Culane Energy Corp.
TSX VENTURE : CLN

Culane Energy Corp.

January 16, 2006 14:28 ET

Culane Announces Operations Update

CALGARY, ALBERTA--(CCNMatthews - Jan. 16, 2006) - Culane Energy Corp. (TSX VENTURE:CLN)("Culane") - Culane commenced horizontal drilling operations at its Killam North property on October 27th 2005. Since October 27th the Company has completed drilling 4 new multi-leg horizontal wells and is presently drilling a fifth multi-leg horizontal well. The first well, a double leg horizontal, was placed on production November 20, 2005 and is currently producing 270 barrels of oil per day with a 2% water cut. The second well, a triple leg horizontal, was placed on production December 15, 2005 and is currently producing 275 barrels of oil per day with a 2% water cut. The third well, a triple leg horizontal, was placed on production January 11, 2006 and is currently producing 315 barrels of oil per day with a 15% water cut. This well has yet to stabilize and it is still recovering load water from the drilling operation. The fourth well, a triple leg horizontal, has been drilled and is currently being completed for production. The fifth well, a double leg horizontal, is currently drilling and is expected to be on production by early February. On November 15, 2005 Culane drilled and cased one vertical test well at Killam North and plans to drill another vertical test well in late January to further delineate the pool. Pipeline grade crude oil is currently being trucked from Killam North to market. Culane owns a 50% working interest and is the operator of the Killam North oil pool.

At Redwater North the Company plans to deepen and convert an existing well to water disposal and drill one triple leg horizontal well in the Ellerslie formation after drilling operations at Killam North are completed. Culane owns a 100% working interest and is the operator of the Redwater North property.

At Nelson the Company is currently re-surveying a vertical well location and surveying a horizontal well location. Both locations will be licensed and Culane intends to drill Nelson after horizontal drilling operations at Redwater North are completed. Culane owns a 100% working interest and is the operator of the Nelson property.

Culane is a junior oil and gas company engaged in the exploration, development and production of oil and natural gas in Alberta. Culane currently has 18.9 million common shares outstanding which trade on the TSX Venture Exchange under the symbol "CLN".

Additional information on Culane may be found on www.sedar.com and its ongoing drilling operations on the Companies website at www.culaneenergycorp.com.

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

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