Calvalley Petroleum Inc. Provides Operational Update for June



    CALGARY, June 19 /CNW Telbec/ - Calvalley Petroleum Inc., (TSX: CVI.A) -
Calvalley Petroleum Inc. (the "Company" or "Calvalley"), an international oil
and gas exploration and production company based in Calgary, Alberta, is
pleased to provide the following update regarding its operations on Block 9 in
the Republic of Yemen. Calvalley owns a 50% gross working interest and is the
operator of Block 9 under a production sharing agreement with the Government
of Yemen. Calvalley holds 2,234 sq km of land area in the prolific
Sayun-Masila basin, of which only a relatively small area has been explored to
date.
    Crude oil production from Block 9 is exported under a long term sales
agreement at prices comparable to Brent crude oil reference prices. Since
starting commercial production from Block 9 in late 2005, Calvalley has been
actively engaged in major facility and pipeline construction projects that
will increase Calvalley's production capacity. Calvalley expects to
significantly increase its current crude oil production volumes as completion
of the infrastructure projects removes existing production constraints. In
anticipation of the additional processing and pipeline capacity, Calvalley
plans to continue increasing its exploration and development program.

    Production Volumes

    
    - Gross daily production from Block 9 averaged 5,271 bopd during April
      and 4,984 bopd during May. During the quarter, production volumes were
      limited by the capacity of the early production facility. In addtition,
      several wells were temporarily shut-in to accommodate (i) the ongoing
      testing and completion program, (ii) construction activity at the
      central production facility, and (iii) drilling of multilateral legs on
      three of the Hiswah wells.

    - Production is currently being taken from six to eight wells in the
      Hiswah field and does not include nine shut-in wells in the Hiswah
      field and eight shut-in wells in the Al Roidhat field. In total,
      Calvalley has twenty horizontal wells in the Hiswah field and eight
      vertical wells in the Al Roidhat field. All of the Hiswah wells are
      tied into the central production facility at Hiswah, which Calvalley
      expects to commission during the third quarter of 2007.

    - Calvalley plans to begin production from Al Roidhat during the fourth
      quarter of 2007, after relocating components of the early production
      facility from Hiswah. Heavier oil from Al Roidhat will be processed at
      Hiswah and blended with lighter crude oil production within the
      specifications for Marib Light crude oil.

    Drilling Operations

    - Currently, Calvalley has two drilling rigs and two service rigs
      operating on the Block 9. Since April 1, Rig No.1 has successfully
      drilled two additional vertical development wells in the Al Roidhat
      field and drilled an appraisal well at Al Hedba, the results of which
      are currently being evaluated. Calvalley now has eight wells completed
      and equipped in the Al Roidhat field.

    - Based on the ongoing interpretation of seismic data acquired during
      late 2006, Calvalley intends to dedicate Rig No.2 for exploration
      drilling during the remainder of 2007. Rig No.1 will continue to focus
      on development and appraisal drilling on existing fields.

    - Calvalley intends to seek approval from Yemeni authorities to mobilize
      a third drilling rig to provide capacity for an expanded exploration
      and development drilling program in 2008. By increasing the number of
      producing wells in existing and new fields, Calvalley intends to
      significantly increase production volumes once its central production
      facility and sales pipeline are fully operational in 2008.

    Reservoir Simulation and Testing

    - During the first half of 2007, Calvalley has undertaken a comprehensive
      program for testing existing wells in the Hiswah field to identify
      opportunities to enhance the productivity of these wells. Test results
      for most of these wells were in line with the Company's expectations.
      On the lower-producing wells, Calvalley has taken measures to increase
      production rates through (i) remedial workovers, (ii) acid stimulation,
      and (iii) drilling of multilateral legs.

    - Calvalley has successfully improved the productivity of several wells
      by drilling multilateral legs. The productivity of Hiswah 9 has more
      than doubled since two multilateral legs were drilled while Hiswah 13
      test results show a marked increase in productivity after one
      multilateral leg was drilled. Drilling at Hiswah 17 was recently
      completed and test results are not available at this time.

    - With two service rigs under contract, Calvalley has carried out seven
      well completions and workovers during 2007 on existing wells in the
      Hiswah, Al Roidhat and Auqban fields. In particular, the productivity
      improvement resulting from acid stimulation of the Hiswah 14 and
      Hiswah 18 wells exceeded the Company's expectations. Based on those
      results, Calvalley plans to acidize all of the Hiswah wells once the
      reservoir simulation and testing program has been completed.

    - An independent third party engineering firm has been engaged to develop
      reservoir simulation models to gain a better understanding of best
      practices for long term production within the Hiswah field and to
      evaluate the potential for secondary recovery techniques such as water
      injection and gas injection in order to optimize the ultimate oil
      recovery factor over the life of the field.

    Infrastructure Projects

    - Calvalley continues to make progress toward commissioning of its
      central production facility at Hiswah in July 2007. The scheduled
      completion date has been deferred several weeks, primarily due to
      logistical delays for construction materials and a shortage of
      manpower.

    - The initial capacity of the central production facility will be
      30,000 bopd, allowing Calvalley to increase gross oil production to
      10,000 bopd from the current capacity of the early production facility.
      Calvalley intends to seek regulatory approval to increase its trucking
      capacity beyond 10,000 bopd until the sales pipeline is operational.
      When completed, the second phase of the central production facility and
      the sales pipeline will further increase Calvalley's crude oil
      processing and shipping capacity.

    - During May, Calvalley completed several milestones toward gaining
      government approvals for tendering of major contracts for the sales
      pipeline project. Tenders have now been received for the engineering
      and material supply contracts, which will be awarded as soon as
      regulatory approvals are received.

    - Since the overall pipeline tendering process has taken longer than
      previously expected, Calvalley now anticipates that the sales pipeline
      will be operational during the first quarter of 2008. Once all
      government approvals are in place and contracts have been awarded,
      construction activity is expected to proceed in a timely manner in
      accordance with schedules prescribed in the contracts.

    Exploration Programs

    - Processing of seismic data acquired during late 2006, together with
      reprocessing of older seismic data, is now substantially completed and
      the geological interpretation of this data is well underway. The 2006
      seismic program targeted significant high impact exploration leads and
      prospects in the central region within Block 9. The objective of this
      program is to better define the geological structures within the leads
      and prospects and to identify high priority exploration targets to be
      drilled during 2007 and 2008.

    - With a second drilling rig now under contract, Calvalley plans to drill
      as many as five exploration targets during the remainder of 2007.

    - In early June, Calvalley started the acquisition of more than 300 km of
      seismic data in the northern plateau region of Block 9. Calvalley
      expects that the acquisition and processing of this data will be
      completed by the end of 2007.
    

    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:
Neil Murray-Lyon: murraylyon@renmarkfinancial.com; Tina Cameron:
tcameron@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717;
www.renmarkfinancial.com

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Calvalley Petroleum Inc.

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