PetroHunter Energy Corp. (fka PHUN)

[INDY]

NEWS 10/6:

PetroHunter Energy Corporation Provides Update on Projects in Colorado and Australia

Materials Ordered for Buckskin Mesa Gas Gathering System in Colorado; Significant Oil Shows Encountered in Shenandoah #1 Well in Australia; Two Law Suits Settled

DENVER, CO, Oct 06, 2008 (MARKET WIRE via COMTEX) -- PetroHunter Energy Corporation (OTCBB: PHUN) today announced it has modified its drilling and development plans for its 20,000 net mineral acre Buckskin Mesa project in the Piceance Basin of Colorado, and has settled its two pending court cases. PetroHunter also announced that it encountered potentially significant oil shows in its Shenandoah #1 well drilled on one of the Company's Exploration Permits in Australia.
Colorado -- Buckskin Mesa Operations

As part of the settlement of the "Daniels Litigation" (described below), PetroHunter and Daniels agreed to extend the date for commencing the first well in Buckskin Mesa to July 31, 2009, and to increase the total minimum number of obligation wells to 20, through December 2010. PetroHunter and Falcon Oil & Gas Ltd. intend to close the first phase of their agreement (announced August 25, 2008) in the next few weeks, under which PetroHunter will begin testing and completion operations on one or more of the five wells, which PetroHunter previously drilled but did not complete in Buckskin Mesa.

PetroHunter intends to diligently move forward on the Buckskin Mesa gas gathering system. Under PetroHunter's agreement with CCES Piceance Partners I, LLC ("Clear Creek"), PetroHunter and Clear Creek have begun ordering all necessary materials for construction of the Buckskin Mesa gathering facilities.

Australia -- Potentially Significant Log and Oil Shows in the Beetaloo Basin Project

As announced in 2007, PetroHunter drilled its Shenandoah #1 well (the "Well") on one of its Exploration Permits in the Northern Territory, Australia. In 2008, the Company engaged NuTech Energy Alliance to further analyze the logs from the Well, and to run a shale model, using recent North American oil productive fractured shale analogs. The preliminary results of the NuTech analysis for shales at approximately 3,000-foot depth indicate an estimated initial production rate of several hundred barrels a day (assuming a horizontal well), and a 3-year recovery of 70,000 barrels per well.

Settlement of Litigation

As previously disclosed by PetroHunter, on June 30, 2008 PetroHunter filed a law suit against Daniels Petroleum Company ("DPC") in Denver, Colorado, in which PetroHunter asked the court to interpret the force majeure provisions in the existing contract between DPC and PetroHunter (the "Daniels Litigation"), related to PetroHunter's drilling activities in Buckskin Mesa. On September 30, 2008, the parties finalized and entered into a settlement agreement on this matter and have filed a joint stipulation to fully dismiss the Daniels Litigation.

Also as previously disclosed, Century Drilling Company ("Century") filed a law suit in December 2007 against PetroHunter and its wholly-owned Australian subsidiary (Sweetpea Petroleum Pty Ltd.) in the Supreme Court of Queensland, Australia, in which Century claimed that PetroHunter had breached certain obligations under the parties' drilling contract (the "Century Litigation") related to PetroHunter's Australian operations. PetroHunter and Sweetpea filed counterclaims against Century in the Century Litigation. On August 25, 2008, the parties entered into a settlement agreement, which includes full dismissal of the Century Litigation.

"With the working capital available from the Falcon transactions, as well as removing the uncertainties by settling these two cases, PetroHunter has cleared the path to test Buckskin and to begin implementing our exploration and development plan on both our major assets," stated PetroHunter Chairman and CEO, Charles B. Crowell. "We are also encouraged by the NuTech findings in Beetaloo and will continue to move forward on the opportunities presented in Buckskin Mesa and the Beetaloo Basin."