Rally Energy Acquisition Closes

    "RAL" - TSX Exchange
    "RLE" - Frankfurt Stock Exchange

    CALGARY, Sept. 27 /CNW/ - Rally Energy Corp. ("Rally") is pleased to
announce that it has completed its transaction with Citadel Capital Company
and National Petroleum Company S.A.E. and their affiliates. Pursuant to the
terms of the agreement, an affiliate of Citadel Capital Company and National
Petroleum Company S.A.E. has purchased all of the outstanding common shares of
Rally for CDN$7.30 per share and all of the "in-the-money" options to purchase
Rally common shares for the difference between CDN $7.30 and the exercise
price of the options.
    "I would like to take this opportunity to thank you, our shareholders,
for your support, our directors for their guidance and our staff and advisors
for their dedication and commitment that helped us achieve this significant
outcome," said Abby Badwi, President and CEO of Rally.

    Based in Calgary, Alberta, Canada, Rally Energy is an oil and gas
exploration, development and production company. The Corporation's primary
area of operations is in Egypt, where it has a 100% operating interest in the
Issaran Oilfield, a significant heavy oil development opportunity. In
Pakistan, the Corporation holds a 30% interest in the Safed Koh Block, where
it is participating in the development of a natural gas/condensate discovery.



    Except for statements of historical fact, all statements in this news
release - including, without limitation, statements regarding the Transaction
and future plans and objectives of Rally - are forward-looking statements that
involve various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate; actual results and future events could
differ materially from those anticipated in such statements. Important factors
that could cause actual results to differ materially from anticipated results
include risks and uncertainties most of which are beyond Rally's control such
as: risks relating to the arrangement; estimates of reserves and recoveries;
production rates and operating cost assumptions; development risks and costs;
the risk of commodity price and currency fluctuations; general economic and
industry conditions; political and regulatory risks; environmental risks;
stock market volatility; access to sufficient capital from internal and
external sources; and other risks and uncertainties as disclosed under the
heading "Risk Factors" and elsewhere in Rally's documents filed from
time-to-time with the Toronto Stock Exchange and other regulatory authorities.
The reader is cautioned that assumptions used in the preparation of such
information, while considered reasonable by Rally at the time, may prove to be
incorrect. Rally disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

         The TSX has neither approved nor disapproved of the contents
                            of this news release.


For further information:

For further information: Abby Badwi, President & CEO, Tel: (403)
538-0000; Douglas Urch, Vice President, Finance & CFO, Fax: (403) 538-3705

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