Cobalt Updates Proposed Acquisition & Financing

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

Cobalt Energy Ltd. ("Cobalt" or the "Company") (TSX VENTURE:CB.A) (TSX
VENTURE:CB.B) updates the status of the proposed acquisition at Woking, Alberta
and the associated financing, as previously announced on May 26, 2008. Extended
negotiations involving potential environmental liabilities have prevented the
Company from completing the proposed acquisition. Consequently, the proposed
financing has expired under a stipulation that the acquisition must be completed
by July 15, 2008. The Company and the vendor continue to work towards an
acceptable acquisition structure.


Cobalt currently holds a 32% working interest in a light oil pool at the Woking
property. The proposed acquisition targets its partner's 63% operated working
interest in these same assets. The Company has identified a number of oil well
re-completion opportunities and intends to immediately commence this work.
Cobalt is also currently licensing a natural gas exploration well in its East
Central Alberta core area and plans to drill this well at 100% working interest
during the second half of the year.


Cobalt participates in the exploration, development and production of
conventional crude oil and natural gas reserves in western Canada. The Company's
strategy is to build shareholder value through internally generated exploration
and development drilling and through selective acquisitions.


Reader Advisory - This news release contains certain forward-looking statements,
which include assumptions with respect to completion of an acquisition, 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.