EXALL ENERGY ANNOUNCES CLOSING OF $11.5 MILLION PRIVATE PLACEMENT OF SPECIAL WARRANTS AND FILING OF FINAL SHORT FORM PROSPECTUS

/NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION TO THE UNITED STATES/

CALGARY, Feb. 1 /CNW Telbec/ - Exall Energy Corporation (TSX:EE) ("Exall" or the "Company") is pleased to report that it has closed the previously announced bought deal special warrant private placement (the "Offering"). Exall issued an aggregate of 5,750,000 special warrants (the "Special Warrants") at a price of CDN$2.00 per Special Warrant for aggregate gross proceeds of $11,500,000. The aggregate number of Special Warrants included 750,000 Special Warrants issued pursuant to the exercise in full of the option granted to the Underwriters' (as defined below) under the Offering. Each Special Warrant entitles the holder thereof to receive one common share of the Company (each, a "Common Share") on the exercise or deemed exercise of the Special Warrants. 

Dundee Securities Corporation acted as lead underwriter for the Offering, together with, Clarus Securities Inc., Stonecap Securities Inc. and D&D Securities Inc. (collectively, the "Underwriters").  The Underwriters received a cash commission of 6% of the gross proceeds raised in the Offering.

Exall also announces that subsequent to the closing of the Offering it filed its final short form prospectus (the "Prospectus") in order to qualify for distribution in all Provinces of Canada (except Quebec) the Common Shares issuable upon the exercise or deemed exercise of the Special Warrants.  A receipt for the Prospectus (the "Receipt") was also issued today by the securities regulatory authorities in each of the provinces of Canada, except Quebec.  As a result, effective February 2, 2011, the Special Warrants will be deemed to have been exercised and the Company will issue an aggregate of 5,750,000 Common Shares to the Special Warrant holders on such deemed exercise.

The net proceeds from the Offering will be used to expand and accelerate Exall's capital program for the development of the Company's Gilwood light oil exploration and development program in Mitsue, Alberta, and for additional working capital purposes.

About Exall
Exall is a junior oil and gas company active in its business of oil and gas exploration, development and production from its properties in Alberta, British Columbia and Texas. Exall is currently developing a new oil discovery in north-central Alberta.

Exall has 59,050,169 common shares outstanding. The Company's common shares are listed on the Toronto Stock Exchange under the trading symbol EE.

Reader Advisory
This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including the forward-looking statements relating to the closing of the offering, the use of proceeds from the Offering, along with those relating to results of operations and financial condition, capital spending, financing sources, commodity prices and costs of production. By their nature, forward-looking statements are subject to numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, actual results may differ materially from those predicted. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such factors include fluctuating commodity prices, capital spending and costs of production, and other factors described in the Company's most recent Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. Such forward-looking statements are made as at the date of this news release, and the Company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

For the purposes of calculating unit costs, natural gas has been converted to a barrel of oil equivalent (boe) using 6,000 cubic feet equal to one barrel (6:1), unless otherwise stated. The boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore boe may be misleading if used in isolation. This conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

SOURCE Exall Energy Corporation

For further information:

Exall Energy Corporation  
Frank S. Rebeyka   
Vice Chairman & CEO  
Tel: (403) 815-6637   
Roger N. Dueck
President & COO
Tel: (403) 237-7820
info@exall.com

Please visit Exall Energy's website at: www.exall.com.

Renmark Financial Communications Inc.
Maurice Dagenais: mdagenais@renmarkfinancial.com
Florence Liberski : fliberski@renmarkfinancial.com
Tel.: (514) 939-3989 or (416) 644-2020
www.renmarkfinancial.com

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Exall Energy Corporation

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