EXALL SIGNS GAS HANDLING AND OPERATING AGREEMENTS TO ALLEVIATE GAS PRODUCTION
CONSTRAINTS

CALGARY, Oct 4 /CNW Telbec/ - Exall Energy Corporation (TSX: EE) ("Exall" or the "Company") is pleased to provide an update concerning its progress on steps taken to alleviate the Marten Mountain gas production constraints.

Highlights are:

• A signed Gas Handling Agreement and Operating Agreement with Canadian Natural Resources Ltd. ("CNRL"),
• Completed Hot Tap into CNRL's Mitsue Gas Pipeline,
• Approval from the Alberta Energy Resources Conservation Board (the "ERCB") for the Exall Marten Mountain Battery expansion,
• Approval from the ERCB for the Exall Pipeline from Exall's Marten Mountain Battery to CNRL's Mitsue Gas Pipeline, and
• Ordered and shipping the equipment required for the Exall Marten Mountain Battery expansion.

Marten Mountain Operations

As of October 04, 2010, the Company has signed a Gas Handling Agreement and an Operating Agreement with Canadian Natural Resources Ltd. which is effective October 01, 2010. With these agreements in place, Exall and CNRL proceeded with the "Hot Tap" into the CNRL Mitsue Gas Line, completing the work on October 02, 2010.

On September 24, 2010 Exall received the ERCB permit required to commence the expansion of the Company's Marten Mountain Battery. This expansion is necessary in order to facilitate flowing Exall's liquid rich natural gas into the CNRL Mitsue Gas Pipeline. The equipment required for the completion of the battery expansion is expected to arrive and to be installed by late October or early November.

On September 28, 2010, Exall received approval from the Alberta Energy Resources Conservation Board for a pipeline to be installed from the Exall Marten Mountain Battery to the CNRL Mitsue Gas Pipeline. Exall expects the pipeline to be completed during the week of October 05, 2010.

Once tie in work and battery upgrades are complete, Exall expects to increase production to 28 e3m3 of natural gas and 330 m3 of oil per day from its Marten Mountain operations (1,468 BOED net to the Company). Exall will then be producing approximately 1,600 net BOED.

About Exall
Exall Energy Corporation is a junior oil and gas company active in its business of oil and gas exploration, development and production from its properties in Alberta, British Columbia and Texas. Exall is currently developing a new oil discovery at Marten Mountain in north-central Alberta.

The Company currently has 52,447,745 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.

For further information:

Exall Energy Corporation

Frank S. Rebeyka      Vice Chairman & CEO    Tel: [phone]

Roger N. Dueck President & COO Tel: [phone] x 223

[email protected]

Please visit Exall Energy's website at: www.exall.com

Renmark Financial Communications Inc.
Henri Perron: [email protected]
Maurice Dagenais: [email protected]
Tel. : [phone] or [phone] 
www.renmarkfinancial.com