Cobalt Announces 2008 Year-End 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,
2008. These filings are available for review at www.sedar.com.


2008 Highlights

Cobalt was active during the year acquiring Crown mineral rights, conducting
seismic programs and drilling four (2.6 net) exploration wells. The 2008 year
represents Cobalt's first full year of operations and highlights are as follows:


- Successfully closed a property purchase to acquire approximately 18 boe/d
production and 1,200 net acres of undeveloped land at Woking, Alberta. 


- Capital expenditures in 2008 totaled approximately $4.4 million. The program
included $2.8 million for drilling, $0.2 million for seismic, $0.5 million on
land and property acquisitions, $0.4 million for facilities, and $0.5 million on
capitalized general and administrative costs.


- Reserves additions for the year included 236 Mboe on a Proved basis and 760
Mboe on a Proved plus Probable basis as contained in the independent reserve
evaluation completed by Sproule Associates Limited.


- A reserve life index of 9.3 years based on Proved plus Probable reserves and
the 2009 average production rate in the Sproule engineering report. 


- Finding and development costs for the year were $13.64 per boe on a Proved
plus Probable basis, including future development capital.


- The Company acquired 3,200 (1,280 net) acres of undeveloped Crown land located
at East Central Alberta and at Pembina, Alberta.


- Drilling activity included 4 (2.6 net) exploration wells resulting in two (0.6
net) successful wells placed on production in the first quarter 2009 and two
(2.0 net) abandoned wells.


- The Company completed two equity financings for total gross proceeds of
approximately $1.76 million.


- The Company fulfilled its 2007/2008 $5.3 million flow-through obligation. 

Operations Update & Outlook

Cobalt began the year with a property acquisition at Woking, Alberta. The Woking
property acquisition established Cobalt's initial production of approximately 18
boe/d (70% light crude oil) and the Company conducted three oil well
recompletions to increase this property's production to approximately 60 boe/d
at year end. Subsequent to year end, the Woking oil wells were shut-in due to
unsatisfactory field netbacks under depressed crude oil pricing. The Woking
property remains a viable asset with approximately 10 million barrels of oil in
place. With additional capital for pipelines and water disposal facilities
Woking would be expected to provide an attractive cash flow stream. 


Cobalt's 2008 business plan focused on exploration and development activities
which would establish a production base while incurring qualifying expenditures
to fulfill the Company's flow-through obligation. This objective was
successfully achieved by establishing Cobalt's initial production, exiting the
year at approximately 60 boe/d, and with two exploration discoveries: a new
light sweet oil prospect and a new natural gas discovery, both located in
Alberta.


During the fourth quarter, 2008 Cobalt participated in the drilling of one (0.43
net) horizontal well at Pembina utilizing multi-stage fracturing technology. The
well was put on extended testing in February and the Company is holding
information on this well confidential pending upcoming Crown land sales in the
area.

 
Cobalt currently holds six sections of undeveloped land on the Pembina prospect
with an average working interest of approximately 31% before payout (26% after
payout), plus a rolling option to farm-in on an additional 4 sections of
undeveloped land with an average working interest of 43% before payout (28%
after payout). At this point, the possible upside of the Pembina prospect
appears encouraging; however, it requires delineation drilling to further
evaluate its potential. Cobalt expects to work with its partners over the coming
year to drill additional wells and to possibly increase its undeveloped land
holdings. Financing for these activities is expected to be challenging while
capital markets are restricted. However, the Company will pursue options to move
the Pembina prospect forward including new equity, debt instruments, and
possible arrangements with industry peers in order to extract shareholder value
from the Pembina prospect.


Reader Advisory - This news release contains certain forward-looking statements
relating to future cash flows and drilling activities, assumptions with respect
to availability of financing 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.