NEWS RELEASE                                                                                          

October 17, 2007

PEARL CLOSES CDN $110 MILLION PRIVATE PLACEMENT

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 closed the private placement as announced on October 4, 2007.  The Company sold, on a bought-deal, private placement basis, an aggregate of 29,400,000 common shares of the Company at a price of Cdn $3.75 per share for gross proceeds of Cdn $110,250,000.

The placement of the common shares was underwritten and led by GMP Securities L.P. and included Canaccord Adams Limited.   Net proceeds of the private placement will be used to fund the recently announced acquisition of heavy oil assets from PetroHunter Energy Corporation and the Company’s ongoing development programs as well as for general working capital purposes.  The private placement has received conditional regulatory approval and the common shares have been issued to the investors.  The common shares issued pursuant to the private placement are subject to a 4 month hold period expiring February 18, 2008.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of Pearl within the United States. The securities of Pearl have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws. Accordingly, the shares may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under 1933 Act and applicable state securities laws or an exemption from such registration is available.

Pearl Exploration and Production Ltd. is a public company focused on delivering disciplined growth by establishing a North American portfolio of heavy oil projects with an emphasis on large resource opportunities.  Additional information on Pearl is available on the Company’s website at www.pearleandp.com.

 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.

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

For further information, please contact:

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