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Press release from CNW Group

CALVALLEY PETROLEUM - YEMEN OPERATIONS UPDATE

Wednesday, March 23, 2011

CALVALLEY PETROLEUM - YEMEN OPERATIONS UPDATE08:42 EDT Wednesday, March 23, 2011CALGARY, March 23 /CNW/ - Calvalley Petroleum Inc. (TSX: CVI.A)Calvalley Petroleum Inc. (Calvalley) is pleased to provide an operational update on the recent activities on  Block 9. We currently have three rigs operating (two drilling and one service) on the block.Due to political developments in Yemen, we have experienced some delays that have impacted the supply of equipment from Sana'a into our area of operations. While we continue to operate all key areas of development, including operation of our production facilities and drilling activities with available materials on hand, transportation logistics have been challenging.Construction of the Truck Offloading Facilities ("TOF") at Block 51, which is 95% complete, continues to face a setback due to transportation challenges. The final component required for the TOF's telecommunication system for the metering system is currently being delayed in Sana'a due to transportation impediments. As an alternative measure, Calvalley is in discussions with the operator of Block 51 regarding the utilization of their existing metering system on a temporary basis. Should this alternative become available, the commissioning of the TOF could be completed within the next two weeks.Due to a recent attack on the export pipeline from Block 18 to the Ras Isa export terminal, Calvalley has stopped shipping oil to Block 18. Production from the Hiswah field continues and the produced crude oil is being stored in tanks at our CPF. We have a spare storage capacity to accommodate for an additional 7 days of production. Based on our experience with similar situations in the past, we expect that the export pipeline will be repaired within a few days. Thus, it is unlikely that a production shut-down will be required. Upon resumption of oil shipments to Block 18, we will transport the cumulative inventory to compensate for lost days.Drilling of the Qarn Qaymah-3 ("QQ-3") appraisal well was completed on March 8, 2011 to a total depth of 4,460 meters including an openhole section of approximately 1,000 meters in the Fractured Granitic Basement ("FGB"). The wellbore image logs and electrical logs indicate that the openhole section encountered a number of fractured sections in the FGB.  On March 9, 2011, Calvalley began testing of QQ-3. Currently the well is undergoing pressure build up. The testing program is expected to be completed in April 2011.Calvalley is currently drilling the Ras Nowmah East-1 ("RNE-1") exploratory well. The well is targeting both Qishn and Saar Formation similar to that of Ras Nowmah Discovery. We expect to complete the well by mid-April 2011. Upon completion of RNE-1, the rig will be mobilized to Ras Nowmah Field to drill two development wells (RN-4 and RN-5).Calvalley is an international oil and gas company, with offices in Calgary, Alberta, Canada, that operates its 50% working interest in Block 9 of the Masila Basin, in The Republic of Yemen. Calvalley also operates its 100% working interest in the Gimbi and Metema Blocks of the Blue Nile Basin, in The Republic of Ethiopia.THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.This press release may contain forward-looking statements including, without limitation, financial and business prospects and financial outlooks, and such statements may be forward-looking statements which reflect management's expectations regarding future plans and intentions, growth, results of operations, performance and business prospects and opportunities. Words such as "may", "will", "should", "could", "anticipate", "believe", "expect", "intend", "plan", "potential", "continue", and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve significant risk and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including, but not limited to, changes in general economic and market conditions and other risk factors. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with these forward-looking statements. Investors should not place undue reliance on forward-looking statements. Forward-looking statements and other information contained herein concerning the oil and gas industry and Calvalley's general expectations concerning this industry are based on estimates prepared by management using data from publicly available industry sources as well as from reserve reports, market research and industry analysis and on assumptions based on data and knowledge of this industry which Calvalley believes to be reasonable. However, this data is inherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While Calvalley is not aware of any misstatements regarding any industry data presented herein, the industry involves risks and uncertainties and is subject to change based on various factors.For further information: investorrelations@calvalleypetroleum.com or +1 (403) 297-0490 Edmund Shimoon, Chairman and CEO Memet Kont, President and COO Zacharie Magnan, Vice-President, Finance and Acting CFO