Drilling Update On Texola Energy's Chinchaga Well #1, Alberta, Canada

Vancouver, BC - Texola Energy Corp. announced that as of 08:00 hours on December 31, 2006 drilling had reached a depth of 1378 meters on the Company's Chinchaga #1 well (8-24-95-8W6). The progress was 189 meters for the 24 hour period. The target is at 2700 meters, according to the company.

Chinchaga, Alberta is known for some of North America's most prolific gas fields, the most prominent being the 450 BCF Cranberry field, the 430 BCF Hamburg field and more recently the 450 BCF Ladyfern field. These fields all produce from the upper Devonian Slave Point formation where the leached and fractured limestone provides a highly permeable and porous reservoir capable of producing more than 50 million cubic feet of gas per day during their first year of production. The entire Slave Point formation in north-central Alberta and British Columbia is estimated to contain 7 TCF gas in place.

The high carbonate content of the off-bank strata at Ladyfern previously made seismic imaging of the Slave Point formation in similar areas virtually impossible prior to the 1990s. Since then, advances in 3D seismic, reprocessing of data and a new understanding of the area's characteristics have opened a window of opportunity in the less densely drilled areas to the south of three previously mentioned gas fields.

According to Texola Energy, Chinchaga is a very high quality prospect which was generated by Suncor Energy Inc. after a careful evaluation of geologic studies including sample work of virtually all offsetting wells, seismic modeling, reprocessing and reinterpretation, combined with a 3D seismic survey covering the leases.

SOURCE: Texola Energy Corp.