Palo Duro Energy Inc.: Stock Options Granted

Palo Duro Energy Inc. ("Palo Duro" or the "Company") (TSX VENTURE:PDE.H)
announces that it has granted, pursuant to its stock option plan, options to
purchase an aggregate of 1,285,000 of its common shares. The options were
granted at an exercise price of $0.10 per share for a period of five years to
directors, officers and employees of the Company.


Palo Duro Energy Inc.

Bill Koutsouras, President & CEO

Shares Outstanding: 32,218,347

Certain statements contained in this news release constitute "forward-looking
information" as such term is used in applicable Canadian securities laws,
including information regarding the granting of stock options. Forward-looking
information is based on plans and estimates of management at the date the
information is provided and certain factors and assumptions of management.
Forward looking information is subject to a variety of risks and uncertainties
and other factors that could cause plans, estimates and actual results to vary
materially from those projected in such forward-looking information. Factors
that could cause the forward-looking information in this news release to change
or to be inaccurate include, but are not limited to, the risks that the
Acquisition may not close, the related to international operations and doing
business in foreign jurisdictions, risks associated with the oil and gas
industry and exploratory and development activities generally (e.g., operational
risks in development, exploration and production, delays or changes in plans
with respect to exploration or development projects or capital expenditures,
risks associated with equipment procurement and equipment failure), the risk of
commodity price and foreign exchange rate fluctuations, risks related to future
royalty rate changes, and risks and uncertainties associated with securing and
maintaining necessary regulatory approvals.