Pearl Exploration and Production Ltd.

Pearl Exploration and Production Ltd.

October 20, 2006 15:40 ET

Pearl Exploration and Production Ltd.: Onion Lake Land Agreements Signed; Pearl Proceeding With Drilling

CALGARY, ALBERTA--(CCNMatthews - Oct. 20, 2006) - The Cree Nation and Pearl Exploration and Production Ltd. ("Pearl" or the "Company") (TSX VENTURE:PXX) are pleased to announce that negotiations have been successfully concluded with the Onion Lake First Nation ("OLFN") of Saskatchewan/Alberta, resolving their land dispute.

Negotiations have resulted in the parties executing detailed, final agreements on October 20, 2006 subject only to the issuance of the applicable leases by Indian Oil and Gas Canada. The Company previously announced the signing of a Letter Agreement in respect of their settlement that outlined the commitments and undertakings of the parties.

Pearl CEO Gary Guidry stated, "We are excited about having concluded these negotiations and that we are now able to begin working with the Onion Lake First Nation to add to our existing production volumes with a significant development drilling program."

Chief Henry Lewis of the Nation stated his optimism of the new amended agreement, "Our position has reversed, and we feel the proposed revenue will benefit the Band. I am very confident that our new partners will live up to their agreement. Our next step is to provide the details to our band membership scheduled for October 26, 2006."

Pearl will now begin its planned multi-well, multi-rig development drilling program along a Dina heavy oil trend, initially announced on March 14, 2006. The successful negotiations have resulted in additional lands becoming available and additional drilling opportunities for the Company such that up to sixty (60) wells may be drilled in the first phase of development this fall and winter.

Pearl is a public company focused on delivering disciplined growth by establishing a North American portfolio of oil and gas projects with an emphasis on large resource opportunities. Additional information on Pearl is available on our website at:

Forward-looking statements: This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans. Actual results may differ materially from those projected by management. For such statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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