Granite Oil Corp GXOCF

Update

[Smirn]

DEETHREE EXPLORATION LTD. ANNOUNCES INCREASED PRODUCTION RATES AND EXPANDS 2011 CAPITAL PROGRAM

DeeThree Exploration Ltd. has a current corporate production rate of approximately 2,850 barrels of oil equivalent per day with the increase in volumes attributable to the production obtained from five gross (4.8 net) wells out of the 11 gross (10.2 net) wells drilled and completed year to date.

Operational highlights:



¦Test rates for the first two Brazeau Belly River wells were 275 boe/day (85% oil & NGLs) and 100 boe/day (60% oil & NGLs) both at 89.3% net working interest;
¦The 30 day average initial production rate on the Company's first 100% working interest Bakken well is 175 boe/d (80% oil & NGLs with no associated water);
¦The fourth 100% working interest Bakken well is currently producing 173 boe/day (73% oil & NGLs with no associated water). The Company reduced drilling and completion costs by over 40% on this well;
¦The 30 day average initial production rate on the Company's first horizontal Sunburst well is 160 boe/day (69% oil & NGLs) at 100% working interest.


The Company is in various stages of testing or evaluating four of the other wells drilled year to date, one gross (1.0 net) Montney and three gross (2.4 net) Alberta Bakken wells. The Company abandoned one shallow gas well drilled in the Lethbridge area during the current quarter and is likely to abandon its first Montney well drilled in the Peace River Arch area due to higher than anticipated water production.

Due to the successful drilling results achieved year to date, the Company has increased its 2011 capital expenditure budget by $15 million. These additional funds will be allocated to the Company's Belly River oil play in Brazeau and Sunburst oil play in Lethbridge. The increase in capital expenditures will be funded through the Company's current working capital, fourth quarter cash flow and its unutilized credit facility.

We seek Safe Harbor.