Exploration and Development Update Echo Energy Canada Inc. 'Formerly, Pifher Resources Inc.'/Echo Energy Inc.

TORONTO -- As of December 31, 2003, Echo Energy Inc. ("Echo") had drilled 40 Thorold gas wells in Bayham Township, Elgin County, and Echo Energy Canada Inc. ("Echo Canada") had drilled 19 Thorold gas wells and purchased 3 existing gas wells in Houghton Township, Norfolk County. As of that date, none of the wells were onstream and producing, however a gathering and compression system had been designed, with construction to start this spring. The gathering and sales system plans consisted of 3 sales points for the combined Echo and Echo Canada gas; sales through the Talisman Energy operated Lakeview Compressor, sales through the Union Gas system near the village of Maybees Corners, and sales through the Union Gas system just east of the city of Tillsonburg. Please see public filings from Echo Canada's 2003 year end for reserves and cash flow evaluations of Echo Canada's reserves in the area. This press release is prepared to give shareholders an update of the current status of construction, and anticipated timing for full field production.

Construction of the Talisman Lakeview gathering system and the main gathering, compression, and sales line systems has been ongoing over many months. The status of the various sections of the system is listed below:

1) Gas deliveries through the Talisman Lakeview compressor station commenced on June 24, 2004. Initially 5 Echo gas wells were brought on stream. Since that time, an additional 2 wells commenced production. Deliveries to the Talisman compressor station have varied from 500 to 550 Mcfd (14.2 to 15.6 10(3)m(3)/D), with all Echo gas handled by the sweet compressor at Lakeview. Production is being held back on the Echo wells currently onstream due to limited capacity through the sweet compressor at Lakeview. Additional capacity of up to 5 MMcfd (142 10(3)m(3)/D) is available through the sour gas side of the compressor station at a higher processing and gathering fee. Once additional gathering system sections are constructed and small modifications are completed by Talisman within their station, more gas will be delivered through Lakeview to lessen the load on the main compressor station.

2) The north part of the main gathering system is constructed and is being purged to natural gas. Until the compressor station, sales line, and Union meter stations are commissioned, gas from wells tied into the north part of the main system will flow through an interconnect to the Talisman Lakeview system.

3) Wellsite facility construction is ongoing. Most wells on the north part of the gathering system and all wells on the Talisman Lakeview part of the system have been finished.

4) Construction of the steel high pressure sales line from the compressor station to the Maybees and Tillsonburg meter sites has been completed. The compressor station to Maybees section is finished and was pressure tested last week. This part of the sales line can be purged to natural gas at any time.

5) Construction at the compressor station is nearly completed. All major pieces of equipment are onsite all equipment has been connected. The building has been erected around the compressor. An office trailer is in position onsite, with a second shop trailer expected to be delivered shortly. The 2 inlet 6" plastic lines are installed, and the 4" steel sales line is ready.

6) Union Gas has designed both the Maybees and Tillsonburg metering stations. The Tillsonburg site has been prepared, the odorant equipment building is in place, and meter station piping installation will commence next week. The short sales line section from the Tillsonburg meter station to the connection into Union Gas' high pressure 8" steel line has been completed. The Maybees meter station site preparation is ongoing. Since this station will handle smaller gas sale volumes, odorant injection is not required, which allows for a much more compact meter station. Union Gas expects to have this meter station constructed by late-October.

7) Construction is commencing on the south part of the gathering system.

Drilling and fracing have been curtailed this year, to allow for the intensive capital costs required to construct the gathering, compression, and sales systems. Since the year end reserves reports were prepared for both companies, 10 Echo gas wells have been drilled and 6 Echo existing gas wells have been fraced. No new Echo Canada wells were drilled and no existing Echo Canada wells were fraced since January 1, 2004. A more aggressive drilling and fracing schedule will commence once the north part of the main system commences production.

To date, all gas deliveries through the Talisman Lakeview compressor station have been stored using the Union Gas storage system in southwestern Ontario. The storage purchased by Echo and Echo Canada allows the companies to store gas on an ongoing basis, with restrictions on maximum storage volumes and the rates at which gas can be put in or removed from the storage account. Echo began selling gas from this storage account in September.

