Canadian Oil

[kraftdinner]

Celestial receives Optimal approval, drills 5,150 feet


2007-02-05 12:27 MT - News Release

Mr. Patrick Acham reports

CELESTIAL ANNOUNCES FINAL EXCHANGE BULLETIN FOR ACQUISITION OF TRINIDAD OIL AND GAS ASSETS, COMMENCEMENT OF WELL DRILLING AND CORPORATE UPDATE

Celestial Energy Inc. has received the final exchange bulletin approving its qualifying transaction, which was the purchase of all of the issued and outstanding common shares of Optimal Services Ltd., a privately owned Trinidad and Tobago oil and gas corporation with an interest in lease operatorship block WD-4.

In addition, TSX-V acceptance for the transfer of 800,000 Celestial common shares owned by former directors and officers of Celestial to incoming directors, officers and employees of Celestial and Optimal at a price of 15 cents per common share has been approved.

Celestial has completed the drilling of a second replacement well, PS-182RD, which was spudded on Jan. 27, 2007, and drilled to a total depth of 5,150 feet targeting the Upper Forest formation. Production casing is being run to 5,100 feet and plans are to complete the well initially in approximately 50 feet of net pay between 4,650 feet and 4,950 feet in the Upper Forest formation. Approximately 60 feet of net pay remains to be exploited in the Upper Forest formation.

With respect to the first replacement well, PS-139RD, plans are also in progress to perforate two intervals totalling 35 feet of net pay in the Upper Cruse CR-1 sand unit after the initial production from the Upper Cruse CR-4 was interrupted due to water entry resulting from what is believed to be a poor primary cement job. The well has approximately 150 feet of net pay that remain to be exploited in the Lower and Upper Forest formations, which management will decide to proceed with following an assessment of the performance of the CR-1 zone.

We seek Safe Harbor.