Bow Valley Energy Ltd., an oil and natural gas exploration, development and production company with operations in western Canada and the U.K sector of the North Sea, announces an update on operations. Canada Production averaged 2,225 boe/d in the fourth quarter of 2005, up 43%from the fourth quarter of 2004. Production in January averaged approximately 2,250 boe/d, which was below the Company's expectations but 300-350 boe/d of new production from existing wells is expected to be brought on stream within the next two to ten weeks. Weather conditions, regulatory approvals, access to 3rd party facilities and availability of services have affected the timing of the Company's drilling, completion and tie-in operations. In addition, the Company participated in two (1.5 net) successful natural gas wells in January 2006, and currently has two rigs operating. Bow Valley expects to drill seven to ten wells in the first quarter of 2006 and 30 - 35 wells over the full year.

Recent meetings with the operator of the Blane, Enoch and Chestnut projects show the projects are currently running generally on-budget with development costs averaging approximately C$10.50 per boe. High levels of construction activity is putting pressure on timing, however Bow Valley continues to expect first production from Blane and Enoch within the next twelve months, and expects Chestnut to be on-stream within 18 months. A fourth field development at Etrrick is currently being discussed by partners and the Company expects to report on a Field Development Plan (FDP) before the end of the first quarter.
R. G. Moffat, President and CEO stated: "The Company's Canadian program delivered strong year-over-year growth in the fourth quarter of 2005. Weather and some operational issues have temporarily slowed that growth, but we expect to be back on-track shortly. We continue to make progress on our North Sea operations. With the contribution of the new field developments in the North Sea and growth in western Canada, we expect to be producing approximately 8,000 boe/d within the next twelve months. This production growth will take the Company's cash flow and earnings to a new and significantly higher level."