Grey Wolf Exploration Inc.

Grey Wolf Exploration Inc.

March 16, 2005 15:00 ET

Grey Wolf Exploration Inc. Updates 2005 Capital Expenditure Program


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: GREY WOLF EXPLORATION INC.

TSX SYMBOL: GWE

MARCH 16, 2005 - 15:00 ET

Grey Wolf Exploration Inc. Updates 2005 Capital
Expenditure Program

CALGARY, ALBERTA--(CCNMatthews - March 16, 2005) - Grey Wolf Exploration
Inc. (TSX:GWE) ("Grey Wolf") is pleased to release the following 2005
operating data in an effort to ensure that its shareholders and the
Investment Community have a better understanding of its $14.7 million
2005 Capital Program.

Grey Wolf intends to fund its 2005 capital program entirely from cash
flow. The Program is directed towards the drilling of 16 gross (8.5 net)
wells and the recompletion of 5 gross (1.7 net) wells throughout the
year. Due to early spring breakup, our Valhalla drilling program has
been delayed until ground conditions improve. Production is expected to
increase as follows:



2004 2005 Percent
Estimate Forecast Change
------------------------------------------------------------------------
Average Production (boe per day) 1,578 2,100 +33%
Exit Production Rate (boe per day) 1,611 2,375 +47%

Selected Estimated Data:
------------------------

- Average corporate royalty rate 23.5 percent
- Lease operating expenses of approximately $4.74 per boe
- General and administrative expenses of
approximately $ 3.39 per boe
- Depletion, depreciation and amortization of
approximately $15.71 per boe
- 2005 weighted average shares -basic (000's) 27,973
- 2005 weighted average shares - fully diluted (000's) 30,470
- Grey Wolf price differential off Edmonton Posting:
crude - $0.80 per bbl and natural gas - AECO less $0.27 per MMBTU
(average heating value 1,039 BTU per scf)


Mr. Bob Watson, Chairman and Chief Executive Officer of Grey Wolf stated
"In addition to completing the planned 2005 capital program, we intend
to expand capital spending to ensure prudent investment of all available
cash flow. Our debt free position, combined with our internally
generated project inventory for exploration and acquisitions, will
position us well for the upcoming year."

Grey Wolf is an Alberta-based oil and natural gas company involved in
the development and production of natural gas and crude oil in the
Western Canadian Sedimentary Basin. It's 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.

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Grey Wolf Exploration Inc.
    Dawne L. Stirling
    Manager, Investor Relations and Corporate Secretary
    (403) 218-1473
    Email: dstirling@greywolf.ca
    Website: www.greywolf.ca