Mr. R. Murray reports

SHOAL POINT 3K-39 WELL UPDATE WESTERN NEWFOUNDLAND

Shoal Point Energy Ltd. is presenting the following information on the Green Point oil-in-shale project in the Port au Port Bay area in western Newfoundland.

Drilling

The DLMC et al. Shoal Point 3K-39 well is currently at the surface casing point. The surface hole is on target and the next operation will be to run and cement 244.5-millimetre casing to surface. Since the current well is twinning the earlier 2K-39 well, the geology in the two wells correlates very closely, as expected.

Project research

In order to maximize the company's understanding of the Green Point shale play, and to plan the current well, the project group has conducted or commissioned a number of investigations. These include outcrop sampling, petro-physical reinterpretation of well logs, geophysical remapping, resource estimating and a re-evaluation of the K-39 drill stem test.

As part of this program, the company has examined closely the information provided by the 2K-39 well. In the course of so doing, it has been noted that certain statements to the effect that 2K-39 flowed about 54 barrels of oil into the wellbore are not substantiated by the well records. In fact no oil flowed from the formation into the wellbore and the well was at all times under control. The source of the oil which was observed in the mud was from oil liberated by cuttings from the thick oil-bearing shale being penetrated by the drill.

"We are pleased that the drilling of 3K-39 is progressing well and confirming the results of the earlier 2K-39 borehole and look forward to our complete evaluation of the Green Point target over the next days and weeks. Our geological team in Calgary has recently completed a comprehensive review of data from wells and outcrop in the area of Port au Port Bay and we are very pleased with the results. 3K-39 is designed to greatly enhance that database and provide us with key information on the amount of oil that may be recovered from the unconventional Green Point reservoir," said George Langdon, chief executive officer of Shoal Point Energy.

We seek Safe Harbor.