PEARL CLOSES ACQUISITION OF ADDITIONAL INTEREST IN

PRODUCING MOONEY OIL FIELD IN NORTHERN ALBERTA

CALGARY, ALBERTA - Pearl Exploration and Production Ltd. ("Pearl" or the "Company") (TSX Venture: PXX and First North: PXXS) is pleased to announce that it has completed the acquisition of a 24% working interest in the Mooney oil field from Ravenwood Energy Corp. (“Ravenwood”), a private oil and gas company.  Pearl is the operator of the Mooney field, situated in northern Alberta, and the acquisition of Ravenwood’s working interest brings Pearl’s working interest in the field to 98.1% and immediately adds approximately 625 boepd in current production. 

Pearl acquired Ravenwood’s working interest, effective as at July 1, 2007, for the sum of Cdn $20,000,000, subject to industry standard adjustments.  50% of the net purchase price was paid in cash and 50% was paid by the issuance of 1,475,108 Pearl common shares at a deemed price of Cdn $5.12 per share (closing trading price as of July 13, 2007 on the TSX Venture Exchange).

Located in north-central Alberta, the Mooney field is one of Pearl’s best performing assets. Mooney is a conventional heavy oil field which produces from the Bluesky sand formation. A high recovery factor is expected due to the combination of relatively low viscosity 16 degree API gravity oil and favourable reservoir characteristics which facilitates efficient oil flow. Pearl has mapped the potential area of the Mooney Bluesky heavy oil pool at approximately 50 sections, and a stratigraphic well program is ongoing to further delineate the field’s areal extent.

The reservoir properties and the high quality oil also make the pool conducive to water flooding which is expected to further enhance recovery. A preliminary water flood simulation study showing higher secondary recoveries has been prepared by independent reservoir engineering consultants. Pearl commenced water flooding this pool in July 2006 after converting the original horizontal oil well in the pool to a water injector with current injection rates at approximately 1,200 barrels per day. A positive response to this water injection was observed in the two offsetting oil producers and an expansion of the water flood project area is planned in 2007.

Pearl is a public company focused on delivering disciplined growth by establishing a North American portfolio of oil and gas projects with an emphasis on large resource opportunities.  Additional information on Pearl is available on our website at www.pearleandp.com.

The company’s Certified Advisor on First North is E. �hman J:or Fondkommission AB.

All references in this release to boe's are based on a 6 to 1 conversion ratio. Boe's may be misleading, particularly if used in isolation. A boe conversion of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead

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Forward-looking statements:  This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company’s capability to execute and implement its future plans.  Actual results may differ materially from those projected by management.  For such statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release