WEST ENERGY LTD. announces it has concluded its strategic review


    CALGARY, July 8 /CNW/ - West Energy Ltd. ("West" or the "Company") (TSX:
"WTL") advises that after careful analysis of offers, deal structures and
advice by financial advisors, the Board of Directors concluded that the most
beneficial outcome for all shareholders is for the Company to continue to
operate as an entity able to conduct high-impact exploration. With recent
monthly cashflows exceeding $10 million, $30 million of surplus cash and no
debt, West is well positioned to conduct these programs.
    On March 12, 2008, West announced that it had engaged CIBC World Markets
Inc. and GMP Securities L.P. as financial advisors to consider strategic
alternatives. The Board of Directors of West believed that such a process was
appropriate to identify the most efficient method of maximizing the corporate
value inherent in West's current and future production and cash flow, together
with West's balance sheet strength and current existing inventory of drilling
prospects. Over the past three months, West solicited proposals for the
disposition of some or all of its assets, or for the sale or merger of the
entire entity. The proposals received did not allow West's shareholders to
access the potential value of current commodity prices on West's production,
the new Crossfire Nisku discovery or share in the upside of its prospect
inventory and associated capital programs.
    More specifically, the reasons for the decision of the Board of Directors
include the following:

    -   Improved commodity prices: Commodity prices have significantly
        increased in the period since the March 12 press release indicating
        the intention to undertake strategic initiative. Oil has increased by
        over 28 percent while natural gas has increased by over 25 percent
        with futures pricing for both commodities remaining strong. These
        current increases, and longer term commodity price implications,
        should provide our shareholders enhanced value for production,
        reserves and prospective land inventory.

    -   Operational developments: In the period subsequent to March 12, West
        has received key drilling licenses to develop both its Nisku and
        Montney plays. The Company drilled a significant Nisku discovery
        located at Crossfire 9-1-50-6W5 which has the potential to increase
        the Company's reserve base by 50% and confirms a number of subsequent
        Nisku development and exploration drilling opportunities on Company
        owned lands. In addition the company is drilling three Montney wells
        at Economy Creek and Monias. Both the Nisku and Montney drilling
        programs have the potential to add significant shareholder value.

    -   Montney natural gas play valuation: Over the past 18 months, West has
        established a significant presence in the Montney natural gas play
        with three separate programs totaling over 23,000 net acres.
        Approximately half of West's Montney lands lie close to lands in the
        Montney fairway that recently sold at auction for over $10,000 per

    During the strategic initiative, West has continued to focus on its
operations and the development of its capital programs for the Nisku and
Montney plays. Current daily production levels are approximately 5500 BOEPD.
The new 9-1 well at Crossfire is expected to be on stream prior to the end of
the third quarter. In addition to the drilling program initiated in the second
quarter, West has evaluated potential acquisitions to enhance and broaden the
Company's exploration programs.
    Having determined that maintaining existing operations and taking
advantage of the opportunities available to the Company is the option most
likely to maximize shareholder value, the Company will undertake the following
course of action:

    -   Obtain additional drilling licenses to further develop the Crossfire
        area in the Pembina Nisku play and to prove the potential of the
        Montney lands. Recognizing the long lead times inherent in securing
        regulatory approvals for wells and associated facilities with
        associated sour gas in the Pembina area, West will focus a greater
        and expanding proportion of its exploration expenditures in the
        Montney lands with the intention of developing a larger resource play
        and having a more balanced production portfolio.

    -   Actively seek acquisitions where the acquired assets will enhance
        value and expand the Company's drilling inventory.

    -   Utilize the strength of the Company's balance sheet including
        $30 million of cash on deposit, $30 million face value of Asset
        Backed Commercial Paper and strong borrowing capacity to take
        advantage of opportunities that may arise.

    With current oil prices and production rates at near record highs, a
strong balance sheet and a large high impact exploration prospect inventory,
West is unique amongst its peer group. The process has identified a number of
enhancements and opportunities for the Company and management is excited by
our upcoming prospects and our potential to add value for our shareholders.

    Reader's Advisory:
    Certain information regarding West Energy Ltd. in this news release
including management's assessment of the future plans and operations and their
timing, the effect on West and its cash flow from 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, changes to the proposed royalty regime prior to implementation
and thereafter, 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, incorrect assessment of the value of acquisitions, failure to
realize the anticipated benefits of acquisitions, 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 were applied in drawing a conclusion or making a forecast or projection
as reflected in the forward-looking information and that could cause actual
results to differ materially from those anticipated in the forward-looking
statements are included in reports on file with Canadian securities regulatory
authorities and may be accessed through the SEDAR website (www.sedar.com) or
at the Corporation's website (www.westenergy.ca). Furthermore, the
forward-looking statements contained in this news release are made as of the
date of this news release and the Corporation 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.

    The news release contains the term cash flow which is commonly used in
the oil and gas industry. This term is not defined by GAAP and should not be
considered an alternative to, or more meaningful than, cash provided by
operating activities as determined in accordance with Canadian GAAP as an
indicator of West's performance. Management believes that cash flow is a
useful financial measurement which assists in demonstrating the Corporation's
ability to fund capital expenditures necessary for future growth or to repay
debt. West's determination of cash flow may not be comparable to that reported
by other companies. All references to cash flow throughout this news release
are based on cash flow from operating activities before changes in non-cash
working capital and abandonment expenditures.

    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: West Energy Ltd., 600, 333 5th Avenue S.W.,
Calgary, Alberta, T2P 3B6, Main Phone: (403) 265-5202, Facsimile: (403)
263-7007; Attention: Ken McCagherty, President and Chief Executive Officer,
Email: mccagherty@westenergy.ca, Direct Phone: (403) 716-3458; Attention:
Scott Bridge, Vice President Finance and Chief Financial Officer, Email:
sbridge@westenergy.ca, Direct Phone: (403) 716-3457

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