Primary begins drilling on Teton prospect

Primary Petroleum has completed its review of the 3D Seismic data processing and interpretation on its Teton Prospect and has initially selected 12 drilling locations to commence its drilling program.

The Company has contracted FX Drilling Company, Inc. from Oilmont, Montana for an eight well drilling program which is scheduled to commence the week of January 7th, 2008.

The Teton Prospect covers some 97,400 net acres (152 sections) and is offsetting to the Gypsy Basin which has produced over 510,000 barrels of oil from two sections (1280 net acres), to date. The key targets for these multi-zone wells are the Madison oil and Sunburst gas formations. The current royalty rate on Primary’s land in Montana is 12.5%.

The Company would also like to announce that it has amended the exercise price and expiry date of 2,000,000 share purchase warrants which were issued pursuant to a pre-IPO private placement. The original private placement of 2,000,000 shares with 2,000,000 share purchase warrants attached was accepted for filing with the Company’s listing application.

The expiry date of the warrants has been extended by one year from December 31, 2007 to December 31, 2008 and the exercise price has been amended from $1.10 to $1.35. These warrants also contain a forced exercise provision whereby if the closing price of the Company’s shares is $2.00 or greater for a period of 20 consecutive trading days, then the Company may accelerate the expiry date by giving notice that the warrants will expire on the 30th day after such notice.