ProspEx Resources Announces Closing of Previously Announced Acquisition of Ricinus Area Assets



    CALGARY, Jan. 22 /CNW/ - ProspEx Resources Ltd. ("ProspEx" or the
"Company") is advising that it has closed its previously announced acquisition
of certain assets in the Ricinus area of Alberta. These assets consist of
16 (11.9 net) wells with current production of approximately 360 barrels of
oil equivalent ("boe") per day, along with associated gas gathering and field
compression facilities. The consideration paid by ProspEx was $11.6 million
after closing adjustments.

    
    The key attributes of this asset acquisition are as follows:

    -   This acquisition will consolidate ProspEx's interests in the Ricinus
        area, where the Company has enjoyed drilling success over the past
        two years. ProspEx has interests in 11 of the 16 wells included in
        the acquisition, and will assume operatorship of gathering and
        compression facilities in the area upon closing. ProspEx has
        identified 4 (2.6 net) potential additional drilling locations on the
        acquired lands;
    -   Current production is estimated at approximately 360 boe per day,
        comprised of 76% natural gas and 24% oil and natural gas liquids
        (resulting in an acquisition price of $32,600 per boe of daily
        production);
    -   The reserves associated with the assets to be acquired were evaluated
        on behalf of the vendor by McDaniel & Associates Consultants Ltd.
        effective December 31, 2006 and mechanically updated to
        June 30, 2007. Proved plus Probable reserves as of June 30, 2007 for
        these assets were estimated to be 940 thousand boe. ProspEx estimates
        that production from June 30, 2007 to the December 1, 2007 effective
        date of the acquisition was approximately 60 thousand boe, leaving
        approximately 880 thousand boe of Proved plus Probable reserves;
    -   The purchase of these assets was financed from the Company's credit
        facility. ProspEx anticipates that the acquired assets will support
        an expansion of the Company's existing credit facility from
        $60 million to $65 million.
    

    ProspEx Resources Ltd. is a Calgary-based junior oil and gas company
focused on exploration for natural gas in the Western Canadian Sedimentary
Basin.

    Reader's Advisory

    Certain information regarding ProspEx Resources Ltd. including
management's assessment of future plans and operations, constitutes
forward-looking information or statements under applicable securities law and
necessarily involve assumptions regarding factors and risks that could cause
actual results to vary materially, including, without limitation, assumptions
and risks associated with oil and gas exploration, development, exploitation,
production, marketing and transportation, loss of markets, volatility of
commodity prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, competition, incorrect assessment of the value of
acquisitions, failure to realize the anticipated benefits of acquisitions and
ability to access sufficient capital from internal and external sources.
    The reader is cautioned that these factors and risks are difficult to
predict and that the assumptions used in the preparation of such information,
although considered reasonably accurate by ProspEx at the time of preparation,
may prove to be incorrect. Accordingly, readers are cautioned that the actual
results achieved will vary from the information provided herein and the
variations may be material. Readers are also cautioned that the foregoing list
of factors is not exhaustive. Additional information on these and other
factors that could affect ProspEx's operations or financial results are
included in ProspEx's reports on file with Canadian securities regulatory
authorities. In particular see ProspEx's MD&A and the Risk Factors and
Industry Conditions sections of ProspEx's Annual Information Form. ProspEx's
reports may be accessed through the SEDAR website (www.sedar.com), at
ProspEx's website (www.psx.ca) or by contacting the Company directly.
Consequently, there is no representation by ProspEx that actual results
achieved will be the same in whole or in part as those set out in the forward
looking information.
    Furthermore, the forward-looking statements contained in this news
release are made as of the date of this news release, and ProspEx does not
undertake any obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by law. The forward-looking statements
contained herein are expressly qualified by this cautionary statement.

    Boe's may be misleading, particularly if used in isolation. A boe
conversion ratio of six thousand cubic feet to one barrel 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: 00021285E




For further information:

For further information: John Rossall, President & Chief Executive
Officer, jrossall@psx.ca, (403) 268-3941; or George Yee, Vice President
Finance and Chief Financial Officer, gyee@psx.ca, (403) 268-3942

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PROSPEX RESOURCES LTD.

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