Grey Wolf Exploration Inc.

Grey Wolf Exploration Inc.

April 11, 2006 11:00 ET

Grey Wolf Exploration Inc. Corporate Update

CALGARY, ALBERTA--(CCNMatthews - April 11, 2006) - Grey Wolf Exploration Inc. ("Grey Wolf") (TSX:GWE) announced today that it has received notice from PrimeWest Energy Trust terminating the Caroline Farmout Agreement ("the Agreement") effective November 21, 2005, pursuant to its terms and conditions. According to the Agreement, PrimeWest now has until May 21, 2006, to exercise the buyback option which allows PrimeWest to purchase that portion of the Caroline Farmout Lands which has been developed and assigned proved or probable additional reserves by a third-party engineer, for a purchase price equal to the fair market value thereof less $1,000,000. The fair market value is deemed by the Caroline Farmout Agreement to be the present value of the estimated future net cash flows from such properties, before tax, from proven reserves and 50% of probable additional reserves, evaluated according to National Policy 2-B, at a discount rate of 10% per annum, employing an escalating price forecast. As at December 31, 2005, the portion of the Caroline Farmout Lands that have been developed represent 28.3% of the corporate fourth quarter 2005 production. "Grey Wolf has a large inventory of investment opportunities and will have no problem in reinvesting these funds to the advantage of our shareholders," stated Vince Tkachyk, President and Chief Operating Officer of Grey Wolf. "Further details will be announced once they become available."

Grey Wolf also announced today that it has entered into a new $50 million credit facility, replacing the Company's existing $16 million facility. The new credit facility, which was arranged with another Canadian chartered bank, consists of a $50 million revolving demand loan. Proceeds will be used for general corporate purposes.

"We are pleased to enter into this new credit agreement," stated Mr. Tkachyk. "It has terms that are more flexible than before, recognizing the significant growth and success experienced by Grey Wolf during the past year."

Grey Wolf is an independent Alberta-based, junior oil and natural gas company involved in the development and production of natural gas and crude oil in the Western Canadian Sedimentary Basin. Its common shares trade on the Toronto Stock Exchange under the symbol "GWE".

Forward-Looking Statements - Certain information set forth in this document, including management's assessment of Grey Wolf's future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Grey Wolf's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Grey Wolf's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements. No assurance can be given that any of the events anticipated will transpire or occur, or if any of them do so, what benefits Grey Wolf will derive from them. Grey Wolf disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The calculation of barrels of oil equivalent ("boe") is based on a conversion ratio of six thousand cubic feet of natural gas to one barrel of oil to estimate relative energy content and does not represent a value equivalency - boes may be misleading, particularly if used in isolation.

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