Storm Cat Energy Corporation Updates Operations

Storm Cat Energy Corporation updated operations.

Powder River Basin

At December 31 2006, Storm Cat had operational control of approximately 41,730 gross acres and 31,905 net acres in the Powder River Basin (PRB). The Company now operates 277 wells in the PRB and owns a working interest percentage in 41 additional non-operated wells. For the full year 2006, 86 wells were spud, in line with previous guidance issued for the Company’s 2006 PRB drilling program. Wells drilled during 2006 were concentrated in Storm Cat’s Northeast Spotted Horse and Jamison/Twenty Mile operating areas. Currently four rigs are operating in the Recluse and Sheridan areas as part of Storm Cat’s aggressive 2007 PRB drilling program.

At year-end 2006, PRB exit-rate production was 15 million cubic feet of natural gas per day (MMcf/d) gross and 8 MMcf/d net. PRB gas production currently comprises 100% of the Company’s production.

Fayetteville Shale, Arkansas

In the Arkoma Basin’s Fayetteville Shale play, Storm Cat owns or controls 20,051 gross and 13,982 net acres at December 31, 2006. The Company plans to commence drilling on the first of six net wells in the Fayetteville Shale beginning mid-year. Well locations have been identified and permitting and regulatory work is in the process of being completed. Pipeline planning is in process with rights of way and access points identified. The Company is currently negotiating and securing drilling and vendor services.

Storm Cat currently is also participating in 14 Fayetteville Shale wells where it owns between a 1% to 8% working interest. These wells are at varying stages of drilling, completion or production. Southwestern Energy, the recognized technical leader in the Fayetteville Shale, will operate the properties. The Company will apply the knowledge gained by participating in these wells to its operated acreage and drilling program in Fayetteville Shale.

Elk Valley, British Columbia

Storm Cat recently completed the five wells that were drilled in the third quarter of 2006. Twenty-four frac’s were successfully performed in multiple zones in each well. The Company used a variety of fracing technologies to determine which methods are best suited for the completion of these coals. The wells are currently on production and have begun the de-watering stage. Storm Cat expects to have preliminary production results from these wells during the second half of 2007.

Storm Cat is determined to prove the economic viability of the play in 2007 and connect production into an existing pipeline system six miles from the gathering station. Right-of-ways to the pipeline have been secured.

Alberta Projects

In the Western Canadian Sedimentary Basin of Alberta, Storm Cat owns or controls approximately 22,560 gross and 19,680 net acres at December 31, 2006. For the full-year 2006, the Company drilled and completed five wells of which two were drilled on company lands at no cost to Storm Cat. Encouraging results from wells targeting both the Horseshoe Canyon and Mannville Coals will lead to further drilling activities in several areas of Alberta in 2007.

J. Scott Zimmerman, President and Chief Executive officer, said: “2006 was a milestone year for Storm Cat Energy. We enhanced our position in our four core operating areas, and grew production and reserves three-fold. The PRB saw substantial production and reserve growth and will continue to be an area of focus, with more than two years of drilling locations remaining. We expanded our portfolio with our acreage acquisitions in the PRB and emerging Fayetteville Shale. Plans are to begin drilling on our acreage in the second half of this year. In Elk Valley we drilled and completed five wells successfully and are currently placing the wells on initial test. We look forward to sharing the results from Elk Valley late this year. Finally, we have drilled five wells in central Alberta and continue to explore exploitation opportunities. With our 2006 accomplishments, Storm Cat is well positioned for growth in 2007, growing our proven reserve base, production and cash flow while increasing shareholder value.”

About Storm Cat Energy

Storm Cat Energy is an independent oil and gas company focused on the pursuit, exploration and development of large unconventional gas reserves from fractured shales, coal beds and tight sand formations. The Company has producing properties in Wyoming’s Powder River Basin, exploitation and development acreage in Canada and Alaska. The Company’s shares trade on the American Stock Exchange under the symbol “SCU” and in Canada on the Toronto Stock Exchange under the symbol “SME.”

Forward-looking Statements

This press release contains certain “forward-looking statements”, as defined in the United States Private Securities Litigation Reform Act of 1995 relating to matters such as the Company’s drilling and other exploration plans and projected well economics. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur. Forward-looking statements are based on the beliefs, estimates and opinions of Storm Cat’s management on the date the statements are made; including production and reserve estimates, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Storm Cat undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include, but are not limited to receipt of necessary approval from regulatory bodies, the volatility of natural gas prices, the possibility that exploration efforts will not yield economically recoverable quantities of gas, accidents and other risks associated with gas exploration and development operations, the risk that the Company will encounter unanticipated geological factors, the Company’s need for and ability to obtain additional financing, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration and development plans, and the other risk factors discussed in greater detail in the Company’s various filings on SEDAR (www.sedar.com) with Canadian securities regulators and its filings with the U.S. Securities and Exchange Commission, including the Company’s Form 20-F/A for the fiscal year ended December 31, 2005.

NO STOCK EXCHANGE HAS REVIEWED OR ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.

Contact:

Storm Cat Energy Corporation Director, Investor Relations

William Kent, 303-991-5070

Source: Storm Cat Energy Corporation