Exall Energy Corporation
TSX : EE

Exall Energy Corporation

December 23, 2008 11:41 ET

Exall Energy Announces Outstanding Production Test at Marten Mountain

CALGARY, ALBERTA--(Marketwire - Dec. 23, 2008) - Exall Energy Corporation ("Exall Energy" or the "Company") (TSX:EE) is pleased to announce the completion of the Marten Mountain development wells planned for the fourth quarter of 2008.

Highlights

- The latest of two Q4 horizontal wells in the Marten Mountain area has been completed and production tested at 1,132 barrels per day of 43 degreesAPI sweet oil and 460 mcf per day of solution gas from the Gilwood sand over a 45 hour period,

- The first horizontal well has been completed as a water injection well as planned.

The latest of two horizontal development wells planned for the Marten Mountain property in the fourth quarter of 2008 has been drilled to its target, completed and production tested. The 7-12-75-6W5 HZ well flowed at an average rate of 1,132 barrels per day of 43 degreesAPI sweet oil and 460 mcf per day of solution gas during a 45 hour production test (1,209 boe per day, net 798 boe per day to Exall). The Company is currently equipping the well for production prior to year end. The 7-12 well is located 0.5 kilometers to the north-east and up-dip of the 102/14-1-75-6W5 discovery well, extending the productive trend and adding several new locations to the Company's inventory of drilling locations. Exall has 66% working interest in the well and offsetting lands.

The first well of the Q4 program has been completed as a water injection well. The 2-2-756W5 HZ well is located 1.5 kilometers to the southwest and down dip of the 102/14-1 and 7-12 wells, in an optimal position for water injection and pressure maintenance. A water injectivity test performed on the well indicates capacity to replace voidage for the two producing wells. The water injection well will allow the Company to apply for Waterflood Project status and Good Production Practice (GPP) approval, which will allow unrestricted production rates from the 102/14-1 and 7-12 wells, as well as subsequent development wells.

"This is an exciting new extension of the Marten Mountain oil play and puts Exall on track to meet its production target of 800 barrels per day by year-end and Q1 2009 exit target rate of 1,000 barrels per day" stated Stephen G. Roman, Executive Chairman of Exall. "Together with the recently announced flow-through financing, this discovery continues to build a solid asset base for Exall with long life production that will allow the Company to weather the current market and be well positioned to take advantage of new opportunities."

About Exall

Exall Energy Corporation is a junior oil and gas company active in its business of oil and gas exploration, development and production from its properties in Alberta, British Columbia and Texas.. The Company's common shares are listed on the Toronto Stock Exchange under the trading symbol EE.

Reader Advisory

This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including those relating to results of operations and financial condition, capital spending, financing sources, commodity prices and costs of production. By their nature, forward-looking statements are subject to numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, actual results may differ materially from those predicted. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such factors include fluctuating commodity prices, capital spending and costs of production, and other factors described in the Company's most recent Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. Such forward-looking statements are made as at the date of this news release, and the Company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

In this news release, natural gas has been converted to a barrel of oil equivalent (boe) using 6,000 cubic feet equal to one barrel (6:1). The boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore boe may be misleading if used in isolation. This conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

Contact Information

  • Exall Energy Corporation
    Frank S. Rebeyka
    Vice Chairman & CEO
    (403) 815-6637
    or
    Exall Energy Corporation
    Roger N. Dueck
    President & COO
    (403) 237-7820 x 223
    Email: rd@exall.com
    Website: www.exall.com