Culane Energy Releases 2008 First Quarter Results

CALGARY, ALBERTA--(Marketwire - May 26, 2008) - Culane Energy Corp. ("Culane") (TSX VENTURE: CLN.V) announces its financial and operating results for the three months ended March 31, 2008. The unaudited Financial Statements and related Management's Discussion and Analysis have been filed with Canadian securities regulatory authorities on SEDAR at www.sedar.com and posted on the Company's website at www.culaneenergycorp.com.

Q1 2008 Highlights

- Gross revenues were $15.8 million in Q1/08 compared to $3.9 million for Q1/07, a 305% increase.

- Production averaged 2,477 BOE/d in Q1/08 compared to 869 for Q1/07, a 185% increase with 66% oil and 34% natural gas.

- Funds from operations were $8.9 million or $0.43 per share for Q1/08 compared to $1.7 million or $0.08 per share for Q1/07, a 419% increase in cash flow and 438% increase in cash flow per share.

- Earnings of $2.9 million or $0.14 per share for Q1/08 compared to a loss of $176,000 for Q1/07.

- A total of 18 wells (net 16.5) were drilled in Q1/08 (12 in Q1/07) resulting in 7 producing multi-leg horizontal oil wells, 3 producing gas well, 1 suspended gas well, 3 standing cased wells, 2 water injection wells, and 2 abandoned wells.

- Capital expenditures of $12.7 million were invested in Q1/08 ($16.9 in Q1/07) all at Killam for the drilling and equipping of 18 wells.

- Subsequently, on April 3, 2008 the Company issued 2,860,000 class A common shares at $7.00 per share for gross proceeds of $20,020,000.

During the first quarter of 2008, Culane focused its efforts on its ongoing drilling program at Killam. In this quarter Culane drilled and equipped 9 multi-leg horizontal wells, drilled, tested and equipped 2 vertical water injector wells and drilled 7 vertical test wells. Under existing regulations the natural gas produced with oil from these wells is required to be conserved. In order to produce these wells, pipelines were designed, approved and constructed. Culane completed this work late in the first quarter and is now producing oil and gas from 10 of these wells, 4 more vertical wells are awaiting testing and tie-in. A 30 square mile seismic interpretation over the new Killam lands was completed in the first quarter and 7 stratigraphic vertical test wells were drilled as mentioned above. By the end of March 2008 the Company had 36 (34.5 net) multi-leg horizontal oil wells and 13 (11 net) gas wells on production at Killam. Due to spring break-up and lease preparations, Culane will continue with its horizontal well development drilling program in June 2008. A drilling rig is currently racked at our Killam properties awaiting the end of break-up.

On April 3rd, 2008 the Company issued 2,860,000 class "A" common shares at $7.00 per share for gross proceeds of $20,020,000, bringing the Company's outstanding number of shares to approximately 23.9 million. The April financing has allowed the Company to eliminate almost all its debt and move forward with a clean balance sheet. The reduction of its debt combined with record incoming revenues (a direct result from an aggressive drilling program and increasing oil & gas prices) allows Culane the ability to expand its core business. During the first quarter of 2008, Culane's gross revenues were $15.8 million compared to $3.9 million for the first quarter of 2007, a 305% increase. Culane continues its program of evaluating lands at Killam, and expects to see significant increases in its reserve value during the year as the Company drills and proves up more oil and natural gas reserves on its new and existing land base. The Company plans to provide an operations update early in the third quarter.

About Culane Energy Corp.

Culane Energy is a junior oil and gas company engaged in the exploration, development and production of oil and natural gas in Alberta.

ADVISORY: Certain information regarding Culane in this news release including management's assessment of future plans and operations, timing of drilling and tie-in of wells, productive capacity of the new wells, expected production rates, drilling success rates, dates of commencement of production, 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, 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, unexpected decline rates in wells, wells not performing as expected, 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 exhausted. Additional information on these and other factors that could effect Culane's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website ( www.sedar.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Culane 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.

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 wellhead.

23,872,354 Class A Shares

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contacts

Donald D. Staus
Culane Energy Corp.
President and Chief Executive Officer
(403) 263-2773
(403) 263-2776 (FAX)
Email: dstaus@culaneenergycorp.com

Stewart Larsen
Culane Energy Corp.
Vice President of Finance and Chief Financial Officer
(403) 263-2773
(403) 263-2776 (FAX)
Email: slarsen@culaneenergycorp.com

Thomas H. Field
Culane Energy Corp.
Vice President, Engineering and Operations
(403) 263-2773
(403) 263-2776 (FAX)
Email: tfield@culaneenergycorp.com

420, 333 - 5th Avenue S.W.
Culane Energy Corp.
Calgary, Alberta T2P 3B6
Website: www.culaneenergycorp.com