000 net acres). The acreage is contiguous acreage and the Company has an average working interest in the area of approximately 30%. The Company is currently participating in the drilling of two (2) wells on a non-operated basis and is also operating the completion of a third well. The Company has drilled and cased the Wynn Federal #1 well at a total vertical depth of 11,975 feet and has encountered potential gas pay zones in the Mesaverde section. Exxel is operating the completion of the Wynn Federal #1 well and will have 100% working interest through the remainder of completion activities. Exxel is also participating in the Jade 7-10 well (44% working interest BPO, 33% APO), which recently set surface casing at 2,027 feet. Drilling will resume upon arrival of a larger rig to take the well to a total depth of 11,160 feet. Exxel is also participating in the Puckett Federal #1 well (43% working interest), which recently reached a total depth of 11,410 feet. Open hole logs and mud logs indicate significant potential gas-bearing sections within the Mesaverde in what the Company believes is a basin-centered gas accumulation (BCGA) depositional model.

Two recent wells, targeting the Mesaverde section, drilled by Exxel's operating partner in the Greater Jade Prospect region are the # 2 Luman Rim well and the Stengel State #1 well, which drilled to 11,230 feet and 10,250 feet, respectively, and had initial production rates of 2.0 million cubic feet per day ("MMcf/d") and 2.8 MMcf/d, respectively(1). The Puckett Federal #1 is a direct offset to the #2 Luman Rim well. The Company has identified 200 potential drilling locations (70 net locations to Exxel) on 160 acre spacing in the Greater Jade Prospect.

In the Greater Jade Area, several other operators are actively staking and permitting Fort Union Big Red Coal wells. Exxel's acreage will be directly offset by a number of these locations. Exxel's management team believes any success by competitors in this developing coalbed methane (CBM) play could significantly impact the Company's resource potential in this area.

West Dimaggio Prospect. Exxel has interests in approximately 5,480 gross acres (4,250 net acres). The Company's average working interest in the area is 78%. The Company is currently permitting a well to be drilled on this prospect targeting both the highly-prospective Lewis and Lance zones. The Company has identified 10 potential drilling locations (8 net to Exxel) on 160 acre spacing in the West Dimaggio Prospect.

In the western Green River Basin region, SWEPI (a subsidiary of Royal Dutch Shell) is currently drilling an 18,500 foot horizontal Cretaceous Frontier test offsetting Exxel's leasehold. The Company continues to monitor results closely.

Williston Basin, North Dakota - Exxel has interests in approximately 12,500 gross acres (8,700 net acres) in the Williston Basin. The Williston Basin of North Dakota and Montana is among the most active in North America and continues to see a high level of horizontal drilling activity, with the Bakken and Mission Canyon reservoirs as the primary objectives.

The Company has drilled and cased (through the vertical hole portion) the Sabina Hecker #1 well, which is at a total measured depth of 13,099 feet (total vertical depth of 9,316 feet). The Sabina Hecker #1 well is a southeast offset to a producing Mission Canyon Fryburg horizontal well, which has produced over 100,000 barrels of oil to date and is still on production(2). The Company plans an acid stimulation of the well, which has swabbed oil from the open-hole Fryburg section. In addition, Exxel has identified 5 potential drilling locations (3 net to Exxel) on 320 acre spacing in the Greater Steenbok Prospect area.

Columbia River Basin, Washington - Exxel has interests in over 740,000 gross acres (approximately 415,000 net acres) in the Columbia River Basin ("CRB").

Exxel has assumed operatorship of the Brown 7-24 from EnCana Oil & Gas (USA) Inc. Exxel and other working interest owners will continue to analyze the Brown 7-24 well data to determine future completion activities. The well was drilled to a total depth of 12,668 feet.

Exxel remains committed to evaluating its top prospects in the basin within the next 6-10 months. The Company is enthusiastic about the tremendous resource potential within the Company's CRB leasehold. The previously announced acquisition from EnCana Oil & Gas (USA) Inc. allowed Exxel to gain access to several of the Company's top prospects in the basin. The Company is currently in discussions with various parties and anticipates moving forward with permitting and the eventual testing of the Company's top three prospects. Exxel anticipates beginning the permitting process in the fourth quarter of 2007.

Piceance Basin, Colorado - Exxel has interests in approximately 6,000 gross acres (4,500 net acres) in the Piceance Basin. The Company expects to participate in 8 gross wells this year in the Piceance.

Great Basin, Nevada - Exxel has interests in approximately 200,000 gross acres (200,000 net acres) in the Nevada Basin.

The Company is closely monitoring drilling and permitting activity around Exxel's current leasehold and anticipates accelerating the technical evaluation of The Company's acreage in 2008.

About Exxel Energy Corp.

Exxel, headquartered in Houston, is an independent oil and gas exploration and development company focused in the Columbia River Basin of Washington, the Greater Green River Basin of Wyoming, the Williston Basin of North Dakota, the Great Basin of Nevada and the Piceance Basin of Colorado.

In the interests of providing Company shareholders and potential investors with information regarding the Company, including the Company's assessment of its and its subsidiaries' future plans and operations, certain statements included in this press release may constitute forward-looking information or forward-looking statements (collectively, "forward-looking statements"). All statements contained herein that are not clearly historical in nature are forward-looking, and the words "anticipate", "believe", "expect", "estimate" and similar expressions are generally intended to identify forward-looking statements. Similarly, forward-looking statements in this press release include, but are not limited to anticipated developments of the Company's drilling project in and the timing thereof, the Company's drilling project in and the timing thereof, capital investment levels and the allocation thereof, pipeline capacity, government royalty rates, reserve and resources estimates, the level of expenditures for compliance with environmental regulations, site restoration costs including abandonment and reclamation costs, exploration plans, acquisition and disposition plans including farmout plans, net cash flows, geographic expansion and plans for seismic surveys. In addition, please note that statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described can be profitably produced in the future.

Such statements represent the Company's internal projections, estimates or beliefs concerning, among other things, an outlook on the estimated amounts and timing of capital expenditures, anticipated future debt levels and incentive fees or revenues or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements are only predictions. Actual events or results may differ materially. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company and the foregoing list of important factors is not exhaustive. These forward-looking statements are made as of the date hereof disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. Company shareholders and potential investors should carefully consider the information contained in the Company's filings with Canadian securities administrators at www.sedar.com before making investment decisions with regard to the Company.

(1) Production data was sourced from the Wyoming Oil and Gas Commission website and IHS data services.

(2) Production data sourced from IHS data services.

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

Contact Information