Osprey Receives Approval for Louisiana Sale as Remedial Work is Being Completed in the Bayou Choctaw and BVR Fields


BRIDGEWATER, Nova Scotia, Oct. 2, 2001 (PRIMEZONE) -- Osprey Energy (CDNX:OEL) is pleased to announce that on September 27, the CDNX gave final approval to the sale of three Louisiana gas wells to a major US natural gas producer. In consideration, Osprey (75% working interest) and its partner, received a cash payment of $1.2 million (USD), three oil and gas wells, three salt-water disposal wells and other non-cash considerations.

The Company also announces that with the sale of the three northern Louisiana wells, its major holding, previously called the Cotton Valley Project, has been renamed the BVR Project. This reflects the consolidation of reserves in the three central Louisiana parishes (counties) of Beauregard, Vernon, and Rapides. The consolidation has also created operating efficiencies by concentrating the Company's holdings in a core area of Louisiana. However, the greatest efficiencies will be realized by the utilization of salt-water disposal facilities in a neighboring field, which will minimize the need for trucking salt-water long distances from five of the well sites. The BVR Project now includes 12 oil and gas wells, all of which are planned to be in production over the next several months.

The Company has been completing remedial work on both the Bayou Choctaw and BVR Fields during the period of lower commodity prices. A comprehensive remedial schedule to prepare a hole in the tubing of the Crosby 36A well and to bring on the Crosby 25 and the recently acquired Strickland 17 is being finalized The Company plans to have all three of these wells in production by the end of the year.

In compliance with regulatory requirements, the Company also announces that there was a change in placees for the over-subscribed private placement for 1.95 million units at 75 cents. One company did not participate as originally announced and was replaced by a company that subscribed for 300,000 units.

The Company also wishes to announce the appointment of John MacDonald as Vice President, Corporate Affairs and Communications. MacDonald, who served as vice president of the Canadian Teachers Federation (1996-1997), had been coordinator of the International Baccalaureate at Park View Education Centre in Bridgewater, N.S. for 11 years. He was also a media liaison officer with the Nova Scotia Teachers Union for 12 years prior to his election for two terms as union president (1992-1996). He currently serves on the executive of the Atlantic Provinces Ecumenical Council.

                        OSPREY ENERGY LTD.
                         "R. Gary Malone"

"This release was prepared by management who take full responsibility for its contents. The CDNX neither approves nor disapproves of this news release".

WARNING: The Company relies on litigation protection for "forward-looking" statements.


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