Orleans Energy Announces Follow-Up Drilling Success and Additional Crown Land Acquisition at Waskahigan and Provides a Revised C

Orleans Energy Ltd. ("Orleans" or the "Company") (TSX:OEX) is pleased to provide
an operational update highlighting follow-up Montney light oil drilling success
and strategic land capture at Waskahigan in addition to an updated, light
oil-focused capital drilling program.


Waskahigan Light Oil Drilling Success and Key Land Capture

At Waskahigan, in West Central Alberta, Orleans successfully drilled and
completed its third horizontal well (1.0 net) located at 5-25-63-23W5M. The 5-25
well was drilled to a total measured depth of 3,510 meters with a horizontal
section of 1,183 meters in the Montney formation. Completion operations
encompassed a thirteen stage, 230 tonne fracture stimulation (average 18 tonnes
per stage). Following a 27 hour clean-up, the 5-25 well was flow tested on a
continuous 86 hour (3.6 days) flow-back test with a final rate of approximately
1,100 barrels per day ("bbls/d") of light gravity sweet oil (42 degree API) and
1.45 million cubic feet per day ("mmcf/d") of associated sweet natural gas for
an overall oil equivalent test rate of approximately 1,340 barrels of oil
equivalent per day ("boe/d"). After clean-up and 17 hours into the flow-test,
the 5-25 well recovered all of its completion load fluid and the final wellhead
flowing pressure was 563 psi. The success of the 5-25 well is a significant
event as it validates the Company's oil pool geological mapping and increases
Orleans' oil weighting of its corporate reserves and production profile. The
5-25 well is anticipated to be on-stream by the end of September 2010 at an
initial rate subject to the ERCB's New Oil Well Production Period limit, which
results in an estimated rate of approximately 550 boe/d, comprised of 451 bbls/d
of light crude oil and 0.6 mmcf/d of associated natural gas. The 5-25 well will
qualify for the Alberta Government's Horizontal Oil New Well royalty rate of 5%
for the first 36 months of production, up to a maximum of 80,000 barrels of oil
equivalent produced. 


The 5-25 well is a follow-up drill to the Company's 4-36 Montney oil discovery
at Waskahigan. On June 19, 2010, the 4-36 horizontal well (1.0 net) was brought
on-stream and is presently producing approximately 150 bbls/d of light gravity
sweet crude oil (42 degree API) and 0.65 mmcf/d cubic feet per day of associated
sweet natural gas for an oil equivalent rate of approximately 255 boe/d.
Effective August 1, 2010, the 4-36 well was granted Good Production Practice
("GPP") by the Energy Resources Conservation Board. The 4-36 well, drilled to a
total measured depth of 3,532 metres with a horizontal section of 1,256 meters,
was completed with a twelve-stage, 111 tonne fracture stimulation (average 9
tonnes per stage). Similar to the Waskahigan 5-25 well, the 4-36 well qualifies
for the Horizontal Oil New Well royalty rate of 5% for the first 36 months of
production, up to a maximum of 80,000 barrels of oil equivalent produced. 


With respect to Orleans' land holdings position at Waskahigan, at the September
1, 2010 Alberta Crown land sale, the Company was successful in acquiring two key
sections (2.0 net), immediately offsetting the 5-25 well. As a result, Orleans
presently has amassed a 33 section (21,120 acres), contiguous land block at
Waskahigan (almost an entire township), all at 100% working interest. The
Company believes that it has now amassed all of the significant, prospective
acreage in this emerging exploration area. As such, Orleans intends to undertake
a focused drilling delineation strategy on a go-forward basis. Refer to Revised
Focused Capital Program outlined hereafter. 


Revised Focused Capital Program

With the initial, favorable drilling results at Waskahigan on its oil-prone
acreage, the Company has the operational flexibility to focus on light oil
projects over the next 12 to 15 months within the context of a low natural gas
price environment. With oil prices presently approximately four times higher
than gas prices on an energy equivalent basis, the economic catalyst exists to
increase the Company's emphasis on pursuing light oil-weighted capital
investment opportunities. 


Consequently, as a result of the current commodity price environment and
early-stage drilling success for light oil at Waskahigan, Orleans intends to
focus its go-forward capital investments and re-allocate capital funds towards
its emerging Waskahigan resource play. The Company's focus will be on the
systematic delineation of its Waskahigan Montney acreage, specifically the light
oil prospective lands on the eastern portion of Orleans' 33 section land block
(33.0 net). Orleans' geological models have mapped approximately 50% of its
lands being situated within the oil reservoir. This strategic "delineation and
de-risking" objective, in contrast to a conventional approach skewed solely
towards production growth and cash flow expansion, is expected to enhance the
Company's understanding and value of the resource potential of its Waskahigan
land base this year and throughout 2011, thus positioning this asset base for
commercial infill development drilling on a much larger scale.


With this objective, Orleans' 2010 capital expenditures are anticipated to
increase to approximately $51 million (the "Updated 2010 Capital Program"), as
compared to the original 2010 capital program of $41 million. The Company
intends to internally fund the Updated 2010 Capital Program with generated cash
flow from operations and draw downs on its bank credit facility, which is
currently drawn $43.4 million against a borrowing base capacity limit of $60
million. The Updated 2010 Capital Program now includes the drilling of nine
wells (8.1 net), a reduction from the original budget of eleven (9.6 net) wells.
The updated drilling program includes five (4.1 net) horizontal wells at Kaybob
(already drilled) and four (4.0 net) horizontal locations at Waskahigan (two
drilled to-date with the remaining two to be drilled in the fourth quarter of
2010 with production additions anticipated in the first quarter of 2011, pending
success). The drilling and completion expenditure component of the Updated 2010
Capital Program is projected at $27 million, with the remaining funds allocated
towards investments in field facilities, seismic programs and land capture at
Waskahigan (of which approximately $11 million has already been incurred to-date
to acquire 14 sections). 


