Gaunlet Begins Ambitious Winter Drilling Program in Canada

Gauntlet Energy is set to kick off a very ambitious winter gas exploration and development program in Northern Alberta and Northeastern British Columbia starting in the next few days. This program has been three years in the making, combining the generation of prospects and the ability to act on them. Work in the third quarter was dominated by the intense planning required for the winter program. Three years of paced growth in Central Alberta and a highly effective Northern Slave Point gas exploration approach tested over two previous winter seasons has produced a corporate platform and prospect inventory to allow 10 high impact potential gas wells to be drilled this winter. The Company has contracted four rigs to accomplish this program, and is securing a fifth. The Company will also be shooting a significant amount of 3D and 2D seismic in conjunction with the drilling program to allow targeting of future locations and delineation of discoveries.

Recently, Gauntlet completed work on Slave Point gas prospect areas for the coming winter drilling season. In addition to locations added in the Lapp/Hamburg - Snowfall area, Gauntlet has three new prospect areas in the North that it plans to drill.

One of the new prospect areas is Dahl, in Northeastern British Columbia. Gauntlet recently purchased eight sections of highly prospective crown land in this area offsetting another seven sections in which it had recently increased its average interest to 50%.

In the entire Northern region, Gauntlet now has 17 Slave Point gas locations, 15 of these at 100% working interest. All of these have a target depth of 2000 to 3000 meters, with drilling costs of $1-$2 million. Ten wells of the current prospect inventory will be drilled this winter, with more possible given success and rig availability. The 17 locations are all on currently held Gauntlet land. The planned program is evenly balanced between wells offsetting established production and new pool and field targets. Additional development locations will be chosen to follow exploration successes.

Gauntlet now owns 31,600 net acres of undeveloped land highly prospective for Slave Point gas in Northern Alberta and Northeastern British Columbia.

A proprietary 3D seismic program has been commissioned to cover existing and newly acquired Crown lands in the Lapp/Hamburg area. The Company will also shoot various 2D seismic lines in new prospect areas and a proprietary 3D program over the Snowfall pool as soon as freeze-up allows. The Company anticipates drilling two wells on its four 100% sections in Snowfall. The Company has three additional sections in Snowfall at just over 50% interest.

The large scope of Gauntlet's plans for the North stems from 3 factors: (1) the success of our Slave Point exploration model and successful, coordinated execution of tie-ins proven over two winter seasons; (2) the availability of prospects over the past year in an uncertain exploration climate; and (3) the availability and reasonable cost of equipment and services.