Culane Drills Successful Well at Killam, Alberta

Culane Energy has successfully drilled, completed and tested a natural gas well located at Killam in Central Alberta.

Two separate zones were perforation tested. The first zone test flowed on cleanup at a rate of 738 mcf/d of natural gas and 41 bbls/d of water. A bridge plug was set and a second zone was perforated that initially flowed at rates of 1.5 to 3.2 mmcf/d. After an 11 hour shut-in period, a 48 hour deliverability test was conducted. The final flow rate was 1.2 mmcf/d on a 1/4 inch choke with a flowing tubing pressure of 700 psi. Water production was less than 1 barrel of water during the test period. The well is currently shut-in for a 10 day pressure build-up with pressure recorders in the hole.

Natural gas production tie-in plans are underway. The pipeline tie-in point is approximately 330 meters from the well-head which has sufficient capacity for the natural gas deliverability of this well.

In addition to the natural gas tested in this well, 8 meters of oil pay was also encountered in another formation that was identified during drilling operations and after well log interpretation. Culane is currently planning a 3D seismic program as a first step in designing a horizontal drilling program to fully exploit the oil potential identified on these lands. Culane Energy Corp. owns a 100% working interest in all P&NG rights from surface to basement in this project.

Culane is an oil and gas company focused on the exploration and development of oil and natural gas in western Canada. Culane's business plan is to grow reserves and production to increase shareholder value through a focused exploration program.