Calvalley Petroleum Inc. Provides Operational Update and Status of the Central Processing Facility



    CALGARY, Aug. 29 /CNW Telbec/ - Calvalley Petroleum Inc., (TSX: CVI.A)

    Calvalley Petroleum Inc. (the "Company" or "Calvalley"), an international
oil and gas exploration and production company based in Calgary, Alberta, is
pleased to provide the following update regarding its operations on Block 9 in
the Republic of Yemen. Calvalley owns a 50% gross working interest and is the
operator of Block 9 under a production sharing agreement with the Government
of Yemen. Calvalley holds 2,234 km(2) of land area in the prolific
Sayun-Masila basin, of which only a relatively small area has been explored to
date.

    Central Processing Facility ("CPF")

    Calvalley is pleased to announce that the Central Processing Facility
(the "CPF") has been commissioned and crude oil production is currently
flowing through the facility into a storage tank farm consisting of six
10,000 bbl tanks.  It is anticipated that upon diverting all production from
the temporary production facility to the CPF, the storage tanks from the
temporary facility will be relocated to the Al Roidhat field. Following the
relocation, it is anticipated that the Al Roidhat field will be put on to
production and oil originating there from will be trucked to the CPF for
processing.

    Additional Wells on Production

    In testing and completing the CPF, the Company has concurrently put three
new wells onto production. Hiswah 5, 19 and Hiswah NE have come on-stream as
the crude oil currently flowing through the CPF represents production that had
not previously been included in the Company's overall production volumes.

    Pipeline Project

    The Company continues in its negotiations with the Ministry of Oil and
Minerals, third party operators and other related governmental regulatory
bodies in an effort to finalize all outstanding matters closely linked to
project economics, including issues relating to tariffs, crude quality
adjustments, and other commercial factors. The Company believes that these
outstanding issues could be of a critical nature in the future and must be
addressed and agreed upon to secure Calvalley's long term interests in the
Republic of Yemen. The pipeline is of importance to both Calvalley and Yemen,
and as such the Company intends to meet with Ministry and Government officials
in the upcoming days and weeks with the aim of addressing all of the Company's
concerns. The Company is dedicated to forging a prosperous and successful
partnership with the Yemeni Government both in this endeavour and in all
future operations and projects in Yemen.

    Calvalley is listed on the Toronto Stock Exchange, trading under the
symbol "CVI.A".

    THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
    RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

    This press release may contain forward-looking statements including,
without limitation, financial and business prospects and financial outlooks,
and such statements may be forward-looking statements which reflect
management's expectations regarding future plans and intentions, growth,
results of operations, performance and business prospects and opportunities.
Words such as "may", "will", "should", "could", "anticipate", "believe",
"expect", "intend", "plan", "potential", "continue", and similar expressions
have been used to identify these forward-looking statements. These statements
reflect management's current beliefs and are based on information currently
available to management. Forward-looking statements involve significant risk
and uncertainties. A number of factors could cause actual results to differ
materially from the results discussed in the forward-looking statements
including, but not limited to, changes in general economic and market
conditions and other risk factors. Although the forward-looking statements
contained herein are based upon what management believes to be reasonable
assumptions, management cannot assure that actual results will be consistent
with these forward-looking statements. Investors should not place undue
reliance on forward-looking statements. These forward-looking statements are
made as of the date hereof.

    Forward-looking statements and other information contained herein
concerning the oil and gas industry and Calvalley's general expectations
concerning this industry are based on estimates prepared by management using
data from publicly available industry sources as well as from reserve reports,
market research and industry analysis and on assumptions based on data and
knowledge of this industry which Calvalley believes to be reasonable. However,
this data is inherently imprecise, although generally indicative of relative
market positions, market shares and performance characteristics. While
Calvalley is not aware of any misstatements regarding any industry data
presented herein, the industry involves risks and uncertainties and is subject
to change based on various factors.
    %SEDAR: 00001745E




For further information:

For further information: Renmark Financial Communications: Neil
Murray-Lyon, nmurraylyon@renmarkfinancial.com; Tina Cameron,
tcameron@renmarkfinancial.com; (514) 939-3989, (514) 939-3717,
www.renmarkfinancial.com; Source: Edmund M. Shimoon, CEO, Calvalley Petroleum
Inc., (403) 297-0491, Fax: (403) 297-0499

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Calvalley Petroleum Inc.

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