CALGARY, Dec. 16 /CNW/ - Galleon Energy Inc. ("Galleon") (TSX: GO) is pleased to announce another quarter of successful drilling results.

Highlights:
    -  To date, in Q4 2008, Galleon has drilled 30 wells with twenty-six
       wells (25.1 net) cased for production; a success rate of 87%. Five
       wells (5 net) were cased for light oil, three wells (3 net) were
       cased for heavy oil, two wells (1.6 net) were cased for
       conventional gas, three wells (2.9 net) were cased for gas in the
       Central Montney area and thirteen wells (12.6 net) were cased
       Eastern Montney horizontal gas wells. Two wells are currently
       drilling.
    -  A significant gas pool has been delineated in the Central Montney
       fairway. Five wells (average 80% interest) are currently producing
       in aggregate at a restricted rate of over 8 Mmcf/d gross from this
       Montney pool. These five wells are expected to produce, in
       aggregate, at an initial rate of 14 Mmcf/d gross once the facility
       upgrade has been completed in the first quarter of 2009.
    -  A second Central Montney fairway has been further delineated.
       Three wells are currently producing in aggregate over 4 Mmcf/d net
       from the Montney zones and one well remains to be completed.
    -  These two Central Montney development projects have come on stream
       at costs (including drilling, completion, tie-in and facility
       costs) on average of less than $10,000 per producing BOE. These
       projects have relatively long life reserves.
    -  Including the thirteen (12.6 net) Eastern Montney horizontal wells
       drilled in Q4 2008, in aggregate, twenty-four Eastern Montney
       horizontal wells (23.6 net) will be drilled in 2008. On stream
       costs (including drilling, completion, tie-in and facility costs)
       on average for the project are less than $10,000 per producing
       BOE. The current production from the Eastern Montney area exceeds
       4,600 BOE/d net (25.5 Mmcf/d and 350 Bbl/d oil and liquids).
    -  Current production is in excess of 19,000 BOE/d based on field
       report estimates.
    -  In November 2008, Galleon's banking syndicate comprised of six
       banks confirmed available credit facilities of $310 million.
The 2009 drilling program will continue to focus on low risk development
wells with the objective of organic growth funded by cash flow. Low cost
production additions and cost control in all areas continues as a high
priority.
Discovery in one Central Montney project leads to a new core area
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Galleon is pleased to confirm that recent drilling has delineated a significant Montney gas pool in the Central Montney fairway. This has resulted in significant production growth and reserve additions based on internal evaluations.

Production from this pool has grown from approximately 1.7 Mmcf/d (72% interest) in Q2 2008 to the current restricted rate of over 8 Mmcf/d gross with an additional 6 Mmcf/d gross of production waiting on facility upgrade. The 100% Galleon owned facility will be upgraded to 15 Mmcf/d and is scheduled for completion in Q1 2009.

Based on the five wells drilled to date and 3D seismic interpretation, Galleon has delineated a pool that it estimates is approximately 10 sections in size. This project yields high deliverability rates at a low cost. Galleon plans to drill up to 4 additional wells on single section spacing to further prove any expansion to this pool in 2009. Over the life of the project, full development will require in excess of two wells per section.

Second Central Montney project with multi year drilling upside
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Galleon has a second Central Montney project which has been delineated in 2008. The current Montney production from this project is over 4 Mmcf/d net from three wells.