CALGARY, March 24 /CNW Telbec/ - Exall Energy Corporation ("Exall ") (TSX: EE) is pleased to announce its financial and operating results for the three months and fiscal year ended December 31, 2010; and that it has filed its Annual Information Form which contains reserves data and other oil and gas information required by Section 2.1 of NI 51-101. Exall's annual filings can all be found at www.exall.com or www.sedar.com.

Exall achieved record production in 2010 and saw significant reserve additions due to its operational success in Mitsue, Alberta. Exall's 2010 operational success has resulted in Exall currently producing approximately 1,500 boe per day with 500 boe per day shut-in, waiting on the retirement of New Oil Well Production Period ("NOWPP") over production.

Highlights of Fiscal 2010 include:

• A 125 percent increase in the fourth quarter 2010 production average to 999 boe per day from the fourth quarter 2009 production average of 444 boe per day,
• A 113 percent increase in the Fiscal 2010 production average to 877 boe per day from the fiscal 2009 production average of 412 boe per day,
• An 82 percent increase in Fiscal Year Ended December 31, 2010 Company Total Proved ("TP") reserves from the December 31, 2009 TP reserves of 1,151.6 Mboe to 2,093.3 Mboe,
• A 73 percent increase in the Fiscal Year Ended December 31, 2010 Net Present Value (NPV) of the P+P reserves to $101.5 million (discounted at 10 percent, before tax, utilizing the AJM price forecast effective December 31, 2010) up from $58.6 million,
• A 32 percent increase in Fiscal Year Ended December 31, 2010 Company Total Proved plus Probable ("P+P") reserves from the December 31, 2009 P+P reserves of 2,473.6 Mboe to 3,253.1 Mboe,
• The drilling of 6.0 gross (4.2 net) wells with 4.0 gross (2.8 net) wells completed, 3.0 gross (2.2 net) wells tied in and 2.0 gross (1.4 net) wells in various stages of completion,
• The identification of a second Gilwood sand trend with all-weather access,
• The completion of upgrades the Marten Mountain pipeline and battery facility, and
• The acquisition of 4,520 gross (2,983 net) acres of undeveloped land in Mitsue, Alberta.

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Results of Operations

Oil and gas exploration and development expenditures were $7,733,509 for the fourth quarter of 2010, and $21,687,987 for the year which compares to $2,964,933 and $4,543,314 for the comparable periods in 2009.  During 2010 Exall participated in the drilling of 6 gross oil wells in the Marten Mountain area of Mitsue, Alberta.  Of the six wells, four wells have been tied-in with three placed on-stream during calendar 2010.

In the Mitsue, Alberta region Exall acquired 4,520 gross (2,983 net) undeveloped acres of land with an average working interest of 66%, securing additional high impact drilling opportunities.

Production for 2010 of 877 boe per day represents a 113% increase over 2009. Funds from operations for the year of $11.3 million or $0.22 per share were primarily the result of the increased production, increased commodity prices received during the year (Exall's prices received were up 32% during 2010 averaging $69.78 per boe compared to $52.82 per boe in 2009), increased royalty prices paid during the year (Exall's royalties paid were up 28% during 2010 averaging $23.98 per boe compared to $18.67 per boe in 2009), and decreased operating cost paid during the year (Exall's operating costs were down 29% during 2010 averaging $6.51 per boe compared to $9.12 per boe in 2009).

Net income, as a result, for 2010 was $3,054,239 or $0.06 per share compared to a net loss for 2009 of $2,132,662 or a loss off $0.05 per share.

Overview

Exall's average daily production for the fourth quarter of 2010 increased 125 percent to 999 barrels of oil per day ("boe/d") from 444 boe/d in the fourth quarter of 2009. As at December 31, 2010 Exall's net exit production rate and productive capacity were as outlined below:

The difference between the December 31, 2010 production rate of 1,531 boe/d and the productive capacity of 2,031 boe/d was that Exall had shut in one well due to the fact that it had overproduced its allowable volumes during the NOWPP as prescribed by the Alberta Energy Resource Conservation Board ("ERCB"). This over production will be retired during the first six months of 2011. Should Exall receive approval of its third waterflood and Good Production Practice ("GPP") application, the over production would be retired earlier than the estimated six months.

Exall's production strategy is to produce all new wells at a rate approximating their productive capacity during the NOWPP, which will usually result in the well over producing its allowable as prescribed by the ERCB. As such, each new well will see an initial period of high productivity, significantly enhancing Exall's production, followed by a period where the well is shut in. During the shut in time frame, Exall will, should the facts warrant, apply for additional waterflood approvals which will require water injection wells. Exall may convert existing producing wells into water injection wells if the result were to be; an overall increase to, and or a long term stabilization of production.

Exall estimates that as the number of producing wells continues to increase in the Marten Mountain region of Mitsue, Alberta, the significant production fluctuations now seen by the bringing on and shutting in of new wells will begin to diminish.

Reserves

Exall received the results of an independent engineering evaluation of its oil and gas reserves conducted by AJM Petroleum Consultants Ltd. effective December 31, 2010. This evaluation was prepared in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101). This instrument, which was adopted by the Canadian Securities Administrators, sets out standards of disclosure for oil and gas activities and mandates the application of evaluation standards defined in the Society of Petroleum Evaluation Engineers (SPEE) Canadian Oil and Gas Evaluation Handbook (COGEH).

