Galleon achieves 97% drilling success in third quarter 2007

    CALGARY, Oct. 3 /CNW/ - Galleon Energy Inc. ("Galleon") is pleased to
announce a 97% success rate from the third quarter 2007 drilling program.
33 wells were drilled of which 32 (27.4 net) were cased for production
including 11 light oil wells (9.4 net), 3 heavy oil wells (2.1 net) and 18
natural gas wells (15.9 net). Currently, Galleon has 4 rigs drilling. This
success was realized in Galleon's focus areas as well as in new exploration
growth areas.
    The Q3 2007 drilling program resulted in significant discoveries in
3 major growth areas in the Peace River arch with two wells being drilled in
each of these areas. In the first area, at Eaglesham, one well tested in
excess of 800 boepd gross of natural gas and condensate (65% interest). The
second well tested 425 boepd gross of light oil (100% interest). In the second
area, at McLeans Creek, two wells each tested in excess of 500 boepd gross of
light sweet oil (average 75% interest). In the third area, at Kimiwan, two
wells each tested in excess of 200 boepd gross (average 80% interest). These
wells are expected to be tied-in prior to year end with production rates to be
determined. Galleon has a significant land position in these areas with a
large number of follow up drilling locations identified by 3D seismic
    In addition during the third quarter of 2007, a high impact well tested
in excess of 8 Mmcf/d of natural gas (15% drawdown) with 200 Bbl/d of natural
gas liquids (1,533 boepd gross) (71.2% interest). The well is planned to be
tied-in during Q4 2007 at an initial production rate of approximately
4.5 Mmcf/d. This is a restricted rate due to temporary facility constraints.
    With this drilling success Galleon expects to reach a 2007 exit
production level of at least 17,000 boepd. Of this production level, Dawson
Montney, Eaglesham and Puskwa are expected to contribute approximately 26%,
12% and 18% respectively.

    Puskwa Beaverhill Lake light sweet oil pool
    The Puskwa project has entered the development phase consisting of
development drilling and implementation of enhanced oil recovery
scheme/waterflood. The enhanced oil recovery is expected to increase oil
recovery from 25% to 45% of oil in place. The project will be developed over
the next 5 years.

    Waterflood/GPP phase one update:
    -   A pilot waterflood was successfully implemented in June 2007 on
        section 32-71-26W5M and section 5-72-26W5M.
    Waterflood/GPP phase two update:
    -   As previously announced, on September 12, 2007, Galleon received
        approval for the waterflood expansion and GPP status on portions of
        two additional developed sections at 11 and 13-72-26W5M.
    Waterflood/GPP phase three update:
    -   Galleon is currently in the process of applying for approval on
        remaining portions of developed locations within the Puskwa oil pool.
    Drilling update:
    -   Five wells targeting the Beaverhill Lake sand at Puskwa were drilled
        and cased (100% interest) in third quarter 2007.
    -   Four to five light oil locations are scheduled to be drilled in Q4
        2007 in the main Puskwa pool.

    Eaglesham project
    -   Four natural gas wells and one light oil well were drilled and cased
        (79.2% interest) in third quarter 2007.
    -   Up to 6 wells are scheduled in the next three months including
        4 Wabamun light oil locations.

    Dawson Montney natural gas pools
    This project has expanded to an area extending 12 miles wide and 35 miles
long which has been proven through drilling in excess of 70 wells.

    -   Drilled 15 and cased 14 (92.6% interest) natural gas wells in Q3
    -   11 wells are planned in Q4 2007.
    -   Galleon has identified over 350 locations in the Dawson area.

    In Q4 2007, Galleon plans to drill up to 28 wells including 21 low and
medium risk development and 7 high impact exploration wells (6 targeting light
sweet oil). If successful, these high impact wells will be catalysts to
significant growth on new plays.
    Galleon has access to approximately 1 million gross acres of land. Within
this land base, over 550 locations have been identified with varying risk
profiles. Today, this inventory gives Galleon significant potential for future
growth through a 4-5 year drilling program.

    Prospect Inventory Update
    Prospect           Number of locations        %
    Dawson Montney                     350        64
    Eaglesham                           30         5
    Kakut                               20         4
    Puskwa                              30         5
    McLeans Creek                       10         2
    Culp                                10         2
    New exploration                    100        18
    Total                              550       100

    During Q3 2007, production averaged approximately 13,700 to 13,900 boepd
(42% oil and 58% gas) based on actual sales and field estimates. This
represents an increase of 3-4% over Q2 2007 average daily production. One of
four compressors located at the Dawson Montney gas plant failed midway during
the third quarter of 2007. Average production was affected by approximately
400 boepd due to this mechanical issue. A new compressor has been ordered and
is expected to be operational during October.
    Galleon has approximately 63.1 million Class A shares and 922,500 Class B
shares issued and outstanding which trade on the TSX under the symbols "GO.A"
and "GO.B".

    ADVISORY: Certain information regarding Galleon Energy Inc. in this news
release including management's assessment of future plans and operations,
number, type and timing of wells to be drilled, tested and completed, timing
of tie in of wells and commencement of production from new wells and
production therefrom, the plan and development of certain prospects, and
production estimates may constitute forward-looking statements under
applicable securities laws and necessarily involve risks including, without
limitation, 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 from other producers, inability to
retain drilling rigs and other services, capital expenditure costs, including
drilling, completion and facilities costs, unexpected decline rates in wells,
surface conditions may delay projects and/or operations, wells not performing
as expected, delays resulting from or inability to obtain required regulatory
approvals and ability to access sufficient capital from internal and external
sources. As a consequence, actual results may differ materially from those
anticipated in the forward-looking statements. Readers are cautioned that the
foregoing list of factors is not exhaustive. Additional information on these
and other factors that could effect Galleon's operations and financial results
are included in reports on file with Canadian securities regulatory
authorities and may be accessed through the SEDAR website (, at
Galleon's website ( Furthermore, the forward-looking
statements contained in this news release are made as at the date of this news
release and Galleon 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 may be required by
applicable securities laws.

    Disclosure provided herein in respect of barrels of oil equivalent (boe)
may be misleading, particularly if used in isolation. A boe conversion ratio
of 6 Mcf: 1 Bbl is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the

For further information:

For further information: see or contact: Steve
Sugianto, President and Chief Executive Officer, (403) 261-9287,; Glenn R. Carley, Executive Chairman, (403) 261-9277,; Shivon Crabtree, Vice President and Chief Financial
Officer, (403) 261-9276

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