Excelsior Energy Limited
CNQ : EXEL

Excelsior Energy Limited

July 16, 2007 09:00 ET

Excelsior Closes Acquisition of Private Company for an Additional 22.5% Interest in the Hangingstone Oil Sands Asset

CALGARY, ALBERTA--(Marketwire - July 16, 2007) - Excelsior Energy Limited (CNQ:EXEL) ("Excelsior" or the "Company") is pleased to announce that further to its press release dated May 3, 2007 it has closed the acquisition of all of the issued and outstanding shares of a private company ("PrivateCo") to acquire an additional 22.5% working interest, after earning, in its Hangingstone oil sands asset ("Hangingstone Asset"), near Fort McMurray, Alberta. Excelsior's working interest will increase to 75% in the Hangingstone Asset after fulfilling its farm-in earning obligations.

Excelsior acquired all the common shares of PrivateCo in exchange for the consideration outlined below. In addition to its interest in the Hangingstone Asset, PrivateCo has approximately $1,200,000 in working capital.

a) 10 million common shares of Excelsior with a deemed value of $0.58/share was issued to PrivateCo shareholders on closing of the transaction pursuant to a purchase and sale agreement, whereby the common shares were deposited with an escrow agent subject to a voluntary escrow agreement with release provisions of 25% every three months;

b) 3 million common shares of Excelsior will be issued when an independent qualified engineering evaluator engaged by Excelsior allocates and assigns to the Hangingstone Asset a value greater than 75,000,000 barrels of gross recoverable bitumen in National Instrument 51-101 compliant probable and possible category prior to December 31, 2009; and

c) 3 million common shares of Excelsior will be issued when an independent qualified engineering evaluator engaged by Excelsior allocates and assigns to the Hangingstone Asset a value greater than 150,000,000 barrels of gross recoverable bitumen in National Instrument 51-101 compliant probable and possible category prior to December 31, 2010

The Hangingstone Asset consists of 39 contiguous sections (24,960 acres) in Township 86 and 85, Range 9 W4M Alberta, approximately 28 km south of Fort McMurray, located in close proximity to a number of active SAGD projects in various stages of development. The productive reservoir is the McMurray Formation which is comprised of high quality fluvial and estuarine channel sands. Wells drilled on the Hangingstone Asset and in immediately adjacent sections confirm the presence of the reservoir sands with net bitumen sand thickness ranging up to 37 meters.

In addition, the Company is pleased to report that on July 9, 2007 the Board of Directors of approved the grant of 4,800,010 stock options to purchase common shares of the Company, exercisable at $1.44 per share, under the terms of the Company's Stock Option Plan to Management and Directors and a consultant.

About Excelsior:

The Company is active in oil sands exploration and appraisal in the Hangingstone area near Fort McMurray, Alberta and also holds a 100% working interest in Blocks 16/1a and 16/6c in the UK North Sea and minor interests in gas production in Alberta.

The Company strategy is to capture oil and gas appraisal and development opportunities where we can leverage Management's diverse international and heavy oil experience and field development expertise, which includes heavy oil reservoir engineering and development of geologically complex fields. The scale of the oil sands resource opportunity in Alberta complements Excelsior's international portfolio and strategy.

Forward-Looking Statements: This news release contains statements about future events that are forward looking in nature and, as a result, are subject to certain risks and uncertainties such as changes in plans or the occurrence of unexpected events. Actual results may differ from the estimates provided by management. Readers are cautioned not to place undue reliance on these statements.

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