Dune Acquires Goldking

Dune Energy, Inc. on Tuesday closed its previously announced purchase of 100% of the capital stock of Goldking Energy Corp. The purchase price consisted of $302.5 million in cash, plus 10,055,866 shares of Dune common stock valued at $18.0 million as of April 13, 2007.

As of December 31, 2006, Goldking had independently engineered proved reserves of 112.4 Bcfe. By category, this includes 48.5 Bcfe of proved developed producing, 28.8 Bcfe of proved developed non-producing, and 35.1 Bcfe of proved undeveloped reserves. Approximately 56% of total proved reserves is natural gas. In addition to proved reserves, management has identified an additional unrisked net 35.5 Bcfe of probable reserves covering 14 locations. Net investment required to develop these probable reserves is estimated at $19.0 million. The Goldking properties consist of 65,000 net acres located in prolific producing areas. The purchase price also included a sizeable 3-D seismic library covering several of the major fields.

Based upon total consideration of $320.5 million, the implied cost per Mcfe of proved reserves is $2.85, and $2.17 per Mcfe if probable reserves are included. Dune anticipates allocating additional value to unproved properties and other assets at a later date.

The Goldking properties are located onshore the Louisiana and Texas Gulf Coast, and consists of interests in 23 fields and 136 producing wells. Goldking operates more than 90% of its production, and maintains a 100% working interest in many of the more important properties. The vast majority of the Goldking fields, such as Garden Island Bay located in Plaquemines Parish, Louisiana, were former legacy assets of major energy companies. These fields have produced significant volumes over time, but have not had current technology or meaningful capital applied to further exploitation, or exploration of deeper pools. Dune now has a multi-year inventory of diversified projects in a key domestic producing hydrocarbon basin.

Combining Goldking assets with Dune's existing asset base creates a company with 142 Bcfe of proved reserves as of December 31, 2006, covering 28 fields along the Louisiana and Texas Gulf Coast, as well as on the fairway of the north Texas Fort Worth Basin Barnett Shale play. Dune operates and holds a 100% working interest in the Barnett Shale properties.

First quarter production for the combined entity averaged 27 MMcfe/d, while current combined production is more than 30 MMcfe/d. Numerous additional wells are slated to come on production during the second quarter of 2007. These wells, combined with a very active drilling program throughout the remainder of the calendar year, should result in significant production volume increases by year end.

The acquisition was funded with proceeds from the issuance of $300.0 million of 10.5% Senior Secured Notes due 2012 plus $180.0 million of 10% Senior Redeemable Convertible Preferred Stock. In addition, Dune retired $93.7 million of indebtedness with proceeds from the financing. The remainder of the funds will be used for general corporate purposes, and fees and expenses.

Alan D. Gaines, Chairman of the Board of Directors and Dune's founder, stated, "This is a landmark event for Dune Energy, which will provide strategic critical mass for our stockholders and employees. Our properties have significant low risk development, considerable upside within the probable reserves category, and numerous company making exploration opportunities with respect to deeper pool tests and sub salt drilling not identified in our independent engineering reports. Our management team, led by James A. Watt, Chief Executive Officer and President, has a proven track record and the extensive Gulf Coast experience and knowledge required to successfully operate these properties and exploit the enormous upside potential. This transaction is immediately highly accretive to cash flow, production, and reserves on a per share basis."

Watt added, "Our goal is to grow production and cash flow, coupled with a low cost structure within our highly focused areas of operation. Our drilling program for 2007 is weighted to low risk development locations in order to ramp cash flow and lower debt leverage through the drillbit. Our portfolio of projects will be strictly IRR driven."

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