Cobalt to Complete $2MM Financing

Cobalt Energy Ltd. intends to complete a private placement of up to 2,000,000 Class A Common Shares at an issue price of $0.30 per Common Share and up to 4,000,000 Flow-Through Class A Common Shares at an issue price of $0.35 per Flow-Through Share for aggregate gross proceeds of up to $2,000,000. A finders fee of 8% will be paid to certain arm's length parties in connection with the private placement.

Proceeds from the Common Share offering will be used to fund the Cobalt's ongoing drilling and well recompletion operations in its core focus areas and for general corporate purposes. Proceeds from the Flow-Through offering will be used to incur qualifying expenditures.

Closing of the Offering is expected to occur on or about October 9, 2008. The Common Shares and the Flow-Through Shares will be subject to a four month hold period from the date of closing the Offering. The transaction is subject to receipt of all necessary regulatory and stock exchange approvals.

Cobalt participates in the exploration, development and production of conventional crude oil and natural gas reserves in western Canada. The Company's strategy is to build shareholder value through internally generated exploration and development drilling and through selective acquisitions.