Culane Provides Operational Update

Culane Energy Corp. ("Culane") (TSX VENTURE:CLN) is pleased to provide an
operational update:


SASKATCHEWAN

DRILLING RESULTS 

On December 27, 2010 Culane commenced drilling operations on its Kerrobert
property. The well, at 16-10-34-22w3, reached total depth of 1,463m and was
logged on January 13, 2011. The Kerrobert well is a vertical stratigraphic test
well with two target formations in the Devonian. First, an 18 meter drill core
was retrieved from the Devonian Birdbear formation and sent for analysis.
Results of this analysis were encouraging with oil saturation, permeability, and
porosity better than expected. (Over a 5 meter dolomite interval, porosities
ranged from 20 to 26 percent and oil saturations ranged from 40 to 77 percent.
Permeabilities in this interval ranged from 34 millidarcies with a 40 percent
oil saturation to 545 millidarcies with a 69 percent oil saturation.) These
permeability and oil saturations exceed core results published on the
A12-4-39-27 W3M vertical test well located in the center of the oil producing
Hallam North Birdbear pool located in S.W. Saskatchewan. Culane is currently
applying for an HWP (Horizontal Well Project) approval to drill horizontal wells
into the Birdbear formation.


A deeper Devonian formation was also tested in the Kerrobert well and although
the formation structure increased by 7 meters from what was anticipated, the
zone proved to be uneconomic. 


At Coleville, a stratigraphic vertical test well into the Birdbear formaton was
drilled in the third week of January and although the structure had increased by
6 meters from a previous vertical test well, the zone did not warrant further
testing.


In Saskatchewan, Culane will pay a 2.5% Crown royalty on the first 100,000
barrels (16,000 m3) of oil produced from any horizontal wells drilled in the
Birdbear Formation on Saskatchewan Crown lands. Culane owns a 100 percent
working interest on approximately 44 sections of land in Kerrobert. 


ALBERTA

KILLAM WATERFLOOD RESULTS 

Water injection rates are now approximately 5,800 barrels of water per day, and
are expected to rise to approximately 6,500 bbls/d with the tie-in of the latest
water source well. In the third quarter of 2010, Culane drilled, cased and
completed two new water source wells at Killam. The two new water source wells
have been equipped, and tied in to the newly constructed water pipeline to the
Killam water injection facility. As a result of water injection into the Killam
pool, Culane is now observing increasing production rates in the field in the
last two months, along with comparable decreasing daily natural gas rates. The
new increases in water injection rates into the Killam reservoir are expected to
have a positive impact, further increasing oil production rates across all the
wells in the pool.


Culane has 31 multi-leg horizontal producing oil wells at Killam, 13 water
injectors that are a combination of vertical and horizontal wells and 12 water
source wells. 


Culane's independent engineering evaluator completed its most recent evaluation
of the Company's reserves as of December 31, 2009. The reserves have been
assigned as Proved, Probable and Possible. The evaluator has assigned Possible
reserves to the surfactant polymer flood. The Proved, Probable and Possible
reserves assigned at this time combine for a 22.5% oil recovery factor. The
"Discovered Petroleum Initially-in-place" at Killam net to Culane is estimated
at approximately 42 million barrels of 24 degrees  API oil. Culane maintains
100% ownership in this asset and is the operator. A new independent engineering
reserve report for December 31, 2010 is expected by late April 2011.


Water-flooding and Surfactant Polymer flooding can dramatically increase the
amount of recoverable oil reserves above the estimated 10% oil recovery
resulting from primary production. Analogous oil pool case histories have
established that water-flooding similar oil reservoirs has the potential to
recover up to 25% of the original oil in place and Surfactant Polymer flooding
has the potential to recover up to 40% of the original oil in place. The initial
feasibility study on the Killam oil pools indicates the potential for these
recoveries. 


Culane's current production is 1,021 barrels of oil equivalent per day, 76
percent oil. 


About Culane Energy Corp.

Culane Energy is a junior oil and gas company engaged in the exploration,
development and production of oil and natural gas in Alberta and Saskatchewan.


Reader Advisories

Forward-Looking Statements: This news release contains certain forward-looking
statements, including management's assessment of drilling results, future plans
and operations that involve substantial known and unknown risks, uncertainties
and assumptions, certain of which are beyond Culane's control. Such risks,
uncertainties and assumptions include, without limitation, those associated with
oil and gas exploration, development, exploitation, production, marketing,
processing and transportation, loss of markets, volatility of commodity prices,
currency fluctuations, imprecision of reserve estimates, environmental risks,
competition from other producers, 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. Culane'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 that Culane will
derive there from. Readers are cautioned that the foregoing list of factors is
not exhaustive. Additional information on these and other factors that could
affect Culane's operations and financial results are included in reports,
including Culane's annual information form for the financial year ended December
31, 2009, on file with Canadian securities regulatory authorities and may be
accessed through the SEDAR website (www.sedar.com). All subsequent
forward-looking statements, whether written or oral, attributable to Culane 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 Culane 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. 


The term "barrels of oil equivalent" or "BOE" may be misleading, particularly if
used in isolation. A BOE conversion of 6 Mcf:1 bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.


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