Grey Wolf Exploration Inc.

Grey Wolf Exploration Inc.

November 30, 2006 13:11 ET

Grey Wolf Provides Operations Update

CALGARY, ALBERTA--(CCNMatthews - Nov. 30, 2006) - Grey Wolf Exploration Inc. (TSX:GWE) today announced initial production rates on two previously announced wells in the Pouce Coupe area of Alberta:

One well in which Grey Wolf owns a 75 percent working interest has averaged 3 million cubic feet per day ("MMcf/d") of natural gas plus 70 barrels per day (bbl/d) of condensate from three zones over the past week and continues to have capability to produce at this rate today.

Another well in which Grey Wolf owns a 100 percent working interest has been on production for 5 days, averaging 1.9 MMcf/d from one zone and is still producing at that rate today. Two additional zones in this well have been completed and will be placed on production at a later date.

Grey Wolf is also pleased to announce that it has amended its recently announced contract with Duke Energy Field Services Canada ("Duke") to provide for an additional 2 MMcf/d of firm transportation and gas plant capacity, giving Grey Wolf a total of 8 MMcf/d of firm service when the pipeline begins operations this spring. Grey Wolf understands that Duke has elected to increase the size of the proposed pipeline from 6 inches to 8 inches in diameter.

Grey Wolf's Pouce Coupe area production is still subject to curtailments due to third party gas plant and pipeline constraints. Some production from other wells has been restricted to allow the two new wells to be placed on production. Current company-wide production is approximately 2,250 barrels of oil equivalent per day ("boe/d"), excluding approximately 400 boe/d currently curtailed. The Company intends to bring two previously announced wells into production in the Pouce Coupe area in the near future.

Bob Watson, CEO, stated "the significance of the Duke - Grey Wolf arrangement and the fact that Duke has elected to expand the project at this early date, reinforces the Company's belief that the capacity constraints will soon be behind us, opening up our current lands to a significant program of development drilling in the future. The Duke pipeline agreement provides Grey Wolf with virtually unlimited capacity for production expansion. Our previously announced capital expenditure budget will largely be spent during the first quarter of 2007, leaving us the opportunity to evaluate external factors such as commodity prices, service costs, and market conditions, to determine the feasibility of an expanded capital program for the remainder of 2007. Given the initial success of the recent wells, the possibility of an early upward revision in production guidance for 2007 is increased."

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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