SOURCE: Lotta Coal, Inc.

September 14, 2007 15:29 ET


CALGARY, AB--(Marketwire - September 14, 2007) - To our shareholders:

We have made great progress in building value in the company. We would like to update you on where we stand.

Lotta Coal, Inc. (PINKSHEETS: LCOL) (FRANKFURT: LC5) is a unique oil and gas company with three separate operating subsidiaries, each with rights to explore and develop oil and gas resources in partnership with different First Nations commercial entities in Northern Alberta, Canada. As previously announced, in order to effect the transaction, the Company contributed its entire interest in its three subsidiaries to a newly formed special purpose corporation. Subsequent to this transaction, Cunningham Adams, a Barbados-based investment fund, committed an investment of USD$8 million into the special purpose corporation.

To date, approximately $2 million has been received and the balance of approximately USD$6 million will be drawn by the company according to its requirements to fund operations. In all, the Company has been able to assemble over 100,000 acres of land, all with a 100% interest. It successfully drilled seven out of seven wells and re-entered a further successful well in the Boyer field, and is preparing engineering for tie-in to infrastructure and further drilling in the Boyer and Lesser Slave areas. Over $4,800,000 has been invested since September 2006 on drilling and acquisition activities, In addition the Company will acquire up to 12,000 hectares of additional lands this fall, drill two wells and undertake a 3D seismic program to select further drilling locations on its Peace Arch property by the winter.

The company is pursuing sources of financing sufficient to fund its capital requirements which include a new listing on a more recognized securities market, which, of course, are subject to regulatory approvals and general market conditions

As you may be aware, the company was initiated as a "shell company" intended to pursue reverse takeover opportunities. The company's current management entered into the transaction for the purpose of attracting capital to fund its current business plan. As the company's current management later learned the promoters of the shell company may not have complied with all the proper legal requirements and these promoters are the subject of regulatory proceedings brought by the Ontario Securities Commission. The current management and significant shareholders have never been affiliated with the original promoters and we are cooperating with the regulatory authorities in their investigation. Significant time and effort has been expended to bring the company into compliance with all legal requirements and to protect the company's shareholders.

As we meet our corporate objectives we will provide continuing updates to our shareholders.

Very truly yours,

Nicolas Matossian,


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