COSTA Energy Inc. and Artek Exploration Ltd. Announce Letter of Intent for
the Reverse Takeover of COSTA Energy Inc.

    
    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/
    

CALGARY , Oct. 29 /CNW/ - COSTA Energy Inc. (TSXV: CEQ.H) ("COSTA") and Artek Exploration Ltd. ("Artek") are pleased to announce that they have entered into a non-binding letter of intent dated October 28, 2009 (the "Letter Agreement"), pursuant to which, subject to the entering into of a definitive agreement ("Definitive Agreement") and certain other conditions, the parties propose to complete a reverse takeover by Artek of COSTA through the acquisition by COSTA of all of the outstanding shares of Artek (the "Proposed Transaction").

The Proposed Transaction

The Proposed Transaction is an arm's length transaction pursuant to which shareholders of Artek would be entitled to receive common shares of COSTA ("COSTA Shares") based upon an exchange ratio, calculated on the basis of a deemed price per COSTA Share of $0.11 and a deemed price per Artek Share of $20 . The Proposed Transaction will constitute a reverse takeover and change of control of COSTA within the meaning of Policy 5.2 of the TSX Venture Exchange.

Under the terms of the Proposed Transaction, the directors and management of COSTA would be reconstituted with the members of the board of directors and management of Artek and the name of COSTA would be changed to Artek Exploration Ltd.

The Letter Agreement is non-binding except for obligations relating to a period of exclusive dealing, confidentiality and other non-material matters. If a Definitive Agreement is entered into, the parties will cooperate to complete the Proposed Transaction as soon as practicable and by no later than the end of January 2010 , subject to the receipt of all necessary regulatory and other approvals and satisfaction of all other customary closing conditions. The Proposed Transaction will be effected by way of a plan of arrangement, amalgamation, share exchange or other similar form of transaction. It will be a condition to completion of the Proposed Transaction that the combined entity be approved for graduation from the NEX Board to the TSX Venture Exchange. The Proposed Transaction would also be subject to the respective approvals of the shareholders of each of COSTA and Artek at special meetings of such shareholders.

The parties have agreed to a period of exclusive dealing ending November 18, 2009 during which time they will continue their due diligence on one another and proceed with negotiations to determine if a Definitive Agreement can be reached.

Further details concerning the Proposed Transaction and the operations of Artek will be announced if and when a Definitive Agreement is entered into.

About Artek Exploration Ltd.

Artek, a privately held corporation based in Calgary , Alberta, has been engaged in the business of acquiring crude oil and natural gas properties and exploring for, developing and producing oil and natural gas in western Canada since it commenced operations in February 2005 . Since commencing operations, Artek has concentrated on exploration and development drilling of prospects in its core areas in the Province of Alberta and British Columbia, including the areas of Farmington, Dunvegan, Valhalla, Clayhurst, Sinclair, Alberta and Noel, British Columbia. Artek's operations are currently directed predominately towards natural gas and light oil prospects.

Artek is led by an experienced board of directors and management team which include the following members:

    
    Management Team                           Position
    ---------------    ------------------------------------------------------

    Darryl Metcalfe    President and Chief Executive Officer of Artek since
                       March 2005. Prior thereto, Vice-President, Exploration
                       & Development of Ketch Resources Ltd. from October
                       2002 to January 2005. Prior thereto, Mr. Metcalfe was
                       Director Northern Business Unit of Ketch Energy Ltd.
                       from May 2000 to September 2002.

    Darcy Anderson     Vice President Finance and Chief Financial Officer of
                       Artek since September 2009. Prior thereto, Vice-
                       President Finance and Chief Financial Officer of
                       Pegasus Oil & Gas Inc. from January 2006 to August
                       2009. Prior thereto, Vice-President Finance and Chief
                       Financial Officer of Mustang Resources Ltd. from July
                       2002 to June 2005.

    Greg Frolek        Principal of Artek Exploration Ltd. Currently VP of
                       Business Development. Prior thereto, Senior Engineer
                       with Ketch Resources from October 2002 to January 2005
                       and Ketch Energy from September 2001 to October 2002.

    Peter Andrews      Professional Engineer; Vice President Drilling and
                       Operations at Artek since October 2005. Prior thereto,
                       Manager Drilling and Operations at Ketch Resources
                       Ltd. from 2002 to 2005. Prior thereto, Mr. Andrews was
                       Sr. Production / Completions Engineer at Ketch Energy
                       Ltd. from 2001 to 2002.

    Bruce Nociar       Vice President Production of Artek since February
                       2009. Prior thereto, Manager Production of Artek from
                       February 2008 to February 2009. Prior thereto, Manager
                       Engineering of Kereco Energy Ltd. from January 2005 to
                       January 2008. Prior thereto, Sr. Exploitation Engineer
                       of Ketch Resources Ltd. from September 2003 to January
                       2005.

    Jennifer Swertz    Vice President Land of Artek since July 2005. Prior
                       thereto, Vice-President Land and Manager of Galleon
                       Energy Inc. from May 2003 to May 2005.

    Marc Houle         Vice President of Artek Exploration since September
                       2008. Prior thereto, Vice President Exploration West
                       and Chief Geophysicist of Galleon Energy Inc. from
                       October 2003 to July 2008.


