Upper Lake Oil and Gas Ltd. provides operational update

    CALGARY, Dec. 7 /CNW/ - Upper Lake Oil and Gas Ltd. (TSX:UP) ("Upper
Lake" or the "Company") is pleased to provide an update on its current
operations. Since inception on October 15, 2007, Upper Lake has participated
in the drilling of three wells, all of which are in various stages of
completion, testing or being tied-in. Depending on weather and surface access,
Upper Lake expects to participate in the drilling of up to three additional
wells prior to year end, including one well currently being drilled in the
Tupper region of British Columbia.
    Certain information included in this News Release constitutes
forward-looking information, including information concerning the number of
wells in which the Company expects to participate prior to the end of 2007 and
the anticipated timing for tie-in of, and first production from, the
15-04-43-28w4 well recently drilled by the Company at Ferrybank. Readers
should review the cautionary statement that appears at the end of this News
    Upper Lake is also pleased to announce that it has discovered a new gas
pool in its Ferrybank, Alberta core area. The 12-01-43-28 w4 well (48.15%
working interest), which was drilled as an extension to the Company's
Glauconite gas pool, encountered an additional zone. The well has been
completed as a dual zone gas well and both zones are now on production. Also
at Ferrybank, Upper Lake has drilled and completed a pool extension oil well.
The 15-04-43-28 w4 well (100% working interest) initially tested light gravity
crude oil and associated solution gas at substantial rates. An extended test
is underway and Upper Lake plans to have this well tied in and on production
in mid January 2008. Upper Lake expects to provide 2008 guidance, including
rates for these recently drilled Ferrybank wells, in late January 2008.
    Upper Lake remains debt free, has a revolving credit line of $8 million
and a preliminary 2008 capital program of between $9 and $12 million.

    Upper Lake Oil and Gas is a Calgary-based company active in the
exploration, development and production of oil and gas in Western Canada. The
Company was formed on October 12, 2007 when shareholders, optionholders and
warrantholders of Diamond Tree Energy Ltd. ("Diamond Tree") approved an
arrangement involving Upper Lake, Diamond Tree and Crocotta Energy Inc.
("Crocotta") at a special meeting. In connection with the arrangement, certain
oil and gas properties of Diamond Tree in central and eastern Alberta,
consisting of exploration assets, producing properties, related tangibles and
undeveloped lands, were transferred to Upper Lake. Additional information
concerning Upper Lake is available on SEDAR at www.sedar.com.

    Certain information set out in this News Release constitutes
forward-looking information. Forward-looking statements are often, but not
always, identified by the use of words such as "seek", "anticipate", "plan",
"continue", "estimate", "expect", "may", "will", "intend", "could", "might",
"should", "believe" and similar expressions. Forward-looking statements are
based upon the opinions and expectations of management of the Company as at
the effective date of such statements. Although the Company believes that the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that those expectations will
prove to have been correct. Forward-looking statements are subject to certain
risks and uncertainties that could cause actual events or outcomes to differ
materially from those anticipated or implied by such forward-looking
statements. These factors include, but are not limited to, such things as the
volatility of prices for oil and gas and other commodities, commodity supply
and demand, fluctuations in currency and interest rates, inherent risks
associated with the exploration and development of oil and gas properties,
ultimate recoverability of reserves, unexpected declines in production from
established reserves, timing, results and costs of exploration and development
activities, timing and costs of facilities and pipeline construction,
availability of financial resources or third-party financing, availability of
drilling and related equipment and new laws and regulations (domestic and
foreign). Accordingly, readers should not place undue reliance upon the
forward-looking statements contained in this News Release and such
forward-looking statements should not be interpreted or regarded as guarantees
of future outcomes. Forward-looking information respecting anticipated
drilling activities for the balance of 2007 is based upon the current capital
budget developed for the Company (which is subject to change), prior
exploration and development drilling activities conducted by Diamond Tree
Energy Ltd., the results of prior exploration and development drilling
activities in the Ferrybank area, the receipt of all necessary regulatory
approvals in a timely manner and industry conditions including proposed
royalty changes. Forward-looking information respecting the anticipated timing
for tie-in of, and first production from, the 15-04-43-28 w4 well recently
drilled by the Company at Ferrybank is based upon management's prior
experiences with the tie-in of successful wells in the Ferrybank area, the
availability of transportation and processing infrastructure. The
forward-looking statements of Upper Lake contained in this News Release are
expressly qualified, in their entirety, by this cautionary statement.
Additional information concerning the various risk factors to which Upper Lake
is exposed in the conduct of its business (and which may affect the
expectations or outcomes reflected in the forward-looking statements contained
in this News Release) are described in publicly available documents filed by
or on behalf of Upper Lake with certain securities regulatory authorities in
Canada, which are available through SEDAR at www.sedar.com, including the
September 12, 2007 Management Information Circular and Proxy Statement
prepared by Diamond Tree Energy Ltd. in connection with the special meeting of
the securityholders of Diamond Tree Energy Ltd. held on October 12, 2007.

For further information:

For further information: Kelly J. Ogle, President and Chief Executive
Officer, kogle@upperlake.ca; Upper Lake Oil and Gas Ltd., 1200, 111 - 5th
Avenue SW, Calgary, AB, T2P 3Y6, Phone: (403) 237-9141, Fax: (403) 237-9140,

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