Ms. Louisa DeCarlo reports

CANADIAN SPIRIT RESOURCES INC. ANNOUNCES OPERATIONAL UPDATE

As a result of the continued deterioration of the North American natural gas prices accompanied by the further discounted price experienced by producers in northeastern British Columbia producing into the Spectra main pipeline, Canadian Spirit Resources Inc. has shut in natural gas production at Farrell Creek/South Altares due to a negative netback on joint venture natural gas production.

CSRI's net production over the past 60 days at Farrell Creek/South Altares prior to the shut-in averaged 629 Mcf (thousand cubic feet) per day (net to the corporation).

The natural gas processing facility and associated wells will be reactivated once natural gas prices return to price where there is not a negative netback on the joint venture natural gas production. At this time, it is unknown when this will occur. The corporation will provide another update to this evolving situation when appropriate.

Review of strategic alternatives

The corporation continues to work with Sayer Energy Advisors to review strategic alternatives and maximize the value of the corporation's Montney resource base at Farrell Creek and Altares.

We seek Safe Harbor.