Cheyenne Energy Inc.

Cheyenne Energy Inc.

October 16, 2006 09:00 ET

Cheyenne Confirms an Oil Discovery at Hawk

CALGARY, ALBERTA--(CCNMatthews - Oct. 16, 2006) - Cheyenne Energy Inc. (TSX VENTURE:CHY) ("The Company") re-entered the exploratory well bore at 3- 30-97-19 W5M that was drilled at the end of 2005, completed a fracture stimulation operation on the Gilwood zone and perforated additional Gilwood sand. The fracture was needed due to significant water loss into the reservoir during the drilling of the well. These additional perforations were done after re-examination of the original samples and logs taken during the drilling process. These logs indicate 10 metres of oil bearing Gilwood sand. The company considers this to be a significant discovery as there is no Gilwood production within 50 km of this well.

As reported earlier the Company installed a pumpjack on the well, however mechanical difficulties with the pumpjack and weather related issues prevented an earlier release of information. The pumpjack has been operating steadily since October 7, 2006. With the pumpjack now working on a steady basis the well is producing 56 degree API light oil along with the remaining drilling fluid. The well is producing approximately 15 barrels per day. The Company believes that the lost drilling fluid is hampering the production from the reservoir, and as this fluid is produced the production rate should increase. The Company has researched alternate methods of drilling and fluid systems that should overcome these drilling problems and enhance deliverability of future wells. Drilling logs and samples indicate the reservoir to be in line with other Gilwood wells which typically produce significantly more than our initial well.

The Company has 23 sections of land on a geologically defined structural high that trends both North East and South West from this location. Cheyenne has working interests of between 80% and 95% in these lands and with the positive results from this well the Company will continue to invest significant energy and resources into the Hawk area to further develop this Gilwood field.

This press release contains forward-looking statements. These forward-looking statements can generally be identified as such because of the context of the statements including words such as the Company "believes", "anticipates", "expects", "plans", "may", "estimates" or words of a similar nature. These statements are based on current expectations and are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Accordingly, readers are cautioned and no assurances can be given that any of the events anticipated by the forward-looking statements will occur, or if any of them do so, what benefits that we will derive there from. The Company does not undertake any obligation to publicly update or revise any forward-looking statements.

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

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