Richards Seeks Funds to Advance CBM Activities

David Thomas, President and CEO of Richards Oil & Gas Limited said that the Corporation has entered into an agreement with Octagon Capital Corporation ("Octagon"), pursuant to which the Corporation proposes to raise through Octagon, as agent, on a reasonable efforts basis gross proceeds of up to $4 million through the sale of flow through common shares at a price of $1.00 per share. It is anticipated that this private placement will close on or before December 29, 2006.

The net proceeds will be used to further the Corporation's exploration efforts for coal bed methane and associated hydrocarbons through the western Canadian sedimentary basin where the Corporation is actively drilling and testing for coal bed methane.

The proposed transaction will be subject to TSX Venture Exchange approval.

Richards Oil & Gas Limited is a Calgary-based exploration company, involved in the development of crude oil and natural gas, with an emphasis on the exploitation of coal bed methane (CBM). With a significant land base and industry-leading experience in the development of CBM projects, the company is at the forefront of the CBM industry in Western Canada.