Grey Wolf Exploration Inc.
TSX : GWE

Grey Wolf Exploration Inc.

May 13, 2009 17:42 ET

Grey Wolf Exploration Inc.- Pouce Coupe/Valhalla Reserves Update and Results of Resource Studies

CALGARY, ALBERTA--(Marketwire - May 13, 2009) -

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Grey Wolf Exploration Inc. ("Grey Wolf") (TSX:GWE) today announced an update to proved plus probable reserves in its Pouce Coupe/Valhalla core area and results of resource studies.

In connection with the search for strategic alternatives, Grey Wolf initiated an engineering review of its most significant producing reserves at Pouce Coupe/Valhalla and a review of the resource potential on its lands. In a report prepared by GLJ Petroleum Consultants ("GLJ"), proved plus probable reserves in the Pouce Coupe/Valhalla area as of December 31, 2008, were determined to be 9,340 thousand barrels of oil equivalent ("Mboe"), which is only two percent less than the DeGolyer & MacNaughton ("D&M") determination of 9,575 Mboe. Both D&M and GLJ evaluated the same lands and included the use of horizontal drilling and multi-stage fracturing treatments of the Montney and Doig formations. Given the close comparison of the evaluations, Grey Wolf believes that this gives greater confidence in its reserve evaluation as these results are within the normal margins of error, and there were no major differences in the reports, though GLJ did assign lower proved and higher probable reserves to the lands than did D&M.



Pouce Coupe and Valhalla

Reserves Volumes (Mboe) Difference
Reserves Category D&M GLJ Mboe Percent

Proved 4,965 3,651 -1,314 -26

Probable 4,610 5,688 +1,078 +23

Proved + Probable 9,575 9,340 -235 -2


The GLJ review was only in respect of the Pouce Coupe/Valhalla reserves which represents only a portion of the total reserves of Grey Wolf, which as reported earlier are 7,163 Mboe proved, and 14,105 Mboe proved plus probable. It is to be noted that the estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

GLJ also performed a resource evaluation of the Doig and Montney formations on the Pouce Coupe/Valhalla lands. The report concludes that the working interest proved plus probable plus possible reserves are 56,397 million cubic feet ("MMcf") and the contingent resources are 71,741 MMcf for the high estimate, and working interest proved plus probable reserves are 44,255 MMcf and the contingent resources are 32,209 Mcf for the best estimate. This provides a combined range from a best estimate of 76,463 MMcf to a high estimate of 128,138 MMcf. This supports Grey Wolf's contention that considerable reserves plus resources remain undeveloped on their lands. A summary of the resource report has been posted to the Grey Wolf website (www.greywolf.ca).

A resource study of the natural gas potential in the Horn River Shales of the Petitot area of northwestern Alberta was undertaken, on behalf of Grey Wolf by AJM Petroleum Consultants of Calgary ("AJM"). The report indicates that the raw undiscovered natural gas resource initially in place under Grey Wolf lands ranged from a low of 473 billion cubic feet ("Bcf") to a high of 941 Bcf. This equates to 11.8 Bcf per section, ranging up to 23.5 Bcf per section in the 40 sections of 100 percent Grey Wolf lands deemed to be in the play. AJM has identified these resources as undiscovered and accordingly there is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. Grey Wolf has not booked any reserves in the Horn River Shales at Petitot.

It is to be noted that a vertical well drilled by Grey Wolf (100%) in the winter of 2007/08 at 14-1-123-11 W6M tested gas at 1.4 million cubic feet per day from the Klua Evie section of the Horn River Shales, after a 16 tonne frac. This resource report has also been posted to the Grey Wolf website (www.greywolf.ca).

Mr. Robert L. G. Watson, Chairman and Chief Executive Officer of Grey Wolf said, with reference to the new reports, "These are merely small steps towards the recognition of the complete reserve potential in the Doig and Montney at Pouce Coupe, and the Horn River Shales at Petitot. We see the potential for a dramatic increase in Grey Wolf's reserves over time."

Grey Wolf is an Alberta-based oil and natural gas company involved in the exploration, development and production of natural gas and crude oil in the Western Canadian Sedimentary Basin. Grey Wolf operates horizontal resource plays in the Doig and Montney of the Peace River Arch and the Horn River Shale at Petitot. Conventional operations include the gas reservoirs of the Slave Point at Petitot and the gas reservoirs in the Cardium, Viking and Mannville at Caroline. The Company's common shares trade on the Toronto Stock Exchange under the symbol "GWE".

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.

Definitions of Reserves:

Proved Reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

Probable Reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved + probable reserves.

Possible Reserves are those additional reserves that are less certain to be recovered than probable reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved+probable+possible reserves.

Definitions of Resources:

Total Petroleum Initially-In Place ("PIIP") is that quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered (equivalent to "total resources").

Discovered Petroleum Initially-In-Place (equivalent to discovered resources) is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially in place includes production, reserves, and contingent resources; the remainder is unrecoverable.

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation state. Contingent Resources are further classified in accordance with level of certainty associated with the estimates and may be subclassified based on project maturity and/or characterized by their economic status.

Unrecoverable is that portion of Discovered or Undiscovered PIIP quantities which is estimated, as of a given date, not to be recoverable by future development projects. A portion of these quantities may become recoverable in the future as commercial circumstances change or technological developments occur; the remaining portion may never be recovered due to the physical/chemical constraints represented by subsurface interaction of fluids and reservoir rocks.

Undiscovered Petroleum Initially-In-Place (equivalent to undiscovered resources) is that quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be discovered. The recoverable portion of undiscovered petroleum initially in place is referred to as "prospective resources", the remainder as "unrecoverable."

Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be subclassified based on project maturity.

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.

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