Rally Energy Corp.

Rally Energy Corp.

March 29, 2005 08:00 ET

Rally Energy Corp. Announces Major 2004 Reserves Additions


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: RALLY ENERGY CORP.

TSX VENTURE SYMBOL: RAL
FRANKFURT SYMBOL: RLE

MARCH 29, 2005 - 08:00 ET

Rally Energy Corp. Announces Major 2004 Reserves
Additions

CALGARY, ALBERTA--(CCNMatthews - March 29, 2005) -

2004 Reserves Report

Rally Energy (TSX VENTURE:RAL) (FWB:RLE) is pleased to announce that
drilling programs conducted in 2004 have more than doubled proved,
probable and possible reserves to 9.7 million barrels of oil equivalent.

- In Egypt, proved oil reserves nearly tripled to 4.0 million barrels,
probable reserves increased over 30% to 3.3 million barrels and possible
reserves increased nine fold to 1.6 million barrels.

- The developed portion of the Issaran field has an estimated 558
million barrels of oil in place.

- In Canada, Rally Energy's activities established 388,000 boe of proved
reserves and 420,000 boe of probable reserves, a 13 fold increase from
2003.

- Total Proved and Probable reserves additions of 4.8 million boe in
2004 exceeded 2004 production of 732,000 boe by a factor of 6.5 times.

- Total Proved and Probable reserves at December 31, 2004 were estimated
to have a value of $122 million discounted at 5% ($108 million
discounted at 10%) with Canadian reserves accounting for approximately
14% of those estimated values.

Rally Energy's corporate reserves as at December 31, 2004 were
independently evaluated by DeGolyer & MacNaughton Canada Limited in
accordance with the requirements of Canadian National Instrument NI
51-101. On a consolidated basis, recognized reserves in Egypt and Canada
as at December 31, 2004 are as follows:



BOE(6:1) Dec. 31, Dec. 31, Increase
2004 2003 Factor
------------------------------------------
Proved
Egypt 3,967,076 1,416,179 2.8x
Canada 387,638 31,805 12.2x
-------------------------
Total Proved 4,354,714 1,447,984
-------------------------
-------------------------

Proved plus Probable
Egypt 7,260,559 3,947,687 1.8x
Canada 807,997 61,527 13.1x
-------------------------
Total 2P 8,068,556 4,009,214
-------------------------
-------------------------

Proved, Probable and
Possible
Egypt 8,855,469 4,121,780 2.1x
Canada 807,997 61,527 13.1x
-------------------------
Total 3P 9,663,466 4,183,307
-------------------------
-------------------------


Reserves Outlook For 2005

Egypt - Ras Issaran

Rally Energy produced and sold in excess of 723,000 barrels of oil in
Egypt during 2004 and managed to nearly triple Proved oil reserves and
nearly doubled Proved and Probable oil reserves. Oil production in 2003
was approximately 414,000 barrels. Substantial additional reserves are
expected to be added in Egypt during 2005 as drilling activities
continue. Currently, the Corporation plans to drill 21 Ras Issaran wells
in 2005, with a majority of those wells directed at high productivity
potential in fractured Upper and Lower Dolomite formations. This program
may be expanded once confirmation is received from The General Petroleum
Company regarding our right to commence drilling in a 40 square
kilometre extension area south of our current 72 square kilometre
contract area.

Canada - Alberta Focus

In Canada, follow-up drilling in Alberta, particularly on our new
Harmattan area discovery acreage (50% working interest), is expected to
materially increase recognized Canadian reserves. Our current acreage in
the Harmattan area, including farm-in acreage, is 1,280 acres (640 net
acres). An additional 1,280 acres has been tied-up through a farm-in
option agreement under which the Corporation can earn an average net
working interest of 30%. A second well on our Harmattan acreage is
planned immediately after spring breakup road bans are lifted. Up to two
additional wells are expected to be drilled on our Harmattan acreage by
year-end. During 2004, Rally Energy produced and sold 8,700 boe in
Western Canada. Significant production increases are expected to be
achieved in 2005, commencing with the placing on-stream by mid-year of
an additional 400 boe/d.

Pakistan - Safed Koh

In Pakistan, the recently announced "Notice of Discovery" confirms the
presence of hydrocarbons in the deeper horizons of the Safed Koh Range,
located in the Middle Indus Basin of Pakistan. No reserves were
attributed to Safed Koh as at December 31, 2004, however, the
Corporation believes this is a significant gas discovery. As activities
progress on the Safed Koh Block, significant additional reserves may be
recognized during 2005. The timing and characterization of reserves
additions may be affected by the requirement to complete formal steps
leading to approval of a Development Plan and the Delineation of the
initial Discovery Area.

FORWARD LOOKING STATEMENTS

This press release may contain forward-looking statements including
expectations of future production, cash flow and earnings. These
statements are based on current expectations that involve a number of
risks and uncertainties, which could cause actual results to differ from
those anticipated. These risks include, but are not limited to: the
risks associated with the oil and gas industry (e.g., operational risks
in development, exploration and production; delays or changes in plans
with respect to exploration or development projects or capital
expenditures; the uncertainty of reserve estimates; the uncertainty of
estimates and projections relating to production, costs and expenses,
and health, safety and environmental risks), commodity price, price and
exchange rate fluctuation and uncertainties resulting from potential
delays or changes in plans with respect to exploration or development
projects or capital expenditures. Additional information on these and
other factors that could affect the Corporation's operations or
financial results are included in the Corporation's reports on file with
Canadian securities regulatory authorities: www.sedar.com.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Rally Energy Corp.
    Lamont Tolley
    President & CEO
    (403) 538-0000
    or
    Rally Energy Corp.
    Douglas C. Urch
    Vice President, Finance & CFO
    (403) 538-0000
    (403) 538-3705 (FAX)
    Website: www.rallyenergy.com
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.