Galleon Announces Record Reserves In 2006

Galleon Energy Inc. announces record corporate reserves and strong financial results in 2006.

2006 Highlights

- Net present value of estimated future net revenue before tax from proved plus probable gross reserves based on forecast prices and costs discounted at 10% is $894 million, a 78% increase over December 31, 2005;

- Proved plus probable gross reserves grew to 50.4 million Boe, an increase of 54% over December 31, 2005 - over 80% of this increase was due to growth in light oil reserves;

- Proved gross reserves grew to 28.3 million Boe, an increase of 37% over December 31, 2005;

- Proved plus probable gross reserve life index of 12.7 years based on average Q4 2006 production;

- Replaced production 5.2 times based on proved plus probable gross reserves;

- Proved plus probable gross reserves comprise 36% light oil, 38% natural gas; 25% heavy oil and 1% natural gas liquids;

- Access to over 1 million gross acres of land, approximately 70% net owned;

- Funds from operations(1) of $85.2 million ($1.60/basic share), a 9% increase from 2005;

- Earnings of $13.8 million ($0.26/basic share);

- Average daily production of 9,370 Boe, an increase of 43% from 2005; natural gas - 32.6 Mmcf and crude oil and NGLs - 3,939 Bbl;

- Drilling of 118 gross wells resulting in 72 gross (59.9 net) natural gas wells and 34 gross (28.1 net) oil wells; a success rate of 90%;

- Capital expenditures of $283.3 million including $92.1 million on facilities, plus property acquisitions of $25.4 million;

- Share equity issuances for gross proceeds of $175.2 million and the issuance of 8,995,700 million Class A shares;

- Class A share three for two split in June 2006;

- Increase in the extendible revolving credit facility to $170 million;

- In February 2007, the extendible revolving facility was increased to $180 million and a $28.5 million non-revolving facility was approved to fund the acquisition of properties in the Dawson area of Alberta.

- (1)Funds from operations and funds from operations per share is not a standard measure under generally accepted accounting principles ("GAAP") and may not be comparable to similar measures presented by other companies. Management believes that funds flow per share is a useful supplementary measure that may assist investors in assessing the underlying per share value of the Corporation.

Reserves

The reserves of the Corporation were evaluated by Degolyer and MacNaughton Canada Limited ("DeGolyer") as at December 31, 2006. The reserve evaluation has been approved by the Board of Directors of Galleon.

Gross reserves are the total of the Corporation's working interest share before deduction of royalties owned by others. Net reserves are the total of the Corporation's working interest reserves after deducting amounts attributable to royalties owned by others, plus the Corporation's royalty interest reserves.

Galleon's proved plus probable gross reserve life index is 12.7 years based on average fourth quarter 2006 production. -- www.cnxmarketlink.com