Based on the Updated 2010 Capital Program, reflecting a lower number of wells
drilled and brought on-stream this year than originally planned, Orleans'
average daily production for 2010 is now projected between 3,800 and 3,900
boe/d, weighted 82% natural gas and 18% natural gas liquids and light oil, with
a forecasted commodity weighting in early 2011 of 75% natural gas and 25% light
oil and natural gas liquids. With regards to projected cash flow from operations
for 2010, utilizing commodity price assumptions of an AECO gas price of C$3.75
per gigajoule, a West Texas Intermediate ("WTI") oil price of US$76.80 per bbl,
and an exchange rate of 1C$ = 0.96US$, cash flow from operations for 2010 is
estimated at $26 million or $0.40 per share (basic outstanding). Based on the
Updated 2010 Capital Program and cash flow projection, Orleans' year-end 2010
net debt balance is projected to approximate $48 million, as compared to its $60
million bank credit facility borrowing limit.


As a result of the Company's available capital being directed towards Waskahigan
light oil opportunities, Orleans-operated tight gas drilling projects in the
Kaybob Montney, Pine Creek Wilrich and the Duvernay shale have been
de-prioritized over the near-term. However, industry participants are actively
drilling these play types in close proximity to the Company's lands and thus
potentially "de-risking" and advancing these projects without the need for
Orleans to undertake its own capital investment in the near term. The Company's
Kaybob, Waskahigan and Ante Creek land base is located within the heart of the
newly developing Duvernay shale gas play. The Company holds 57 sections of Crown
lands within the fairway, all at 100% working interest, which includes rights in
both the Montney and Duvernay shale horizons. Refer to Orleans' August 12, 2010
news release for details on industry land sale activity involving the Duvernay
shale. 


In summary, although this Waskahigan delineation phase is early-stage, the
Company's focus on such could prove to be the most significant intrinsic "value
capture" initiative for Orleans since its Kaybob Montney gas discoveries and
follow-up development. The Company appreciates the patience exhibited by its
shareholders since the initial Waskahigan land foray back in September 2008 and
throughout the systematic accumulation of Orleans' large acreage position within
the prospective Montney fairway and looks forward to providing timely updates as
it executes this "delineation and de-risking" strategy. 


Orleans Energy Ltd. is a Calgary, Alberta-based crude oil and natural gas
company, with common shares trading on the Toronto Stock Exchange under the
symbol "OEX". Orleans is a team of dedicated, experienced professionals focused
on the creation of shareholder value via acquisition, exploration and
development of crude oil and natural gas assets in Alberta, Canada.


The information in this news release contains certain forward-looking
statements. These statements relate to future events or our future performance.
All statements other than statements of historical fact may be forward-looking
statements. Forward-looking statements are often, but not always, identified by
the use of words such as "seek", "anticipate", "plan", "continue", "estimate",
"approximate", "expect", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe", "would" and
similar expressions. These statements involve substantial known and unknown
risks and uncertainties, certain of which are beyond the Company's control,
including: the impact of general economic conditions; 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;
fluctuations in commodity prices and foreign exchange and interest rates; stock
market volatility and market valuations; volatility in market prices for oil and
natural gas; liabilities inherent in oil and natural gas operations;
uncertainties associated with estimating oil and natural gas reserves;
competition for, among other things, capital, acquisitions, of reserves,
undeveloped lands and skilled personnel; incorrect assessments of the value of
acquisitions; changes in income tax laws or changes in tax laws and incentive
programs relating to the oil and gas industry ; geological, technical, drilling
and processing problems and other difficulties in producing petroleum reserves;
and obtaining required approvals of regulatory authorities. The Company's actual
results, performance or achievement could differ materially from those expressed
in, or implied by, such 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, what
benefits that the Company will derive from them. These statements are subject to
certain risks and uncertainties and may be based on assumptions that could cause
actual results to differ materially from those anticipated or implied in the
forward-looking statements. The Company's forward-looking statements are
expressly qualified in their entirety by this cautionary statement. Except as
required by law, the Company undertakes no obligation to publicly update or
revise any forward-looking statements.


In this news release, reserves and production data are commonly stated in
barrels of oil equivalent ("boe") using a six to one conversion ratio when
converting thousands of cubic feet of natural gas ("mcf") to barrels of oil
("bbl") and a one to one conversion ratio for natural gas liquids ("NGLs" or
"ngls"). Such conversion may be misleading, particularly if used in isolation. A
boe conversion ratio of 6 mcf: 1 bbl is based on energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. 


Any references in this news release to initial and/or final raw test or
production rates and/or "flush" production rates are useful in confirming the
presence of hydrocarbons, however, such rates are not determinative of the rates
at which such wells will commence production and decline thereafter.
Additionally, such rates may also include recovered "load oil" fluids used in
well completion stimulation. While encouraging, readers are cautioned not to
place reliance on such rates in calculating the aggregate production for the
Company.