Velo Energy Provides Corporate Update



    /NOT FOR DISTRIBUTION IN THE UNITED STATES OF AMERICA/

    CALGARY, June 11 /CNW/ - Velo Energy Inc. ("Velo" or the "Company") (TSX
VENTURE EXCHANGE: VLO) provides the following update on its activities.

    Private Placement

    Subject to regulatory approvals, Velo will issue a maximum of 30,000,000
common shares at $0.05 per share in a non-brokered private placement to raise
$1,500,000. It is not anticipated that the completion of the proposed private
placement will result in the creation of a new control person (as such term is
defined in the TSX Venture Exchange Policy 1.1). Nova Bancorp Investments Ltd.
("Nova Bancorp") intends to subscribe for 7,000,000 common shares of this
issue. Nova Bancorp and its affiliates currently own 23.1% of the common
shares of the Company and its directors are officers and directors of Velo.
The Company will pay a finders fee of 5% of the amount raised, except for the
amount subscribed for by Nova Bancorp. Management expects to close the private
placement before the end of June 2008. The proceeds of the private placement
will be used to pursue new exploration and development opportunities and
working capital.

    Settlement of December 2006 Flow-Through Obligation

    Velo's final plan to settle its obligations to subscribers of the
December 2006 flow-through issue was described in an April 1, 2008 press
release. The proposal described at that time was accepted by flow-through
share subscribers representing $440,835 (97.5%) of the $452,133 owed to
subscribers. Velo will issue 5,877,800 shares at $0.075 per share to those
subscribers who accepted the proposal. This share issuance is subject to the
approval of the TSX Venture Exchange ("TSX-V"). As requested by the TSX-V,
Velo obtained the consent of a majority of Velo shareholders who didn't
subscribe for shares in the flow-through issue. 51.2% of "disinterested
shareholders" consented to the proposal. Management expects to close the share
issuance before the end of June 2008.

    Other

    The financial restructuring of the Company's wholly owned subsidiary,
Velo Energy Ltd. ("Velo Ltd.") was described in a press release dated
February 8, 2008. In December 2007, Velo Ltd. successfully negotiated a
repayment plan with almost all of its unsecured creditors. In addition to an
initial payment made at that time, Velo Ltd. was required to make a final
payment by the end of April. While this payment has not yet been made,
management expects the necessary payments will soon be made and the
restructuring of Velo Ltd. completed.

    About Velo Energy Inc.

    Velo is an emerging oil and gas company engaged in the exploration for,
development and production of natural gas and oil in the western sedimentary
basin.

    Reader Advisory

    Certain information set forth in this media release contains
forward-looking statements, including statements regarding the private
placement and the issuance of shares to settle the indemnity to subscribers of
the flow-through financing. By their nature, forward-looking statements are
subject to numerous risks and uncertainties, some of which are beyond Velo's
control, including the private placement and the share issuance.

    The TSX-V has not reviewed and does not accept responsibility for the
    adequacy or accuracy of this press release.

    %SEDAR: 00021327E




For further information:

For further information: Jack Muir, Director, Tel: (604) 891-8782

Organization Profile

VELO ENERGY INC.

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