Dynamic Oil & Gas Updates Canadian Activities

Dynamic Oil & Gas provides the following operational update for its properties in British Columbia, Alberta, and Saskatchewan.

Orion, British Columbia

We drilled and tested a new-pool natural gas discovery in the cretaceous-aged Blue Sky formation at Orion. Detailed mapping of 3-D seismic shot in early 2004 indicates that the pool may be three to four gas spacing units (2,000 to 2,600 acres in size).

Blue Sky wells in the area typically produce at rates ranging between 0.5 to 3.0 million cubic feet per day and pool sizes can range up to 12 billion cubic feet in size. The Company is proposing two additional wells on the structure before year-end and will begin the consultation process with stakeholders in the area immediately.

If threshold reserves can be established, we will construct a 10-kilometer (six-mile) pipeline to a gas gathering system on the west edge of our property. We have constructed a pipeline riser on the system to facilitate future tie-ins. We anticipate that these new reserves could be on stream in the first quarter of 2005.

We drilled a second test well at Orion in 2004-Q3. The C62-J well encountered a massive porous zone and tested gas and water from the base of the targeted Slave Point formation. The well was completed and production tested but failed to produce commercial quantities of natural gas. The wellbore has further potential for sidetrack drilling or water disposal and will not be abandoned at this time.

Cypress, British Columbia

Two development wells and a re-entry/completion are scheduled to be completed by year-end. A drilling license has been received for the first well and lease construction is underway. Operations are expected to commence within the next week, however, progress at the site has been slow due to wet weather and an early snowfall.

We are taking a multiple-path approach to improve area production, including a range of third-party processing initiatives and a simplified gas plant application that could speed up the approval process. Construction has not started on the gas plant although the site has been surveyed and prepared. Certain equipment has been acquired and flow lines and risers have been constructed at the site. The operator has advised us that they expect to have additional Cypress gas on stream by year-end.

Wimborne, Alberta

We anticipate spudding our 9-19 Wimborne well during the third week of September 2004. This will be our fourth well drilled at Wimborne in the past two years. Two wells were drilled in 2003, one was completed as a gas well and currently awaiting tie-in and the other was abandoned. The third well was drilled and abandoned in 2004-Q3. Dynamic, which has a 50% working interest before payout ("BPO") and a 70% working interest after payout ("APO"), will operate the drilling on behalf of itself and partner, Exceed Energy Inc.

St. Albert, Alberta

The Company is ready to proceed with a deep development well at St. Albert. The 05-01 location will test the D-3 (Leduc) formation for attic oil potential and the D-1 (Wabamun) formation for new oil reserves. We have a gas conservation facility and oil battery at St. Albert that is capable of handling several hundred barrels of new oil per day, if drilling is successful. Overall, we are planning to increase oil production from St. Albert by optimizing existing compression and water-handling facilities, and drilling up to two new wells by year-end.

Western Saskatchewan

During the first week of September 2004, Dynamic (100% BPO - 60% APO) drilled the first well of a three-well Saskatchewan exploration program. Our first test, near Bailey, has been drilled to a depth of 1,055 meters (3,460 feet), has been cased and is currently being production tested. The remaining two wells at Sandgren and Flaxcombe are targeting formations with both oil and gas potential and are expected to be drilled and evaluated within the next 45 days. All three areas are close to existing production facilities.