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CALGARY, May 9, 2008 (Canada NewsWire via COMTEX) -- /NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR

DISSEMINATION IN THE UNITED STATES/

Upper Lake Oil and Gas Ltd. ("Upper Lake" or the "Company") (TSX-UP) today announced its financial and operating results for the first quarter of 2008. The financial statements and management's discussion and analysis for the quarter ended March 31, 2008 will be available on SEDAR at www.sedar.com and by visiting Upper Lake's website at www.upperlake.ca.

Financial and operating highlights for the first quarter of 2008 do not include comparisons because Upper Lake began business on October 12, 2007. The first quarter of 2008 was the Company's first full quarter of operations.

    <<
    Selected financial and operating information

    Production: oil and natural gas liquids (barrels)              333 bbl/d
    Production: natural gas (cubic feet)                         3,801 Mcf/d
    -------------------------------------------------------------------------
    Production: total (barrels of oil equivalent)                  967 boe/d

                                               ($000s)  $/unit of production
                                               -------  --------------------

    Revenue: oil and liquids                     2,351             77.55/bbl
    Revenue: natural gas                         2,851              8.24/Mcf

    Royalties: oil and liquids                    (591)            19.49/bbl
    Royalties: natural gas                        (664)             1.92/Mcf

    Operating expenses                            (820)             9.32/boe

    Field netback                                3,127             35.55/boe

    Funds flow from operations                   2,571             29.23/boe
    Funds flow from operations                            0.10/share diluted

    Capital expenditures                         7,631


    Other Q1 2008 Highlights

    -  Achieved average production of 967 boe/d for the period, an increase
       of 32 percent over the 80-day period ending December 31, 2007 of
       731 boe/d.

    -  Spent $7.6 million on its capital program, highlighted by the
       $3.4 million acquisition of five standing cased wells and 11,666 acres
       (3,867 net) of undeveloped land in the Greater Tupper area of NE
       British Columbia. Upper Lake's undeveloped land now totals 23,000
       acres.

    -  Drilled one (1.0 net) well and completed or re-completed six wells,
       including two wells in the Tupper, British Columbia area.
    >>

Operations

In the first quarter of 2008, Upper Lake participated in two operations in the Tupper area. A Halfway well was drilled and cased. Completion operations commenced just prior to spring break-up. During a short-term test the well achieved an initial rate of approximately 1.0 MMcf/d. A more comprehensive test on the targeted formation is scheduled for July. Upper lake also plans to evaluate two or three shallower horizons in the well.

A Montney re-completion operation was also conducted in a pre-existing wellbore where Upper Lake has a one-third interest. The Montney zone was stimulated with a 100-tonne frac to allow the hydrocarbons to flow more freely into the wellbore. Initial flow rates were approximately 275 Mcf/d as the well continued to clean up. Operations were then suspended as a result of spring break-up.

The Montney and Halfway lands and wellbores are part of the asset base purchased by Upper Lake in the $3.4 million acquisition noted above, which was completed on January 8, 2008. There are no Montney or Halfway reserves included in Upper Lake's December 31, 2007 independent reserve report.

Upper Lake is currently formulating a go-forward strategy relative to its Montney rights in this burgeoning play. Consideration is being given to a number of scenarios in order to maximize value. This could include further development, farm-out, sale or swap or a combination of these options. Decisions in this regard are expected within 90 days.

Ferrybank

Upper Lake's major property at Ferrybank, Alberta continues to perform well, providing the majority of the Company's cash flow and production. Upper Lake's business plan contemplates continued focus on the area. The Company expects to spend the majority of its remaining 2008 capital expenditures in Ferrybank. A number of wells are scheduled to be drilled in the area over the course of 2008. Numerous opportunities are being examined in Ferrybank and west central Alberta.

Outlook

Management of Upper Lake believes the oil and gas cycle has begun to turn positive again. Natural gas prices have been improving and oil prices are solid. Upper Lake also believes it is important to continue to evaluate growth opportunities including acquisitions, mergers, exploitation and grassroots exploration.

Upper Lake is a Calgary-based corporation engaged in the exploration, development and production of oil and natural gas in western Canada. Additional information concerning Upper Lake is available on its website at www.upperlake.ca or on SEDAR at www.sedar.com.

Non-GAAP Financial Measures

This press release includes information concerning "funds flow from operations", which are non-GAAP financial measures that do not have any standardized meaning prescribed by Canadian Generally Accepted Accounting Principles ("GAAP") and are therefore unlikely to be comparable to similar measures presented by other issuers. Management and the directors of Upper Lake believe that "funds flow from continuing operations", "funds flow from operations" and "field netback" provide useful information to investors and management since they are an indicator of the Company's ability to fund future capital expenditures, which drives growth, and to repay debt. Funds flow from continuing operations and funds flow from operations are calculated before changes in non-cash working capital. See the "Reconciliation of Non-GAAP Financial Measures" section of the MD&A for the period ended December 31, 2007 for a reconciliation of funds flow from operations to net earnings from continuing operations, the most comparable measure calculated in accordance with GAAP. Other financial data has been prepared in accordance with GAAP.

Boe

All calculations converting natural gas to a crude oil equivalent have been made using a ratio of six mcf of natural gas to one barrel of crude oil equivalent. A boe may be misleading, particularly if used in isolation. A boe conversion ratio of six mcf of natural gas to one barrel of crude oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Forward Looking Statements

This press release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes. This press release contains forward-looking statements pertaining to the following: forecast capital expenditures, future exploration and development plans, forecast operating costs, general and administration expenses and anticipated production rates and production mix, royalty rates, funds flow from operations and reserves. Statements relating to "reserves" are forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described exist in the quantities predicted or estimated and can profitably be produced in the future.

The forward-looking statements are based on the Upper Lake's current beliefs as well as assumptions made by, and information currently available to, the Upper Lake. Forecast capital expenditures are based on Upper Lake's current budgets and development plans which are subject to change based on commodity prices, market conditions, drilling success, potential timing delays and changes in royalty rates. Additionally, forecast capital expenditures do not include capital required to pursue future acquisitions. Anticipated production and product mix have been estimated based on the proposed drilling program with a success rate based upon historical drilling success and an evaluation of the particular wells to be drilled. Operating costs and general and administration expenses have been projected based on historical information and anticipated increases in the cost of equipment and services. Funds flow from operations are based on the Upper Lake's current budget and development plans. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward-looking statements will not be achieved. Undue reliance should not be placed on forward-looking statements, as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in the forward-looking statements. These factors may be found under the heading "Risk Factors" in the Annual Information Form for the year ended December 31, 2007. Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive.

The forward-looking statements contained in this press release are made as of the date hereof and Upper Lake does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

SOURCE: Upper Lake Oil and Gas Ltd.

Kelly J. Ogle, President and Chief Executive Officer, kogle@upperlake.ca; Upper Lake
Oil and Gas Ltd., 1200, 111 - 5th Avenue SW, Calgary, AB, T2P 3Y6, Phone: (403)
237-9141, Fax: (403) 237-9140, www.upperlake.ca

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