    Board of Directors                       Occupation
    ------------------ ------------------------------------------------------

    M. Bruce Chernoff  Professional Engineer; Co-founder and Chairman of
                       Harvest Energy Trust; President and Director of
                       Caribou Capital Corp.; Director of several other
                       public companies.

    Rafi G. Tahmazian  Managing Director of Canoe Financial LP, an energy
                       investment partnership; Advisory board to EnergyX, a
                       private equity investment fund.

    Gary F. Aitken     President of Whitemountain Resource Properties Ltd., a
                       private investment and resource company. Prior
                       thereto, a Financial and Land Consultant to Sentry
                       Select Capital Corp. since 2002. Executive Vice-
                       President and Director of Precept Resource Management
                       Corp., a limited partnership manager, since 2005.

    David J. Wilson    President and Chief Executive Officer of Celtic
                       Exploration Ltd. since September 30, 2002. Prior
                       thereto, President of Genesis Exploration Ltd. from
                       March 1993 to May 2001.

    Darryl Metcalfe    President and Chief Executive Officer of Artek since
                       March 2005. Prior thereto, Vice-President, Exploration
                       & Development of Ketch Resources Ltd. from October
                       2002 to January 2005. Prior thereto, Mr. Metcalfe was
                       Director Northern Business Unit of Ketch Energy Ltd.
                       from May 2000 to September 2002.
    

About COSTA Energy Inc.

Until October 2008 , COSTA was engaged in acquisition, exploration, development and production of petroleum and natural gas reserves in western Canada . COSTA currently has no operating assets and has been inactive since late 2008, other than considering alternatives for the future positioning of COSTA for a reverse takeover and/or change of business transaction. The COSTA Shares are currently listed and posted for trading on the NEX Board of the TSX Venture Exchange (the "TSXV").

Subject to all necessary regulatory approvals in connection therewith, upon completion of the Proposed Transaction, the common shares of the combined entity would be listed and posted for trading on the TSXV. The parties expect to apply for an exemption from the sponsorship requirements of the TSXV in connection with the Proposed Transaction. There can be no assurances that such approval of the TSXV or such exemption will be granted or be granted on terms satisfactory to the parties.

In accordance with the policies of the TSXV, trading in COSTA Shares is currently halted and will remain halted until further notice.

Significant Conditions to Completion of the Proposed Transaction

COSTA and Artek caution that a Definitive Agreement has yet to be entered into among the parties and, accordingly, no assurances can be given that the process contemplated by the Letter Agreement will lead to a Definitive Agreement relating to the Proposed Transaction on the terms contemplated by the Letter Agreement or at all. Neither COSTA nor Artek intend to make any further announcements or communications regarding the Proposed Transaction until either a Definitive Agreement has been entered into or discussions are terminated prior to such event.

Completion of the Proposed Transaction is subject to a number of conditions, including TSXV acceptance and shareholder approvals (including on a disinterested basis to the extent required). The Proposed Transaction cannot close until the required shareholder approvals are obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of either COSTA Energy Inc. or Artek Exploration Ltd. should be considered highly speculative.

If and when a Definitive Agreement between COSTA and Artek is entered into, in accordance with the policies of the TSXV, COSTA and Artek will issue a subsequent press release containing further details in respect of the Proposed Transaction, including information relating to sponsorship, if applicable, financial information in respect of Artek, along with information in respect of the operations of Artek.

Forward-looking statements

This news release contains forward-looking statements relating to the Proposed Transaction, including statements regarding the exchange ratio for the Proposed Transaction, the anticipated reverse takeover of COSTA, the anticipated closing date of the Proposed Transaction, the anticipated timeline for holding the meetings of COSTA and Artek shareholders to approve the Proposed Transaction and other related matters, issuing further announcements concerning the Proposed Transaction and other matters, the receipt of all necessary regulatory approvals and satisfaction of all other customary closing conditions in connection with the Proposed Transaction and other statements that are not historical facts. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These assumptions, risks and uncertainties include, among other things: the risk that the Proposed Transaction will not be completed if a Definitive Agreement is not reached or that the necessary approvals and/or exemptions are not obtained or some other condition to the closing of the Proposed Transaction is not satisfied; the risk that closing of the Proposed Transaction could be delayed if COSTA and Artek are not able to obtain the necessary approvals on the timelines planned; the assumptions relating to the parties entering into the Definitive Agreement in respect of the Proposed Transaction and the timing thereof, the timing of obtaining required approvals and satisfying closing conditions for the Proposed Transaction, state of the economy in general and capital markets in particular, investor interest in the business and future prospects of COSTA and Artek.

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, COSTA and Artek disclaim any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, COSTA and Artek undertake no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

    
    Neither the TSX Venture Exchange nor its Regulation Services Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release.

    Not for distribution to U.S. Newswire Services or for dissemination in
    the United States of America. Any failure to comply with this restriction
    may constitute a violation of U.S. Securities laws.
    

For further information: David Campbell, President and Chief Executive Officer, COSTA Energy Inc., [phone]; Darryl Metcalfe, President and Chief Executive Officer, Artek Exploration Ltd., [phone]; Darcy Anderson, Vice President Finance and Chief Financial Officer, Artek Exploration Ltd., [phone]