SURE ENERGY INC. ANNOUNCES SECURED NOTE FACILITY, INCREASED CREDIT FACILITY
AND 2011 CAPITAL BUDGET

CALGARY, Oct. 26 /CNW/ - Sure Energy Inc. (SHR, TSX) ("Sure Energy" or "the Company") is pleased to announce that it has signed a Note Purchase Agreement for a $20 million secured subordinated term loan facility (the "Secured Note Facility") from Deans Knight Capital Management Ltd. ("Deans Knight") on behalf of certain investors (the "Note Holders"). Deans Knight currently has control over 6,057,273 common shares or 12.93 percent of the outstanding shares of the Company. The drawn portion of the Secured Note Facility bears interest at 6.25 percent per annum, payable quarterly. The undrawn portion bears a standby fee of 0.25 percent. Warrants to purchase 2.5 million common shares at a price of $1.80 per share will be issued as additional consideration to the Note Holders. The Company has the ability to force the Note Holders to exercise the warrants if the weighted average price per share of Sure Energy equals or exceeds $2.80 per share for 20 consecutive trading days. The notes mature and the warrants expire 36 months from the date of closing. The Company is required to draw down a minimum of $10 million upon closing. Additional draws on the Secured Note Facility may be made at the Company's discretion in minimum tranches of $2.5 million. Implementation of the Secured Note Facility is subject to the finalization and execution of formal agreements and regulatory and shareholder approval.

Since Deans Knight is a related party to the Company, the Secured Note Facility and the issuance of the warrants requires approval of a majority of the minority shareholders. A Management Information Circular is expected to be mailed in November, 2010 in respect of a special meeting of shareholders to be held in the later part of December, 2010 to approve the transaction.

The Company is also pleased to announce that it has received an increase to its existing bank credit facility from $15 million to $20 million. The increase in the credit facility is as a result of the increase in lending value from recent discoveries. The facility consists of a $15 million revolving operating demand loan and a $5 million non-revolving acquisition/development demand loan. Upon approval by the shareholders, the Secured Note Facility will replace the existing $5 million non-revolving acquisition/development demand loan.

The Board of Directors of Sure Energy has approved Sure Energy's 2011 Capital Budget of $15 million. The Company has recently experienced success in two light oil prospect areas, at Redwater and Queensdale, and has identified 46 low risk horizontal drilling locations adjacent to the successful wells. These areas will be the focus of the 2011 drilling program.

The Secured Note Facility will allow the Company the flexibility to increase its 2011 capital program as success dictates and to execute strategic acquisitions to augment the current program.

Sure Energy Inc. is a publicly traded oil and gas exploration and development company listed on the Toronto Stock Exchange under the symbol "SHR".

Forward-looking Information

Certain statements contained in this release constitute forward-looking information. These statements relate to future events or Sure Energy's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on Sure Energy's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, statements pertaining to the conditions to implement the Secured Note Facility; the timing for shareholder approval; the replacement of the existing $5 million non-revolving acquisition/development demand loan; and the focus of Sure Energy's 2011 drilling program contain forward looking information. Sure Energy's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. Sure disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

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For further information: please visit our website at www.sureenergyinc.com or contact: Mr. Jeff Boyce, Chairman and CEO, Mr. Lance Wirth, Vice President, Finance and CFO, Phone: [phone], Fax: [phone], Email: [email protected]