Excelsior Energy Limited provides an operational and financial update prior to the commencement of winter drilling operations in Athabasca.

Excelsior is a well capitalized company with a resource intensive, high quality oil sands asset at Hangingstone, Alberta. As at September 31, 2008 the Corporation had working capital of $14 million. Excelsior is funded to complete the winter season drilling and seismic operations, to fully meet all requirements to submit a demonstration project application at the end of the second quarter of 2009, and to cover required general and administration costs. Excelsior is managing its financial resources in the context of the current market environment by maintaining a focused and disciplined approach to deploying capital. Excelsior has a track record of deploying capital efficiently and has achieved a finding cost of $0.47 per contingent resource barrel.

The Corporation is moving ahead with its winter program focused on four sections at Hangingstone which will be the cornerstone of the initial 10,000 bopd Phase 1 development. The focus area is situated immediately adjacent to the main highway, power grid, gas pipeline and a mapped water source. A 28 km in-fill 2D seismic program has been recently completed over the focus area to prioritize core well drilling targets. This data is now being processed and will be interpreted shortly. Two core drilling rigs and associated services have been contracted to conduct this seasons operations. Lease construction will commence in November, 2008 and core drilling operations will start in December, 2008. A program has been approved by the joint venture partners for up to 32 core wells, including the testing of a potential water source.

Excelsior's program to submit a 10,000 bopd demonstration project application to the Alberta Government is also on track:

• Environmental data collection from the focus area commenced in August 2008 and will continue into the spring of 2009. This includes the survey of likely sites for the central processing facility - two sites have been identified.

• An evaluation of water sources at Hangingstone has been completed. Laterally extensive, high quality aquifers averaging around 12 meters thickness have been identified at depths around 190 meters in the focus area. Petro-physical data indicates that the water has a relatively high salinity. An aquifer testing program is planned as part of the winter drilling program. The evaluation also identified a potential water disposal zone at the base of the McMurray Formation outside of the Focus Area in an area of leaner bitumen sands.

• An engineering consultancy with extensive SAGD oil sands experience has been contracted and commenced work to prepare a FEED (Front End Engineering and Design) engineering evaluation to support the demonstration project application.

• Specialist geological consultants have been contracted to undertake an evaluation of the sealing capacity of the Clearwater Formation. With reservoir depths in the focus area ranging from 250 to 450 meters and seal thicknesses in excess of 50 meters sealing capacity is not seen as a critical risk.

• Active consultation with all stakeholders has begun. Excelsior will continue to fulfill its obligations regarding stakeholders consultation as operations progress.

"We are naturally concerned about the current market environment and its impact on market values particularly of the junior oil and gas companies. As a company we are disciplined in our capital deployment which is evidenced by our track record so far" commented Dr. David A. Winter, Excelsior's President and Chief Executive Officer. "Hangingstone is a high quality, resource intensive asset. Its close proximity to the necessary utilities - access, power, gas and water will be drivers for capital efficiency and improve the opportunities to attract capital."