Grey Wolf Increases 2005 Capital Expenditure Program

The Board of Directors of Grey Wolf Exploration reports that as a result of the Company's recent drilling success, it has authorized a second increase in 2005 capital spending to a total of $32 million from the previously approved $25.0 million. The 2005 capital program will continue to be funded internally. This 28 percent increase enables Grey Wolf to immediately follow up on its successful drilling locations.

The revised program consists of drilling 23 gross (16.9 net) wells and the recompletion of 8 gross (4.7 net) wells, of which 11 gross (7.3 net) wells have been drilled and cased and 6 gross (3.3 net) wells have been recompleted to August 31, 2005 and are in various stages of testing or tie-in. Remaining in the program for 2005 are 12 gross (9.7 net) wells to be drilled and 2 (1.4 net) recompletions. Grey Wolf has contracted two drilling rigs for the winter drilling season to ensure that the balance of the 2005 program can be completed.

"The corporate results posted to-date are testimony to the quality of our asset base and the strength and expertise of the team we have assembled", stated Robert L. G. Watson, Chairman and Chief Executive Officer of the Company. "The rise in capital spending, continued strength in commodity prices and our success with the drill bit, should continue to create outstanding growth for our shareholders."

As a result of the increased capital program, Grey Wolf has raised its production targets as follows:

- Forecast 2005 average daily production to in excess of 2,200 boe/d (from previous guidance of 2,150 boe/d)

- Forecast 2005 exit rate to in excess of 3,000 boe/d (from previous guidance of 2,500 boe/d)