Highlights of the 2010 Reserve Report include:

• Company working interest reserves are 2.093.3 Mboe total proved and 3,253.10 Mboe proved plus probable,
• In 2010 development activity added 941.7 Mboe of total proved reserves and 779.5 Mboe of proved plus probable reserves,
• Reserve replacement was 3.0 times total proved and 2.5 times proved plus probable,
• The net present value of the proved plus probable reserves is $101.5 million, discounted at 10 percent, forecast prices, before tax,
• Reserve life index of 3.7 years total proved and 5.1 years proved plus probable based on the 2011 annual average production rate and year-end reserves.

Substantial additions to reserves in 2010 are attributed to successful operations in the Marten Mountain area of Mitsue, AB. Light oil and solution gas reserves in the prospect area account for 83 percent of total proved and 90 percent of proved plus probable reserves of the Company. Exall's operations for 2011 will focus largely on continued exploitation and development of this property.

Working Interest Reserves History

During Fiscal 2010 Exall added total proved reserves at $26.20 (including future development costs) and added total proved plus probable reserves at $27.33 per boe (including future development costs) for inception to date finding and development costs as at December 31, 2010 of $31.19 per boe on the total proved reserves and $23.82 per boe on the proved plus probable reserves including future development costs. Significant future development costs included the pipeline and facilities planned for the Marten Mountain area. Future drilling will utilize those facilities and along with the anticipated saving on drilling cost can be expected to reduce the per barrel finding and development costs substantially as the property is developed.

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Outlook

Exall has focused its capital through 2010 in development of the Marten Mountain Prospect area located in the Mitsue area of North-Central Alberta. Six wells have been drilled to date offsetting the 2007 and 2008 discovery wells drilled by Exall.  Four wells have been completed and put on stream through the Company-owned pipeline and battery facilities. Completion operations are underway on the remaining two wells.

Permanent access to the north Marten Mountain "A" Sand extension test well was completed in Q2. Additional new horizontal lateral wells will be drilled into the reservoir identified by the 10-12 well which had been lost due to wellbore instability. Two additional wells are planned through Q1 2011 due to the winter drilling access restrictions.

The wells drilled during the summer of 2010 have established continued multi-zone sand development with a number of offset drilling opportunities. The ability to continue development of this key property year round has allowed Exall to accelerate development plans in the Marten Mountain area.

Exall has expanded battery facilities and tied into a gas line in order to facilitate increased production rates. The Company's wells are currently constrained by limits to water injection. An application to provide additional water injection for the Company's waterflood scheme has been submitted with the ERCB to begin injecting additional water on behalf of the enhanced recovery scheme.

Changes introduced to the New Royalty Framework ("NRF") by the Government of Alberta, including Transitional Royalty rates and drilling incentives, with the objective of alleviating the excessive royalty burden of the NRF and to spur drilling have improved the economics of drilling activity on the Company's lands. The Government of Alberta has made some significant permanent changes in the Modified Royalty Framework ("MRF") which has several features which will directly affect the future of Exall. The most significant of the changes to Exall are:

1. The reduction of maximum royalty rate paid on high-rate oil wells from 50 percent to 40 percent starting in January 2011. This change will have a direct impact on the cash flow of Exall. The two Marten Mountain wells currently producing on GPP have been subject to the 50 percent maximum royalty rate since they went on production. The change improves the netback per barrel, which is reflected in the increased NPV of the reserves per the Reserves Update.
   
   
2. Continuation of the 5 percent cap on royalties for the first year or first 50-70,000 barrels of oil, depending on measured depth, as a permanent program. Although this program was already in place, the Government has now made assurances that this will be a permanent feature in the Modified Royalty Framework. After the first 50-70,000 barrels produced new oil wells will be subject to a maximum royalty of 40 percent.
   
   
3. Continuation of the Drilling Credits of $200 per meter to the end of its proposed term at April 1, 2011. Exall has made arrangements with other companies to have their credits assigned and collected from royalties paid by Exall in a procedure encouraged by the Provincial Government. This effectively reduces the royalties paid by Exall and provides access to capital for further drilling and development.

With the continued drilling success Exall has managed to finance activities through cash flow, increased debt and additional financings. The new Modified Royalty Framework provides the necessary incentive to continue to aggressively exploit the high-productivity light, sweet oil assets the Company holds in the Mitsue area.

Exall is a light oil-weighted company with high operating margins. Starting from a modest production base of light oil and gas, the Company has shown itself capable of setting and achieving ambitious production and cash flow targets. This puts the Company in a favorable position to exploit existing opportunities and potentially take advantage of opportunities that arise. Exall will continue to focus on organic growth through exploitation and expansion of its existing oil producing properties.

About Exall

Exall is a junior oil and gas company active in its business of oil and gas exploration, development and production from its properties in Alberta, and Texas. Exall Energy is currently developing the new Mitsue area "Marten Mountain" discovery in north-central Alberta.

Exall Energy currently has 61,738,854 common shares outstanding. The Company's common shares are listed on the Toronto Stock Exchange under the trading symbol EE.

Reader Advisory

This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including those relating to results of operations and financial condition, capital spending, financing sources, commodity prices and costs of production. By their nature, forward-looking statements are subject to numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, actual results may differ materially from those predicted. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such factors include fluctuating commodity prices, capital spending and costs of production, and other factors described in the Company's most recent Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. Such forward-looking statements are made as at the date of this news release, and the Company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

For the purposes of calculating unit costs, natural gas has been converted to a barrel of oil equivalent (boe) using 6,000 cubic feet equal to one barrel (6:1), unless otherwise stated. The boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore boe may be misleading if used in isolation. This conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.