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

Cobalt Energy Ltd.

March 23, 2009 18:17 ET

Cobalt Announces 2008 Year-End Results

CALGARY, ALBERTA--(Marketwire - March 23, 2009) -

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 announce that it has filed with applicable Canadian securities regulatory authorities its audited year-end financial statements and related Management Discussion and Analysis for the year ending December 31, 2008. These filings are available for review at www.sedar.com.

2008 Highlights

Cobalt was active during the year acquiring Crown mineral rights, conducting seismic programs and drilling four (2.6 net) exploration wells. The 2008 year represents Cobalt's first full year of operations and highlights are as follows:

- Successfully closed a property purchase to acquire approximately 18 boe/d production and 1,200 net acres of undeveloped land at Woking, Alberta.

- Capital expenditures in 2008 totaled approximately $4.4 million. The program included $2.8 million for drilling, $0.2 million for seismic, $0.5 million on land and property acquisitions, $0.4 million for facilities, and $0.5 million on capitalized general and administrative costs.

- Reserves additions for the year included 236 Mboe on a Proved basis and 760 Mboe on a Proved plus Probable basis as contained in the independent reserve evaluation completed by Sproule Associates Limited.

- A reserve life index of 9.3 years based on Proved plus Probable reserves and the 2009 average production rate in the Sproule engineering report.

- Finding and development costs for the year were $13.64 per boe on a Proved plus Probable basis, including future development capital.

- The Company acquired 3,200 (1,280 net) acres of undeveloped Crown land located at East Central Alberta and at Pembina, Alberta.

- Drilling activity included 4 (2.6 net) exploration wells resulting in two (0.6 net) successful wells placed on production in the first quarter 2009 and two (2.0 net) abandoned wells.

- The Company completed two equity financings for total gross proceeds of approximately $1.76 million.

- The Company fulfilled its 2007/2008 $5.3 million flow-through obligation.

Operations Update & Outlook

Cobalt began the year with a property acquisition at Woking, Alberta. The Woking property acquisition established Cobalt's initial production of approximately 18 boe/d (70% light crude oil) and the Company conducted three oil well recompletions to increase this property's production to approximately 60 boe/d at year end. Subsequent to year end, the Woking oil wells were shut-in due to unsatisfactory field netbacks under depressed crude oil pricing. The Woking property remains a viable asset with approximately 10 million barrels of oil in place. With additional capital for pipelines and water disposal facilities Woking would be expected to provide an attractive cash flow stream.

Cobalt's 2008 business plan focused on exploration and development activities which would establish a production base while incurring qualifying expenditures to fulfill the Company's flow-through obligation. This objective was successfully achieved by establishing Cobalt's initial production, exiting the year at approximately 60 boe/d, and with two exploration discoveries: a new light sweet oil prospect and a new natural gas discovery, both located in Alberta.

During the fourth quarter, 2008 Cobalt participated in the drilling of one (0.43 net) horizontal well at Pembina utilizing multi-stage fracturing technology. The well was put on extended testing in February and the Company is holding information on this well confidential pending upcoming Crown land sales in the area.

Cobalt currently holds six sections of undeveloped land on the Pembina prospect with an average working interest of approximately 31% before payout (26% after payout), plus a rolling option to farm-in on an additional 4 sections of undeveloped land with an average working interest of 43% before payout (28% after payout). At this point, the possible upside of the Pembina prospect appears encouraging; however, it requires delineation drilling to further evaluate its potential. Cobalt expects to work with its partners over the coming year to drill additional wells and to possibly increase its undeveloped land holdings. Financing for these activities is expected to be challenging while capital markets are restricted. However, the Company will pursue options to move the Pembina prospect forward including new equity, debt instruments, and possible arrangements with industry peers in order to extract shareholder value from the Pembina prospect.

Reader Advisory - This news release contains certain forward-looking statements relating to future cash flows and drilling activities, assumptions with respect to availability of financing 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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