Grey Wolf Exploration Inc.

Grey Wolf Exploration Inc.

March 27, 2008 15:42 ET

Grey Wolf Provides Operational Update and Year End Results

CALGARY, ALBERTA--(Marketwire - March 27, 2008) -


Grey Wolf Exploration Inc. (TSX:GWE) ("Grey Wolf" or "the Company") is pleased to provide an operational update and announce its financial and operating results for the year ended December 31, 2007:

Exploratory Drilling Update

The Petitot exploration program, located in northwestern Alberta, has been successful this winter. Three 100 percent wells have been drilled and cased and gas has been discovered in three of our five play types in the area.

The well drilled at 2-17-121-11 W6M flowed at a controlled rate of 9 million cubic feet per day ("MMcf/d") from the Slave Point with excellent pressure and no trace of water. We are investigating a winter 2008/2009 tie-in into an existing pipeline which will need to be recommissioned and is located one mile away from the well. Based on current data, this well could be flowed at rates between 3 to 6 MMcf/d (500 to 1,000 barrels of oil equivalent per day ("boe/d")). This discovery validates the interpretive approach Grey Wolf has applied to the Slave Point in the area, using both 3-D and re-processed 2-D seismic and brings into sharp focus, four other Slave Point anomalies on our acreage. A 60 square kilometer 3-D seismic program just completed this winter may yield more locations.

At 14-1-123-11 W6M, the Klua Evie members of the Horn River formation were drilled vertically, cased, perforated and fraced. The well flowed sweet gas at rates more than enough to prove up the presence of this resources play on our acreage. Three horizontal wells targeting this play are already planned for drilling next winter. Grey Wolf's land spread in this area contains 100 horizontal drilling opportunities with ample room for expansion.

The new field wildcat in 2-7-123-10 W6M found gas in the Keg River, the primary target in this well, but technical difficulties and the onset of Spring Breakup prevented full evaluation. This will be completed next year, and we believe we have sufficient encouragement to schedule additional drilling for the winter of 2008/2009.

At Valhalla, our deep Kiskatinaw test is still drilling towards the primary target and total depth. Encouraging shows have been observed while drilling, in multiple horizons typical of the area.

The other three exploration wells in our 2008 program are scheduled for drilling after breakup.

Exploitation Activities

At Caroline, an existing producer (16.5 percent GWE working interest) has been recompleted in an up-hole reservoir and has flow tested at 5.5 million cubic feet per day ("MMcf/d"). This well will be tied in and commence production shortly.

In the Pouce Coupe area, an existing well (50 percent GWE working interest) has been twinned for shallow gas shown behind pipe in the existing well. This shallow well has been tested at 2 MMcf/d and will be placed on production through existing facilities in the near future.

Horizontal drilling of Doig and Montney reservoirs on the Peace River Arch has been seen to yield increased efficiency in the exploitation of this Canadian, large scale resource play.

Grey Wolf intends to concentrate on horizontal drilling on its extensive acreage position in this resource play at Pouce Coupe, with the first such well scheduled to be spud after Spring Breakup. The Company has 50 net locations suitable for horizontal exploitation on its acreage at this time and accelerated development with significant impact on production profiles can easily be envisaged.

2007 Year End Results

- Grey Wolf invested $49.8 million during the year ending December 31, 2007. This resulted in the working interest proven plus probable reserve additions of 1,324 thousand barrels of oil equivalent ("Mboe"), offset by negative revisions of 1,132 Mboe and working interest annual production of 762 Mboe.

- Grey Wolf's 2007 capital program was aimed at developing proven undeveloped and probable reserves. During the year, we were successful in upgrading our total reserves, increasing proved developed producing by 17%.

- Three year finding and development costs (2005 - 2007), including change in future development costs, and including revisions, are $21.85 per boe for total proved reserves, and $18.15 per boe for proved plus probable reserves.

- Daily production in 2007 averaged 2,168 boe per day and production during the fourth quarter of 2007, averaged 2,458 boe per day. Production was impacted by plant turn arounds, repair and curtailment at various times throughout the year and these numbers do not reflect the Corporation's production capacity.


except per Three Months Ended Year Ended
share Dec. 31, Dec. 31, Percent Dec. 31, Dec. 31, Percent
amounts) 2007 2006 Change 2007 2006 Change

Oil and
natural gas
revenue $ 9,902 6,614 50 $36,194 37,356 (3)
Funds flow
operations 3,670 2,296 60 15,113 17,430 (13)
Per share-
basic 0.11 0.08 38 0.45 0.57 (21)
Per share-
diluted 0.11 0.07 57 0.44 0.55 (20)
Net income
(loss) (804) (331) 143 (935) 3,352 (128)
Per share-
basic (0.02) (0.01) 100 (0.03) 0.11 (127)
Per share-
diluted (0.02) (0.01) 100 (0.03) 0.10 (130)
($/boe) 22.50 23.52 (4) 25.29 27.36 (8)
Average daily
(boe/day) 2,458 1,553 58 2,168 2,156 (1)
expenditures 7,177 11,291 (36) 49,841 62,265 (20)
dispositions - (164) - - (30,953) -
Total debt,
working capital
deficiency 36,387 31,491 16
Total assets 150,332 113,842 32

Three Months Ended Year Ended
Dec. 31, Dec. 31, Percent Dec. 31, Dec. 31, Percent
2007 2006 Change 2007 2006 Change

Crude oil -
per day 238 354 (33) 289 360 (20)
Natural gas -
Mcf per day 11,791 6,425 84 9,968 9,141 9
NGLs -
barrels per
day 254 127 100 218 272 (20)
boe - barrels
per day 2,458 1,553 58 2,168 2,156 1

Average prices
Oil & NGL
($ per barrel)73.20 55.24 33 66.90 62.03 8
Natural gas
($ per Mcf) 6.06 7.04 (14) 6.53 6.91 (6)
($ per boe) 43.79 46.31 (5) 45.73 47.48 (4)

($ per boe
@ 6:1) 12.73 13.92 (9) 11.16 8.76 37

($ per boe) 22.50 23.52 (4) 25.29 27.36 (8)

Gross wells 2 4 12 25
interest wells 1.5 0.7 8.6 12.7
Success rate,
net wells 33% 100% 88% 76%

"Funds flow from operations", "Funds flow - basic", and "Funds flow -
diluted", are not measures that have any standardized meaning prescribed by
Canadian GAAP and are considered non-GAAP measures. Therefore, these
measures may not be comparable to similar measures presented by other
issuers. These measures have been described and presented in this media
release in order to provide shareholders and potential investors with
additional information regarding the Company's liquidity and its ability
to generate funds to finance its operations.

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.

The management's discussion and analysis, full financials and annual information form associated with this release will be posted on the Company's website and on SEDAR today.

Grey Wolf Exploration Inc. ("Grey Wolf" or the "Company") is engaged in the business of exploration for, development and production of crude oil, natural gas and natural gas liquids in the Province of Alberta.

Forward-Looking Statements - Certain statements contained in this Media Release constitute forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. We believe the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this Annual Information Form should not be unduly relied upon. These statements speak only as of the date of this Media Release. We assume no obligation to revise or update these statements except as required pursuant to applicable securities laws.

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