Breaker Energy Ltd. announces increases in production and cash flow guidance and light oil drilling

Breaker Energy Ltd. ("Breaker" or "Company")(TSX: WAV.A and WAV.B) plans to accelerate development of its numerous lightoil opportunities due to drilling success and low debt levels. Breaker willnow invest an additional $35 million in 2008, focused on new drilling at itsthree light oil growth properties, its deep Devonian exploration play inBritish Columbia, and a new horizontal multifrac gas resource play at Provost.

Breaker's 2008 capital budget forecast is now $105 million, increasedfrom $70 million. Of the $35 million increase, $25 million is allocated toprojects that add production in 2008, with the balance devoted to longer termprojects. This will result in an increased forecast exit rate of 6,900 boe/d,up from the previous estimate of 6,200 boe/d. Breaker now estimates its 2008full year average production will be 6,000 boe/d. Cash flow is stronger as aresult of higher commodity prices with forecast 2008 annual cash flowincreasing to $98 million from $66 million. Breaker's bank line is currently$95 million and management forecasts a conservative level of leverage atyear-end with net debt of $58 million and a net debt to annualized fourthquarter 2008 cash flow ratio of 0.5. Based on fourth quarter forecastproduction and strip pricing as of mid-June 2008, annualized fourth quartercash flow could exceed $150 million.

Irricana

Breaker has realized and maintained significant light oil productionincreases from drilling in the large original oil-in-place pool at Irricana.Initial rates from new drills have been steadily increasing with time andexperience with horizontal drilling and multi-frac completions, particularlyin areas proximal to historical poor producers. The most recent drills broughtonstream just prior to break-up exceeded rates of 700 boe/d, and are stillproducing at levels comparable to historical best producers before Breakerinitiated the multi-frac completions program. The property has maintainedproduction in excess of 2,800 boe/d for the past three months, an indicationof the strength and stability of the ten new wells.

As a result of the significant success of the drilling program, Breakeris increasing the Irricana 2008 budget by $11.4 million to a total of$45 million. Of this extra capital, $7.5 million will allow Breaker to drillan additional two horizontal light oil wells and one additional exploratoryPekisko gas well. The remaining $2.0 million will be used to expand theproduction infrastructure. The main oil gathering line to the central batterywill be looped to alleviate rising pipeline pressures caused by increasedproduction volumes, thus lowering the back pressure on the existing producersto increase total field production. A waterflood injection pilot will also beinitiated to test the viability of waterflooding, potentially increasing theoil recovery substantially.

In total, Breaker plans to drill 6 more light oil horizontals, 2exploratory Pekisko wells, and conduct one Mannville gas recompletion duringthe balance of 2008. This program will capitalize on the success of themulti-frac horizontal oil wells, and set up potential gas development programsto take advantage of stronger gas prices. In addition to the expanded drillingprogram, the investment in company owned and operated infrastructure willensure that the full production potential of the new drills and existingproducers can be realized.

Girouxville

At Girouxville, Breaker is doubling the 2008 budget to a total of$13.6 million, allowing the Company to capitalize on its large inventory ofdeep light oil exploratory prospects that qualify for the $1 million maximumroyalty holiday. Four gross (2 net) additional wells with multi-zone targetssupported by joint proprietary 3D seismic will be drilled in the thirdquarter. Breaker has recently demonstrated a 100 percent success rate onsimilar targets, and should enjoy initial netbacks near $130/bbl based oncurrent oil prices. Additional operated wells at varying working interests andincreased seismic acquisition are also planned.

East Prairie

At East Prairie, performance of the wells drilled during the winterprogram has remained strong. Production from the property during the pastthree months has remained above 1,200 boe/d net to the Company, of which325 boe/d is light sweet oil. Subsequent to the ERCB approval for an EnhancedRecovery Scheme granted on May 2nd, Breaker received a Holding dispositionfrom the ERCB on May 23rd which allows for 2 wells per quarter section to bedrilled on the lands encompassing the waterflood area of the Viking light oilpool. Progress on this waterflood project has accelerated with full operationnow expected by the end of September 2008. Independent reserve evaluatorsestimate that oil recoveries will double with the implementation of awaterflood.

As a result of the downspacing approval and strong performance of theViking oil producers, Breaker has expanded its capital program by $1.9 millionfor 2 gross (1.5 net) additional wells during the third quarter of 2008. Intotal Breaker plans to drill 3 gross (2.25 net) additional wells during thesummer. The Company is well positioned for further infill drilling immediatelyafter a 3D seismic program planned for the winter of 2008/2009.

Southeast Alberta

With the increase in natural gas prices, as well as the continued strongoil price, Breaker plans to be very active in the area for the remainder of2008. The capital budget has been expanded by $8.0 million to a total of$21.4 million, with approximately $20 million of that remaining to be spent.With a sizeable land base and large inventory of low risk drilling locations,Breaker is well positioned in the area to further capitalize on the strongcommodity prices.

At Medicine Hat, Breaker has commenced drilling a 4 well program tofurther delineate a regionally extensive gas charged sand. The Company has adrilling inventory of more than 50 defined locations in the area.

