Eagle Rock Exploration Provides Operational Update



    TSXV: ERX

    CALGARY, July 23 /CNW/ - Eagle Rock Exploration Ltd. ("Eagle Rock" or the
"Company") (TSX-V: ERX) is pleased to provide an operational update.
    Eagle Rock has drilled five successful wells year to date, three of them
in July, 2008. Significant activity is planned for the balance of 2008.
    Current production is approximately 500 boe/d, a 25 percent increase
since April 1, 2008 following the sale of producing assets at Antelope Lake,
Saskatchewan. Eagle Rock remains heavily leveraged to oil production at
95 percent oil. As previously announced Eagle Rock anticipates exiting 2008
with production of approximately 700 boe/d and will remain highly leveraged to
oil. Eagle Rock's recent and planned activities for each major property are
outlined as follows:

    
    Beverley/Antelope Lake, SK (100% WI, Operated)

    -   Two wells have been drilled in July 2008 and a third will be drilled
        before month end.
    -   The first well, a horizontal, was drilled in early July 2008 and
        encountered 650 meters of oil pay in the Cantaur zone and will be on
        production by early August.
    -   The second well, a vertical was successful in delineating the Cantaur
        oil pool.
    -   These are the first steps in a plan to follow-up on a well drilled in
        December 2007 which encountered 17 meters of net oil pay in the
        Cantaur zone.

    Red Coulee, AB (100% WI, Operated)

    -   A successful Cutbank horizontal well was drilled in Q2 08. Oil
        production commenced in late June and continues at steady rates of
        approximately 50 bbls/d.
    -   The success of this well and knowledge from prior exploration and
        development activity in the area sets up at least eight additional
        horizontal well locations targeting the Cutbank formation.
    -   A Rundle vertical well drilled this month will be on production by
        the end of Q3 08 as Eagle Rock awaits regulatory approval for a
        pipeline. This success sets up a number of additional drilling
        locations.

    Coutts, AB (89% WI, Operated,)

    -   A property acquisition in April 2008 for $595,000 added to
        Eagle Rock's land and production base.
    -   Production from the acquired wells of 25 boe/d was subsequently
        increased through well reactivations and stimulations.
    -   Optimization activities on other wells have also increased production
        from the area.
    -   All oil production from this area is light (41API).

    Jensen, AB (100% WI, Operated)

    -   Three existing well bores have been re-entered in Q2 08.
    -   One well tested 500 mcf/d (80 boe/d) of sour natural gas in the
        Rundle formation.
    -   A second well tested positively for natural gas in a shallower zone.
    -   Future development of this property is waiting on evaluation of these
        two wells.

    Warner, AB (100% WI, Operated)

    -   2D seismic was shot in Q2 08 and Eagle Rock has identified two
        prospects.
    -   One exploratory well will be drilled in Q3 2008.

    Enchant, AB (37.5-100% WI, majority operated)

    -   One well was successfully recompleted in Q2 08, with approximately
        40 bbls/d of Livingston oil awaiting pipeline tie in.
    -   Eagle Rock plans to drill one well in Q3 08.

    Antelope Lake, SK (33.6% WI, Non -Operated)

    -   Eagle Rock sold the non-operated portion of this property in early
        April 2008 for proceeds of $6.9 million.
    

    Capital budget

    The capital budget for the balance of 2008 is in the process of being
revised upwards in light of the recent successes. Eagle Rock's cash flows for
2008 are benefiting from high benchmark oil prices, low differentials on
medium gravity oil and declining operating costs per barrel as production
increases. Bank lines of credit are in the process of being increased in light
of higher production and increasing cash flows. Eagle Rock recently contracted
a collar for 100 bbls/d for calendar 2009 with a floor of US$ 100 and a
ceiling of US$ 200 which also supports higher credit limits.

    About Eagle Rock

    Eagle Rock is a publicly traded energy company involved in the
exploration and development of low to medium risk oil and gas properties in
Western Canada. Eagle Rock's common shares trade on the TSX Venture Exchange
under the symbol "ERX". The TSX Venture Exchange has not reviewed and does not
accept responsibility for the adequacy or accuracy of this release.

    Forward-looking Information

    This press release includes forward-looking statements and assumptions
respecting Eagle Rock's strategies, future operations, expected financial
results, financial sources, commodity prices, costs of production and quantum
of oil and natural gas reserves and discusses certain issues, risks and
uncertainties that can be expected to impact on any of such matters. By their
nature, forward-looking statements are subject to numerous risks and
uncertainties that can significantly affect future results. Actual future
results may differ materially from those assumed or described in such
forward-looking statements as a result of the impact of issues, risks and
uncertainties whether described herein or not, which Eagle Rock may not be
able to control. The reader is therefore cautioned not to place undue reliance
on such forward-looking statements. The forward-looking statements contained
in this news release are made as of the date hereof and Eagle Rock undertakes
no obligation to update publicly or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by applicable securities laws. The forward-looking statements
contained in this news release are expressly qualified by this cautionary
statement.
    In addition, the term BOE or BOE's may be misleading, particularly if
used in isolation. A BOE (barrel of oil equivalent) conversion ratio of 6 Mcf
per one (1) BOE is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
wellhead.

    %SEDAR: 00019108E




For further information:

For further information: please visit the Company's website at
www.eaglerockexploration.com or contact: Jim Silye, President and Chief
Executive Officer, Tel: (403) 269-4040, Fax: (403) 261-1978, E-mail:
jimsilye@eagler.ca

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EAGLE ROCK EXPLORATION LTD.

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