Grey Wolf's '08 Exit Production Tops over 2,300 BOE/D

Grey Wolf's average production volume for the last week of December 2008 was over 2,300 barrels of oil equivalent per day ("boe/d"). Current average production is over 2,450 boe/d, reflecting the impact of two additional 50 percent working interest ("WI") wells placed on production in late December.

Grey Wolf has also announced that its 2009 capital expenditure program has been approved at $15 million. "During this time of falling commodity prices and uncertain global economic stability, we believe that our best strategy for 2009 is to limit capital spending to key, high-impact projects that will add to reserves and production, and to focus on reducing corporate debt" stated Mr. Bob Watson, Chairman and Chief Executive Officer of the Company.

The capital program includes the tie-in of our 2008 100% WI Slave Point natural gas discovery at 2-17-121-11 W6M which tested at 9 million cubic feet per day ("MMcf/d"). This indicated an absolute open flow ("AOF") of 75 MMcf/d and we expect this well will initially produce at rates between 3 to 6 MMcf/d (500 to 1,000 boe/d). Production is anticipated to commence by late first quarter 2009.

In addition, drilling of a 100 percent WI horizontal well is scheduled to commence during the third quarter of 2009, to follow up on Grey Wolf's successful horizontal wells on its Pouce Coupe Montney/Doig resource play.