SOURCE: Fellows Energy Ltd.

December 21, 2006 07:50 ET

Fellows Receives Final Reserve Report on Carbon County Project

Proven Reserves Estimated to Be in Excess of 10.5 BCF

BROOMFIELD, CO -- (MARKET WIRE) -- December 21, 2006 -- Fellows Energy Ltd. (OTCBB: FLWE) ("Fellows"), an oil and gas company focused on exploration and production of natural gas and oil in the Rocky Mountain Region, announced today that the Company has received the final reserve report that was initially reported on November 21 by the independent engineering firm of MHA & Associates. Fellows and its joint venture partner Thunderbird Energy Corp. each hold a 50% interest in the Carbon County project. MHA & Associates has assigned in excess of 10.5 billion cubic feet (BCF) of gas to proven reserve categories. Proven reserves are made up of approximately 1.3 BCF of proven developed producing (PDP), 2.2 BCF proven developed non-producing (PDNP) reserves, and in excess of 6.9 BCF in the PUD (proven undeveloped) category. Proven reserves plus probable and possible reserves are estimated to be in excess of 25 BCF.

The report shows that over the life of the property, the net income Before Federal Income Taxes (BFIT) solely from the proven reserves is $27.5 million and the Discounted Net Income is approximately $17 million. These forecasts, using "Nymex Forecasted Prices and Costs," are based on reserve estimates and assuming the area of the field encompassing the proven reserves is fully developed by November of 2007. Those economic values do not include any potential contribution from the probable and possible reserve categories. Reserve estimates included in this study were assigned on the basis of the most current SEC and Society of Petroleum Engineers (SPE) and World Petroleum Council (WPC) definitions -- (www.spe.org/spe/jsp/basic/0,,1104_12169,00.html).

"We are very pleased to have this detailed report," said George Young, President of Fellows Energy. "The reserve report showing in excess of 10.5 BCF of gas in the proven reserve category, and net income potential of over $17 million from this one property, shows that we are successfully executing on our plan of acquisitions of properties at conservative prices and increasing production resulting in increased cash flow, and we expect to perform additional work on the project with the aim of expanding the reserve base."

About MHA Petroleum Consultants Inc.

MHA's highly trained professionals work on a wide variety of complex reservoir management problems in almost every petroleum province throughout the world. The typical MHA professional has 20 years in the industry -- 15 of those providing consulting services -- and is professionally registered. We utilize a full complement of computer-related tools available for reservoir description and analysis. Its multi-disciplinary reservoir management team provides a fully integrated analysis of reservoir performance. For additional information please go to www.mhausa.com.

About Fellows Energy Ltd.

Fellows is an early stage oil and gas company led by an experienced management team which is focused on exploration and production of natural gas and oil in the Rocky Mountain Region using both traditional and new technologies. The current strategy is to pursue both short- and long-term opportunities to leverage its large acreage position in the Rockies, which management believes are characterized by reasonable entry costs, favorable economic terms, high reserve potential relative to capital expenditures and the availability of existing technical data. For additional information please go to www.fellowsenergy.com.

Safe Harbor Statement

This press release may contain forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. Examples of such forward-looking information would be statements regarding financing, acquisition of properties, and terms including "probable," "possible," or "recoverable" reserves among others. There are many risk factors that could cause our expectations and beliefs to fail to materialize: competition for new acquisitions; availability of capital; unfavorable geologic conditions; the complexity of coal bed methane exploration and production; and prevailing prices for natural gas and general regional economic conditions. Management hopes these transactions will bring additional value to the shareholders of Fellows Energy. There is no guarantee that the projects that Fellows has recently acquired will increase the value of its shares of common stock, or that Fellows will acquire rights to explore and operate any other such projects, or that in the event that it acquires rights to explore and operate other such projects, that these actions will be successful or increase the value of Fellows' common stock.

Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission ("SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as probable, possible and potential, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 10-KSB, File No. 0-33321, available from us at 370 Interlocken Boulevard, Suite 400 Broomfield, Colorado 80021. You can also obtain this form from the SEC by calling 1-800-SEC-0330. Fellows assumes no obligation to update the information contained in this press release.

Contact Information

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    Fellows Energy Ltd.
    George S. Young / Shane Reeves
    303-926-4415

    Investor & Public Relations
    Harvey Goralnick / Alison Hart
    212-752-9445
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