EXALL ANNOUNCES NEW WELL TESTING 384 BARRELS PER DAY ON THREE DAY TEST

CALGARY, AB, Dec. 13 /CNW Telbec/ - Exall Energy Corporation (TSX: EE) ("Exall" or the "Company") is pleased to announce the results of the wells drilled during the 2010 fall drilling season.

Highlights:

  • Two of the four planned wells offsetting the previously announced discoveries on the Marten Mountain Gilwood "A" Sand and the Marten Mountain Gilwood "B" Sand trends have been drilled during the fall drilling season,
  • One well has been completed and swab tested at an average of 384 barrels of oil per day of 39° API sweet oil over a three day test period (276 BOEPD net to Exall),
  • The final 24 hour swab rate averaged 420 barrels of oil per day (302 BOEPD net),
  • The completed well is tied in and on production through the Exall facility,
  • Corporate production capability is now approximately 2,000 BOEPD, current production remains in the order of 1,500 BOEPD to 1,600 BOEPD, and
  • Completion operations are continuing on the second well.

Marten Mountain Project

The 12-25 Gilwood "B" Sand discovery well previously announced by Exall has been offset with an additional horizontal well (07-25) resulting in another oil well. This 07-25 Gilwood "B" Sand well has been completed and swab tested an average of 384 barrels of 39° API sweet oil (384 BOEPD, 276 BOEPD net) over a three day test period. The final 24 hour swab test rate averaged 420 barrels of oil (302 BOEPD net).

The 07-25 Gilwood "B" Sand well was drilled from the same surface location as the 12-25 Gilwood "B" Sand discovery well and was immediately tied into the Exall pipeline completed in Q4 of 2009. The Company had previously constructed a tie-in point for additional wells on the pipeline to expedite tie-in operations. The 07-25 "B" Sand well will be produced using a submersible pump to maintain optimum production rates, during the New Oil Well Production period, of approximately 629 BOEPD (452 BOEPD net).

Exall has shut in the 02-36 Gilwood "B" Sand well because the well has over produced its allowable during the New Oil Well Production Period. The 02-36 "B" Sand well will be placed back on production in 2011, once the over production has been retired according to the Alberta Energy Resources Conservation Board ("ERCB") regulations. The 02-36 "B" Sand well was producing approximately 503 BOEPD (362 BOEPD net) prior to being shut in.

With the 02-36 "B" Sand well shut in and the tie in of the newly completed 07-25 "B" Sand well, Exall's net corporate production remains in the order of 1,500 to 1,600 BOEPD.

Completion activities are currently underway on the second of the fall wells drilled, along with completion activities on two additional wells drilled earlier in 2010. As well, an additional waterflood and Good Production Practices application is currently being filed with the ERCB, with approvals expected in the New Year.

Exall expects to spud the third (06-36 Gilwood "B" Sand) of the four fall 2010 wells December 15 with the fourth well spudding immediately following the completion of drilling operations on the 06-36 "B" Sand well.

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 Energy is currently developing a new oil discovery in north-central Alberta.

Exall Energy has 53,210,245 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 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.

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: 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.
Henri Perron: hperron@renmarkfinancial.com
Maurice Dagenais: mdagenais@renmarkfinancial.com
Tel.: (514) 939-3989 or (416) 644-2020
www.renmarkfinancial.com

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Exall Energy Corporation

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