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

Cobalt Energy Ltd.

November 27, 2007 09:00 ET

Cobalt Announces 3rd Quarter 2007 Financial Results

CALGARY, ALBERTA--(Marketwire - Nov. 27, 2007) -

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

Cobalt Energy Ltd. ("Cobalt" or the "Company") (TSX VENTURE:CB.A) (TSX VENTURE:CB.B)is pleased to announce that it has filed with applicable Canadian securities regulatory authorities its unaudited third quarter financial statements and related Management Discussion and Analysis for the three months ended September 30, 2007. These filings are available for review at www.sedar.com.

Highlights

- Cobalt was active during the third quarter acquiring Crown mineral rights, conducting seismic programs, and drilling one (1.0 net) exploration well as it executes the initial phase of its exploration and drilling program.

- The Company increased its working interest across nine sections of undeveloped land at Boundary Lake from 55% to 100%.

- Cobalt acquired 2,560 acres (four sections) at 100% working interest of undeveloped Crown land in its core exploration area in East Central Alberta.

- Seismic activity included shooting 15 km of new proprietary seismic at Boundary Lake. This program concludes the seismic required to support the first phase of drilling at Boundary Lake. At East Central Alberta the Company evaluated 35 km of trade seismic and subsequently shot 15 km of new proprietary seismic.

- At September 30, 2007, Cobalt had $4,599,983 in cash and short term deposits, a working capital surplus of $4,074,379 and no outstanding bank debt.

- Subsequent to the third quarter, Cobalt entered into an agreement to acquire 12,000 net acres of undeveloped land and approximately 20 boe/d production at Woking Alberta, located in the Peace River Arch region in exchange for $375,000 in cash, subject to certain adjustments and provisions.

Activity Update

Cobalt is in a pre-production stage of a junior oil and gas exploration company. Its initial areas of operational focus include the Peace River Arch and East Central Alberta. The Company anticipates activity during the remainder of the year to be directed towards the Boundary Lake prospect located in the Peace River Arch. At Boundary Lake, Cobalt has assembled 5,760 acres (nine sections) of undeveloped multi-zone lands. In September, the Company increased its working interest across these lands to 100% and expects to move forward with its drilling program with an industry partner, retaining an 80% production interest to Cobalt. During the quarter the Company drilled one (1.0 net) well at Boundary Lake targeting shallow natural gas which was abandoned. The primary geological zone of interest at Boundary Lake is the Triassic formation which contains liquids rich natural gas reserves at moderate depths. Cobalt is now prepared to commence the first phase of drilling into the Triassic formation at Boundary Lake, and prior to year end expects to operate the drilling of one (0.8 net) exploration well and one (0.8 net) development well.

Additional activity in the Peace River Arch area occurred subsequent to the quarter with Cobalt entering into an acquisition agreement to acquire assets at Woking Alberta. The acquisition will establish the Company's initial production at approximately 20 boe/d consisting of 70% light crude oil (70% operated). The property includes approximately 12,000 net undeveloped acres, and Cobalt has identified a number of well re-completion opportunities and possible drilling opportunities which are anticipated to increase the current production. In addition, the property holds potential for a waterflood project which may contribute to additional oil production in the future.

The East Central Alberta exploration region is expected to see a lower activity level than the Peace River Arch region. Currently, Cobalt holds 2,560 acres (four sections) of undeveloped land at 100% working interest. To date the Company has evaluated approximately 35 km of trade seismic and has subsequently shot approximately 15 km of proprietary 2D seismic over its lands. Interpretation of the proprietary seismic is underway and drilling plans will be determined after the seismic evaluation is completed.

Outlook

Cobalt's activity for the remainder of 2007 and into early 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. At the end of the third quarter, the Company has an estimated $4.8 million remaining of its flow-through obligation. The majority of capital expenditures will be directed towards the Peace River Arch area with drilling at Boundary Lake and several well recompletions at Woking, pending the closing of the acquisition. Concurrently, we anticipate adding to our current undeveloped land position in multi-zone regions of Alberta, and build our production base. Acquisitions remain 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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