North Peace Receives ERCB Approval for CSS Pilot and Announces Private Placement Financing



    /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE
    UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE
    A VIOLATION OF U.S. SECURITIES LAW/

    TSX-V: NPE

    CALGARY, June 5 /CNW/ - North Peace Energy Corp. ("North Peace" or the
"Company") today received approval for a thermal bitumen recovery scheme under
the Oil Sands Conservation Act from the Energy Resources Conservation Board
("ERCB") for its two well, Cyclic Steam Stimulation ("CSS") pilot on Block B
South of its Red Earth property.
    The principal objective of the CSS pilot is to demonstrate the
feasibility of producing economic quantities of bitumen from the Company's
resource and to validate economic and technical parameters for the design of
the commercial project. Detailed engineering for the pilot is nearing
completion and procurement of major equipment is underway. Drilling of the two
horizontal wells and construction of pilot facilities will commence within the
next two months, with first steam injection expected to occur in November
2008. Initial production response should occur approximately two months
following steam injection and is expected either late in 2008 or in early
2009.
    North Peace has entered into an agreement to sell, on a private placement
basis, up to approximately $25 million of common shares at a price to be
determined in the context of the market. The commercially reasonable "best
efforts" private placement, which is subject to regulatory approval, will be
sold through a syndicate of agents led by GMP Securities L.P.
    The majority of the proceeds from the offering will be used by the
Company to fully fund all costs associated with the CSS pilot project
including the acquisition of capital equipment, construction costs and the
drilling of two horizontal CSS wells. The remaining funds will be used to: (i)
complete the 2008/2009 eight well winter delineation drilling program, (ii) to
advance environment and engineering baseline work for the commercial project
and (iii) for general corporate purposes.

    Forward-Looking Statements: Certain statements contained in this news
release constitute forward-looking statements that involve known and unknown
risks, uncertainties and other factors that may cause actual results or events
to differ materially from those anticipated in such forward-looking
statements. No assurance can be given that these expectations will prove to be
correct and such forward-looking statements included in this release should
not be unduly relied upon. Actual results could differ materially as a result
of changes in North Peace's plans, changes in commodity prices, regulatory
changes, general economic, market and business conditions as well as
production, development and operating performance and other risks associated
with oil and gas operations including anticipated success of resource
prospects and the expected characteristics of resource prospects; anticipated
capital requirements, project rates of return and estimated project life;
estimates of original discovered resource; estimates of recovery factors; lack
of diversification; and overall technical and economic feasibility of the
Company's project. These statements speak only as of the date of this release
or as of the date specified in the documents accompanying this release, as the
case may be. The Company undertakes no obligation to publicly update or revise
any forward-looking statements except as expressly required by applicable
securities laws.

    About North Peace

    North Peace Energy has an in situ oil sands project in northern Alberta
with 86,400 acres of nearly contiguous leases bridging the Peace River and
Athabasca oil sands areas.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this news release.

    This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the securities in any jurisdiction. The
securities offered have not 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 in the United States except in
certain transactions exempt from the registration requirements of the U.S.
Securities Act and applicable states securities laws.

    %SEDAR: 00019211E




For further information:

For further information: Louis Dufresne, President and CEO, James
Glessing, Vice President, Finance & CFO, North Peace Energy Corp., 470, 505 -
3rd Street SW, Calgary, Alberta, T2P 3E6, Telephone (403) 262-6024, Facsimile:
(403) 262-6072, E-mail: info@northpec.com, www.northpec.com

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NORTH PEACE ENERGY CORP.

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