Calvalley Petroleum Inc. - Yemen Operations Update



    CALGARY, Jan. 14 /CNW Telbec/ - Calvalley Petroleum Inc. (TSX: CVI.A)

    Calvalley Petroleum Inc. ("Calvalley" or the "Company"), an international
junior oil and gas company based in Calgary, Alberta, is pleased to announce
the following:

    Pipeline Project - Calvalley receives approval to award EPCM contract

    Calvalley solicited tenders from qualified Engineering firms to carry out
the Engineering, Procurement and Construction Management ("EPCM") of the
pipeline project from Block 9 to connect to a third party pipeline system for
the export of the crude oil production. Tenders were received and a
comprehensive evaluation was carried out by Calvalley's technical team based
on the technical and commercial terms of the tenders. Based on this
evaluation, Calvalley selected the preferred candidate and prepared a
recommendation to the Ministry of Oil and Mineral Resources of the Republic of
Yemen ("Ministry") for approval to award the contract.
    The Ministry's technical team, together with the Operating Committee
appointed by the Minister to oversee the project, reviewed Calvalley's
recommendation and granted an approval to proceed with the contract award to
the company selected by Calvalley's technical team.
    Calvalley and the members of the Operating Committee will meet shortly
with the successful bidder to execute the necessary contract documents.

    Malik 1 Exploration Well - Up dip appraisal well to be drilled

    The Malik 1 well encountered the Qishn sandstone at a depth of
1,233 metres and the sand demonstrated excellent reservoir characteristics.
Oil shows were present over a forty-two meter gross interval (thirty meter net
interval) from 1,238 metres to 1,280 metres. The sands showed a light brown
oil stain with yellow to light brown fluorescence. Oil staining and a yellow
fluorescence were also present from the underlying Saar sands over a
seventeen meter interval.
    A petrophysical analysis of the Qishn and Saar intervals indicated the
presence of four metres of net hydrocarbon potential in the upper Qishn
clastics and two metres of net hydrocarbon potential in the underlying Saar
formation. Swab tests recovered oil from the Saar and Qishn intervals
demonstrate the presence of movable hydrocarbons in both formations. Calvalley
is encouraged by the results, and intends to drill an appraisal well up dip
from this location on a seismically defined structural closure. A
recommendation has been made to our JV partners as well as regulatory
authorities to drill Malik 2 appraisal well approximately 6.5 kilometres
directly west of Malik 1 to evaluate the extent and commerciality of the
discoveries in both formations.

    Hiswah 22 Vertical Well - Service rig on site to commence well test

    The Hiswah 22 vertical well was spudded on November 17, 2007 in the
north-western portion of the Hiswah pool, primarily to gather information
critical to reservoir studies. The well was drilled to a total depth of
1,310 metres with cores cut approximately 143 metres through the Saar oil
reservoir and into the water leg of the reservoir. The well encountered a
strong oil show in the Qishn sandstone at 853 metres and oil shows continued
throughout the sand to 974 metres. These sands displayed good porosity, fair
dark brown oil staining and orange fluorescence with good gas shows. Oil was
observed in the mud tanks from 884 metres to 906 metres. A petrophysical
analysis of the electric logs indicates 7.5 metres of gross oil column in the
Qishn. Specialized tools were then run which successfully recovered multiple
reservoir fluid samples and pressure information from both the Saar and Qishn
formations. The rig was released on December 27, 2007. A service rig has been
moved to the well, perforated the top of the Qishin sandstone and commenced a
swab test.

    Hiswah 23 Vertical Well

    The Hiswah 23 vertical well, located approximately 3 kilometres south
East of Hiswah 22 was spudded on December 31, 2007 in the south-eastern
portion of the Hiswah pool. The objectives of this well are similar to the
objectives of the Hiswah 22 vertical well. Information gathered from the cores
along with the other reservoir information gathered will be utilized to
significantly improve the accuracy of the reservoir simulation studies
currently underway.

    Qarn Qaymah 2 - Oil & gas shows encountered in the Saar & Naifa
    formations

    Qarn Qaymah 2, an exploration well located in the northern part of
Wadi Hadramut, was spudded on December 6, 2007. The well is 2.1 km east of the
Qarn Qaymah 1, which was successfully tested as a gas-condensate discovery in
the basal Kohlan sand. The primary objective of Qarn Qaymah 2 is the Kohlan
sandstone, however, oil and gas shows were encountered in the lower portion of
the Saar and Naifa formations which will represent secondary zones of interest
during testing and future wells in Qarn Qaymah area. Intermediate casing has
been set at 2,400 metres and drilling will recommence from that point to the
projected total depth of 3,700 metres.

    Calvalley is listed on the Toronto Stock Exchange, trading under the
symbol "CVI.A".

    THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
    RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

    This press release may contain forward-looking statements including,
without limitation, financial and business prospects and financial outlooks,
and such statements may be forward-looking statements which reflect
management's expectations regarding future plans and intentions, growth,
results of operations, performance and business prospects and opportunities.
Words such as "may", "will", "should", "could", "anticipate", "believe",
"expect", "intend", "plan", "potential", "continue", and similar expressions
have been used to identify these forward-looking statements. These statements
reflect management's current beliefs and are based on information currently
available to management. Forward-looking statements involve significant risk
and uncertainties. A number of factors could cause actual results to differ
materially from the results discussed in the forward-looking statements
including, but not limited to, changes in general economic and market
conditions and other risk factors. Although the forward-looking statements
contained herein are based upon what management believes to be reasonable
assumptions, management cannot assure that actual results will be consistent
with these forward-looking statements. Investors should not place undue
reliance on forward-looking statements. These forward-looking statements are
made as of the date hereof.
    Forward-looking statements and other information contained herein
concerning the oil and gas industry and Calvalley's general expectations
concerning this industry are based on estimates prepared by management using
data from publicly available industry sources as well as from reserve reports,
market research and industry analysis and on assumptions based on data and
knowledge of this industry which Calvalley believes to be reasonable. However,
this data is inherently imprecise, although generally indicative of relative
market positions, market shares and performance characteristics. While
Calvalley is not aware of any misstatements regarding any industry data
presented herein, the industry involves risks and uncertainties and is subject
to change based on various factors.
    %SEDAR: 00001745E




For further information:

For further information: Edmund M. Shimoon, CEO, Calvalley Petroleum
Inc., (403) 297-0491, Fax: (403) 297-0499; Renmark Financial Communications
Inc.: Neil Murray-Lyon, nmurraylyon@renmarkfinancial.com; Tina Cameron,
tcameron@renmarkfinancial.com; (514) 939-3989, Fax: (514) 939-3717,
www.renmarkfinancial.com

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