SignalEnergy Inc.

March 27, 2006 23:59 ET

SignalEnergy Inc. Press Release

CALGARY--(CCNMatthews - March 27) - Today, Pearl Exploration and Production Ltd ("Pearl") has announced its intention to make an offer to acquire all of the issued and outstanding shares of SignalEnergy Inc. (TSX:SGI) ("Signal").

As previously announced on March 10, 2006, the Company completed the final stage of a sale of assets for aggregate gross proceeds of approximately $100 million. Signal also reiterated its intention to distribute to shareholders the net proceeds after repayment of all debt.

In consideration of Pearl's announced intentions and in compliance with its fiduciary obligations, to maximize shareholder value, the Board of Directors has decided to defer the decision of a shareholder distribution so that it can consider other strategic alternatives. In this regard, the Company has engaged FirstEnergy Capital Corporation ("FirstEnergy") as its independent financial advisors to consider the proposed Pearl offer and consider alternative transactions which could return greater value to shareholders than the proposed distribution of sale proceeds and the retention or future sale of the remaining operating entity.

Upon Pearl mailing an offer to Signal shareholders, the Board of Directors of Signal will make a recommendation to shareholders 10 days following such mailing.

Caution to Reader

This news release contains forward-looking statements and the reader is cautioned not to place undue reliance on these statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predications, forecasts, projections and other forward-looking statements will not occur.

This news release is not for dissemination in the United States or to any United States news services. The common shares of Signal have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

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