Bow Valley Continues Negotiations with Bank Lenders

Bow Valley is continuing negotiations with its bank lending group to, among other things, extend the expiry date of its current debt facilities (all due December 31, 2008), including extending a (pnds stlg)17.5 term facility, deferral of a scheduled US $10 million amortization payment on its senior credit facility and extending a scheduled redetermination of its senior credit facility.

Because the negotiations involve several interested parties and because of the difficulty in finalizing the negotiations during the holiday season, the final details of any waiver extension won't be available until later next week at which time Bow Valley will make a further announcement. Recognizing that discussions are ongoing, the Company's lenders have undertaken not to issue any formal default notice until the current discussions have concluded.

R.G. Moffat, President and CEO of Bow Valley stated, "The process to secure waiver extensions to our current debt facilities include negotiations amongst several parties. These negotiations have been protracted and have
continued over the holiday season and have extended beyond the expiry date of December 31, 2008. While there can be no assurance as to the outcome of these negotiations, it is reassuring that the parties involved are working together toward a common goal of finding an acceptable solution to Bow Valley's current debt maturities."

As previously announced, as a consequence of the Company's bank indebtedness maturities on December 31, 2008 and the current global economic environment, Bow Valley's Board of Directors appointed a Special Committee composed of independent directors, and has engaged Scotia Waterous Inc. to examine and consider a range of strategic alternatives available to the Company. These alternatives will include, among other things, potential asset divestments, equity alternatives, strategic alliances, joint venture opportunities, mergers or a corporate sale transaction.

No decision on any particular alternative has been reached at this time and there can be no assurance that the strategic review process will result in any change in the Company's current operations or that the Company will pursue any particular transaction. Bow Valley does not intend to make any further announcement regarding the strategic review process or the asset disposition process unless and until its Board of Directors has approved a specific transaction or other course of action or otherwise deems disclosure of developments is appropriate.

R.G. Moffat further stated, "The requested bank waiver extensions to the maturing debt are intended to provide adequate time to close the previously announced sale of the Company's Peik asset and pursue the strategic review process to its conclusion."