Bow Valley Energy Ltd. announces first oil production from Chestnut field development, U.K. North Sea

Bow Valley Energy Ltd. (TSX - BVX) is pleased to announce that the Chestnut field in the U.K. North Sea commenced oil production on September 20, 2008. Bow Valley Petroleum (UK) Limited, a wholly-owned subsidiary of Bow Valley Energy Ltd., owns a 15.125% working interest in Block 22/2a which contains the Chestnut field.

The Chestnut field is located approximately 180 miles east of Aberdeen in water depth of approximately 120m. Chestnut has been developed using the new Sevan Hummingbird floating production storage and offloading unit ('FPSO'). The Sevan Hummingbird FPSO has a capacity to store 270,000 bbls. of oil, an oil processing capacity of 30,000 barrels of oil per day and a water injection capacity of 20,000 barrels per day.

The joint venture group has developed the field with one horizontal oil production well and one vertical water injection well. Initial production volumes are expected to average approximately 10,000 (1,500 net) barrels of oil per day. The joint venture group is also currently drilling an additional appraisal/development well, which if successful, will add to the field's productive capacity and booked reserves.

Chestnut oil sales volumes will be offloaded and transported by shuttle tanker.

R.G. Moffat, President and CEO of Bow Valley, said: "We are pleased to have reached this very important milestone for the Company. The Chestnut field development represents the fourth such project that Bow Valley has successfully completed in the UK North Sea. The Chestnut field development, combined with our other producing properties at Kyle, Blane and Enoch will result in a significant increase in production, revenue and cash flow. Additional production is also forecast from the field development at Ettrick, and two pre-sanction field developments at Peik and Blackbird. The success at Chestnut is further confirmation of our business plan and ability to execute on all of our ambitious projects."

Bow Valley Energy Ltd. is an international oil and natural gas exploration, development and production company with operations in the U.K. sector of the North Sea and Alaska. The common shares of the Company trade on the Toronto Stock Exchange under the symbol BVX.

Certain statements included or incorporated by reference in this news release constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project", "seek", "continue", "forecast", "may", "will", "potential", "could", "should" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements or information in this news release include, but are not limited to, statements or information with respect to: business strategy and objectives; development plans; exploration plans; acquisition and disposition plans and the timing thereof; reserve quantities and the discounted present value of future net cash flows from such reserves; future production levels; capital expenditures; net revenue; operating and other costs; royalty rates and taxes.

Forward-looking statements or information are based on a number of factors and assumptions that have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this news release, assumptions have been made regarding, among other things: the effects of increasing competition; the general stability of the economic and political environment in which the Company operates; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost-efficient manner; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manner; the ability of the Company to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development or exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the countries in which the Company operates; and the ability of the Company to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used.

Forward-looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking statements or information. These risks and uncertainties which may cause actual results to differ materially from the forward-looking statements or information include, among other things: the ability of management to execute its business plan; general economic and business conditions; the risk of war or instability affecting countries in which the Company operates; the risks of the oil and natural gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas; market demand; the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; risks and uncertainties involving geology of oil and natural gas deposits; the uncertainty of reserves estimates and reserves life; the ability of the Company to add production and reserves through acquisition, development and exploration activities; the Company's ability to enter into or renew leases; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to production (including decline rates), costs and expenses; fluctuations in oil and natural gas prices, foreign currency, exchange, and interest rates; risks inherent in the Company's marketing operations, including credit risk; uncertainty in amounts and timing of royalty payments; health, safety and environmental risks; risks associated with existing and potential future law suits and regulatory actions against the Company; uncertainties as to the availability and cost of financing; and financial risks affecting the value of the Company's investments. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties. Additional risk factors affecting the Company and its business are contained in the Company's Annual Information Form filed on SEDAR at www.sedar.com.

The forward-looking statements or information contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise unless required by applicable securities laws. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.

Where amounts are expressed on a barrel of oil equivalent (boe) basis, natural gas volumes have been converted to barrels of oil equivalent at six thousand cubic feet to one barrel of oil equivalent (6 mcf = 1 boe). This conversion ratio is the conversion used in the oil and natural gas industry and is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The use of boe's may be misleading, particularly if used in isolation.

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SOURCE: Bow Valley Energy Ltd.

Bow Valley Energy Ltd., Robert G. Moffat, President and Chief Executive Officer, Phone (403) 232-0292, website: www.bvenergy.com