At Provost, Breaker has commenced water injection into its sizeablemedium gravity oil pool and is nearing commencement on its innovative enhancedrecovery scheme at its large heavy oil pool. The summer drilling program willinclude seventeen wells, with an equal split between oil and natural gastargets. The Company plans to apply the multifrac technology being used inIrricana to its first horizontal well in the Viking sand. If successful, thistechnology could offer a very attractive means of recovering the large gas andoil in place in the regionally extensive Viking sand. Breaker will alsorecomplete 6 gross wells and tie in 8 gross standing gas wells.

Monias

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Breaker has completed processing and interpretation of its newly-shot20 square mile proprietary 3D seismic program at Monias, British Columbia,where the company is pursuing a deep Devonian reef play with a potentialtarget size of 1 TCF (unrisked). Breaker is now budgeting a 100 percentworking interest operation to re-enter the original well and drilldirectionally to a new target defined by the seismic program. Subject toweather, licensing and rig availability, the company is planning this drillingactivity for fall or early winter of this year, with no production scheduledin the current outlook.

Upward Revision to 2008 Guidance

Breaker plans its most active year ever in 2008 with total capitalinvestment of $105 million. Four drilling rigs are currently working onBreaker properties; two at Irricana, one at Girouxville and one at MedicineHat. Breaker's revised 2008 guidance is as follows:

Average Production Rate 6,000 boe/d Exit Production Rate 6,900 boe/d Cash flow $98 million Cash flow per A share $2.70 Field Net Back $48.39/boe Capital Program $105 million Year-End Debt $58 million Authorized Bank Line $95 million Unused Bank Line Capacity $37 million Q4 Annualized Debt to Cash Flow 0.5 times
The above guidance assumes US$105.00/Bbl WTI, CDN$9.50/mcf AECO andUS$/CDN$1.00 for 2008.
The capital program will be allocated by area as follows:
-------------------------------------------------------------------------Area Gross Wells Net Wells Net Capital ($)-------------------------------------------------------------------------Irricana 15 15.0 45.0-------------------------------------------------------------------------Girouxville 9 4.1 13.6-------------------------------------------------------------------------East Prairie 7 5.8 6.5-------------------------------------------------------------------------SE AB 22 20.5 21.4-------------------------------------------------------------------------Monias/Widewater 1 1.0 4.5-------------------------------------------------------------------------Other - - 14.0-------------------------------------------------------------------------Total 54 46.4 105.0-------------------------------------------------------------------------

Breaker Energy Ltd. is a junior oil and gas company focused on creatingshareholder value by growing per share production and reserves throughacquisitions and a focused exploration, development and exploitation plan.

Breaker has 36,414,737 Class A shares and 900,000 Class B sharesoutstanding.

Breaker Energy trades on the TSX under the symbols WAV.A and WAV.B.

Forward-Looking Statements

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This press release contains forward-looking statements concerning theCompany's expectations of future production, cash flow, earnings and expansionof its oil and gas property interests and concerning the Company's explorationand development drilling, seismic operations, regulatory applications, payoutestimates, capital expenditures, number of drilling locations, seismicacquisitions and facility upgrades. These statements are based on currentexpectations that involve a number of risks and uncertainties, which couldcause actual results to differ from those anticipated. These risks include,but are not limited to: the risks associated with the oil and gas industry(e.g., operational risks in development, exploration and production; delays orchanges in plans with respect to exploration or development projects orcapital expenditures; the uncertainty of reserve estimates; the uncertainty ofestimates and projections relating to production, costs and expenses, andhealth, safety and environmental risks), acquisitions, commodity price, priceand exchange rate fluctuation and uncertainties resulting from competitionfrom other producers and ability to access sufficient capital from internaland external sources. Additional information on these and other risk factorsthat could affect the Company's operations and/or financial results areincluded in the Company's reports on file with Canadian securities regulatoryauthorities.

The forward-looking statements or information contained in this newsrelease are made as of the date hereof and the Company undertakes noobligation to update publicly or revise any forward-looking statements orinformation, whether as a result of new information, future events orotherwise, unless so required by applicable securities laws.

Oil and Gas Advisory

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This press release contains disclosure expressed as "boe/d". Boe meansbarrel of oil equivalent and boe/d means boe per day. All oil and natural gasequivalency volumes have been derived using the ratio of 6,000 cubic feet ofnatural gas to 1 barrel of oil. Boe equivalency measures may be misleading,particularly if used in isolation. A conversion ratio of 6,000 cubic feet ofnatural gas to 1 barrel of oil is based on an energy equivalency conversionmethod primarily applicable at the burner tip and does not represent a valueequivalency at the well head.

In this press release: (i) mmboe means million boe; (ii) boe/d means boeper day; (iii) bbls/d means barrels per day; (iv) mcf means thousand cubicfeet; (v) mmcf means million cubic feet; (vi) mcf/d means thousand cubic feetper day; and (vii) mmcf/d means million cubic feet per day.

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Breaker Energy Ltd. announces increases in production and cash flow guidance and light oil drilling