All gathering system, compressor station, and sales lines have been built by Pecho Pipelines Inc. ("Pecho"), a 50:50 joint venture between Echo and Echo Canada. Pecho will charge a processing and gathering fee to Echo and Echo Canada for the use of this system. All capital cost allowance pools associated with surface facilities will stay within Pecho and all gathering system and compression operating costs will be paid by Pecho. The processing and gathering fee to be charged by Pecho for using the main system is expected to be no more than $0.65/Mcf, and will be determined once all construction costs are tabulated. This fee will be calculated using a JP95 schedule with actual capital costs and estimates of operating costs and throughputs. A smaller fee of $0.10/Mcf will be charged to gas being delivered through the Talisman Lakeview compressor station for the use of Pecho's gathering system. Talisman is currently charging a processing and gathering fee of $0.56/Mcf for gas volumes using the sweet compressor system. As discussed earlier, the Talisman fee will be higher for volumes using the sour compressor system.

The reserves and cash flow evaluations presented in the December 31, 2003 year end reports are still accurate except for the changes associated with the 7 wells onstream through the Talisman Lakeview station. A reserves report update entitled "Echo Energy Inc. Reserves and Cash Flow Update as of July 20, 2004" was prepared by Jim McIntosh Petroleum Engineering Ltd to re-evaluate these wells. The tables and text below are taken from this reserves report.

The table below summarizes the results of the evaluations of these 7
producing wells using forecasted gas prices and operating costs on a
before tax basis.

Reserves      Company Res    Net Present Worth Before Taxes
Category                       0%      8%    10%  12.5%    15%    20%
              Gross   Net    Disc    Disc   Disc   Disc   Disc   Disc
              (BCF) (BCF)    ($k)    ($k)   ($k)   ($k)   ($k)   ($k)
Proven
 Developed
 Producing    5.11  4.80 $35,070 $11,473 $9,806 $8,330 $7,262  $5,803


The table below summarizes the results of this evaluation using
constant gas prices and operating costs on a before tax basis.


Reserves            Company Res      Net Present Worth Before Taxes
Category                               0%       10%      15%      20%
                    Gross     Net    Disc      Disc     Disc     Disc
                    (BCF)   (BCF)    ($k)      ($k)     ($k)     ($k)
Proven
 Developed
 Producing          5.11   4.980 $40,720   $12,505   $9,222    $7,290


The table below summarizes the results of the evaluations of these 7
producing wells using forecasted gas prices and operating costs on an
after tax basis.

Reserves        Company Res   Net Present Worth After Taxes
Category                        0%     8%    10%  12.5%    15%    20%
                Gross   Net   Disc   Disc   Disc   Disc   Disc   Disc
                (BCF) (BCF)   ($k)   ($k)   ($k)   ($k)   ($k)   ($k)
Proven
 Developed
 Producing      5.11  4.80 $22,097 $7,712 $6,667 $5,731 $5,046 $4,095


The table below summarizes the results of this evaluation using
constant gas prices and operating costs on an after tax basis.

Reserves             Company Res     Net Present Worth After Taxes
Category                               0%        10%      15%     20%
                     Gross    Net    Disc       Disc     Disc    Disc
                     (BCF)  (BCF)    ($k)       ($k)     ($k)    ($k)
Proven
 Developed
 Producing           5.11  4.980  $26,310     $8,499   $6,365  $5,092

The net cash flow values in this Proved Developed Producing evaluation include an estimate of all costs necessary to produce natural gas from these 7 wells, including well abandonment costs. The capital costs expended to drill, complete, and equip the wells are not included in the net cash flows, however, the tax pools generated by some of these capital costs have been used in calculating the after tax evaluations. The gathering system is constructed by Pecho, so no capital cost pools are included for this gathering system. A gathering fee has been included in the economic analysis to cover costs to use this gathering system.

This evaluation may not necessarily represent the fair market value of the natural gas reserves of Echo Energy Inc.

Statements in this news release that are not historical facts, including statements about plans and expectations regarding properties, reserves, transactions and opportunities, capital resources and future financial results are forward-looking. Forward-looking statements involve risks and uncertainties which may cause the company's actual results in future periods to differ materially from those expressed. These uncertainties and risks include changing gas and commodity prices and currency exchange rates, demand for gas, lack of success of future exploration and development, competition and other factors discussed from time to time in the company's filings with the Ontario Securities Commission.

Listing: TSX Venture Exchange, symbol "EEI"

Issued Capital: 51,201,915 Common Shares (Post-Split)

Neither the TSX Venture Exchange nor any securities regulatory authority has approved or disapproved of this news release.

Echo Energy Canada Inc. (TSX VENTURE:EEI)