North Peace Energy Corp. (North Peace Energy) has reported revenues of CAD0.4 million for the year-end 2008, compared with the revenues of CAD0.34 million in the previous year. It also reported a net loss of CAD1.5 million, or CAD0.032 loss per share, for the year-end 2008, compared with the net loss of CAD1.2 million, or CAD0.04 loss per share, in the previous year.

Fourth Quarter Operations and Financial Update:

— Working capital of CAD10.3 million and no debt for the year-end 2008

— Capital expenditures of CAD8.4 million in the fourth quarter and CAD22 million for the year ended December 31, 2008

Cyclic Steam Stimulation (CSS) Pilot Project Construction Update:

— Building of the facility is complete

— Total pilot facility costs are anticipated to be about CAD15 million

— Post pilot building the corporation has about CAD6 million of working capital

CSS Pilot Project Operations Update:

— Steaming on the first well (L1) is complete and steaming of the second well (L2) has been initiated

— L1 is at present soaking and will be placed on flowback in early May 2009

— Conversion to pumping is anticipated later during the month

— Production is anticipated to last several months and will be to be characterized with initial high water cuts which will decrease throughout the production period

— Production and oil sales are dependent on spring ground conditions

— For this first steam cycle of L1, injection was completed at 75,000 bbls (cold water equivalent), 60% of the initially targeted slug size

— This condensed slug size was determined by organization as adequate to generate representative production information and not result in any material changes to steam oil ratios

— The steam injection rates were limited by the regulated pressure limitation of 9,000 kPa

— So far, steam injection pressures and rates confirm the absence of thief zones

Future Development:

— During the first half of 2009, the Company is focusing on pilot operations

— The operational data garnered from the pilot will be used to expand steaming and operational strategies as well as to validate the well models specific to the red earth asset

— Injection and production data will be collected over extra cycles on both pilot wells to properly advance commercial development

— North Peace Energy is investigating the possibility of adding further wells to the existing pilot facility

— The decision to drill these extra wells will be based on the remaining capacity of the pilot facilities, the economic returns from the wells and obtaining the required regulatory approvals

— Capital has also been allocated to advance the front-end engineering work and the regulatory consent process for a 3,000 bbl/d pilot expansion

— The 3,000 bbl/d expansion is considered to be a more viable option than a 10,000 bbl/d first phase commercial project in the current economic conditions. However, the 3,000 bbl/d option would still require improvements commodity prices

— Vista Projects Limited has been engaged to advance engineering work on a 3,000 bbl/d pilot expansion.