Cobalt Announces 2007 Year-End Financial Results

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES FOR DISSEMINATION IN THE UNITED STATES.

Cobalt Energy Ltd. (TSX VENTURE:CB.A) (TSX VENTURE:CB.B) ("Cobalt" or the
"Company") is pleased to announce that it has filed with applicable Canadian
securities regulatory authorities its audited year-end financial statements and
related Management Discussion and Analysis for the year ending December 31,
2007. These filings are available for review at www.sedar.com.


Highlights for the 2007 year represents Cobalt's initial seven months of
operations and are as follows:


2007 Highlights

- Cobalt assembled its management team and closed its initial public offering on
May 29, 2007 raising gross proceeds of $5.3 million. The Company's shares began
trading on the TSX Venture Exchange under the symbols CB.A and CB.B on June 8,
2007.


- Cobalt was active during the year acquiring Crown mineral rights, conducting
seismic programs and drilling two (1.7 net) exploration wells as it executes the
initial phase of its exploration drilling program.


- The Company acquired 1,920 acres (three sections) of undeveloped Crown land at
100% working interest located at its core exploration area at Boundary Lake,
Alberta. Cobalt also acquired 2,560 acres (four sections) at 100% working
interest of undeveloped Crown land in its core exploration area in East Central
Alberta.


- Seismic activity included shooting 25 km of new proprietary seismic and
interpretation of 55 km of industry trade seismic data at Boundary Lake. At East
Central Alberta the Company evaluated 33 km of trade seismic and subsequently
shot 25 km of new proprietary seismic.


- The Company drilled 2 (1.7 net) exploration wells in the second half of the
year resulting in one (1.0 net) abandoned well and one (0.7 net) suspended well.


- Capital invested in 2007 totaled $2.3 million. The program included $1.1
million for drilling, $0.7 million for seismic, $0.3 million on land
acquisitions, and $0.2 million for facilities.


- At December 31, 2007, Cobalt had $3.7 million in cash and short term deposits,
a working capital surplus of $2.7 million, no outstanding bank debt and has
completed $1.9 million of tax eligible expenditures with $3.4 million
flow-through obligation remaining to be renounced by December 31, 2008.


- During the fourth quarter, Cobalt entered into an agreement to acquire
approximately 20 boe/d production and 1,200 net acres of undeveloped land at
Woking, Alberta, located in the Peace River Arch region, in exchange for
$375,000 in cash. This property acquisition subsequently closed on January 8,
2008.


Activity Update

Cobalt's growth strategy employs both drill bit activity and property or
corporate acquisitions. The Woking property acquisition establishes Cobalt's
initial production of approximately 20 boe/d (70% light crude oil) within the
Company's primary core area of the Peace River Arch. The acquisition also
provides an estimated 16,000 boe Proven plus Probable reserves, and land
holdings comprised of 8,480 gross acres (3,600 net acres) with approximately
1,200 undeveloped net acres.


In December 2007, Cobalt drilled its first exploration well into the Triassic
formation at its Boundary Lake prospect located in the Peace River Arch. Upon
testing, the well did not prove economic rates of hydrocarbons and was
suspended. Further exploration drilling will commence after the initial low risk
exploitation work at the Woking property is completed. The Woking recompletions
include up to five oil well recompletions. This work is planned to begin during
the second quarter, after the spring break-up period.


Outlook

Cobalt's 2008 business plan is comprised of three strategic elements. The first
element is to build our base production during the first and second quarters by
exploiting the low risk opportunities at our recently acquired Woking property.
These opportunities are primarily targeting crude oil and with the recent oil
pricing levels this activity is expected to increase our production base with
attractive operating netbacks. Second, we will be building our exploration
drilling inventory with internally generated prospects and plan to drill up to
six exploration wells in the second half of the year to fulfill our remaining
$3.4 million flow-through obligation by December 31, 2008. The majority of
capital expenditures will be directed towards the Peace River Arch area
exploring for liquids-rich natural gas and crude oil well recompletions at
Woking. Concurrently, we anticipate adding to our current undeveloped land
position in multi-zone regions of Alberta, and to build our production base
beyond the Woking property. Finally, acquisitions are a part of Cobalt's growth
strategy and the Company will be continually evaluating property or corporate
acquisition opportunities which are well-suited to its business plan. We look
forward to an active and productive year ahead.


Reader Advisory - This news release contains certain forward-looking statements,
which include assumptions with respect to completion of an acquisition, increase
to production and reserves and use of capital. The reader is cautioned that
assumptions used in the preparation of such information may prove to be
incorrect. All such forward looking statements involve substantial known and
unknown risks and uncertainties, certain of which are beyond the Company's
control. Such risks and uncertainties include, without limitation, risks
associated with oil and gas exploration, development, exploitation, production,
marketing and transportation, loss of markets, volatility of commodity prices,
currency fluctuations, imprecision of reserve estimates, environmental risks,
competition from other producers, tax treatment (including royalties), inability
to retain drilling rigs and other services, delays resulting from or inability
to obtain required regulatory approvals and ability to access sufficient capital
from internal and external sources, the impact of general economic conditions in
Canada, the United States and overseas, industry conditions, changes in laws and
regulations (including the adoption of new environmental laws and regulations)
and changes in how they are interpreted and enforced, increased competition, the
lack of availability of qualified personnel or management, fluctuations in
foreign exchange or interest rates, stock market volatility and market
valuations of companies with respect to announced transactions and the final
valuations thereof, and obtaining required approvals of regulatory authorities.
The Company's actual results, performance or achievements could differ
materially from those expressed in, or implied by, these forward-looking
statements and, accordingly, no assurances can be given that any of the events
anticipated by the forward-looking statements will transpire or occur, or if any
of them do so, what benefits, including the amount of proceeds, that the Company
will derive therefrom. Readers are cautioned that the foregoing list of factors
is not exhaustive. All subsequent forward-looking statements, whether written or
oral, attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by these cautionary statements. Furthermore, the
forward-looking statements contained in this news release are made as at the
date of this news release and the Company does not undertake any obligation to
update publicly or to revise any of the included forward-looking statements,
whether as a result of new information, future events or otherwise, except as
may be required by applicable securities laws. BOE or boe/d may be misleading
particularly if used in isolation. A BOE conversion of 6mcf:1bbl is based as an
energy equivalency conversion method primarily applicable at the burner tip and
does not necessarily represent a value equivalency at the well head.