Merrill Lynch Makes $150 Million Equity Investment in Leor Energy.

HOUSTON -- Leor Exploration & Production LLC (Leor), the parent company of Leor Energy L.P., is pleased to announce today that it has closed a $150,000,000 private placement of equity securities with Merrill Lynch PCG, a proprietary investment group within Merrill Lynch & Co., Inc. (NYSE:MER). The equity placement follows the recent announcement that certain of Leor's subsidiaries closed a $150,000,000 three-year senior secured, revolving credit facility with JPMorgan Chase Bank, N.A.

At the conclusion of the transaction, Leor's founders maintain a controlling stake in the company with over 83% of the equity.

"Following so soon after the initiation of an attractive new banking facility with JPMorgan Chase, we are delighted to have Merrill Lynch join Leor as a major equity participant," said Leor's Chairman, Thomas S. Kaplan. "Their decision to invest in Leor closely aligns us with yet another of the finest financial institutions in the world, providing us with not only additional capital, but also an exciting new relationship with a value-added shareholder."

Mr. Kaplan continued, "Our alliance with two premier institutional equity investors, Goldman Sachs (NYSE:GS) and now Merrill Lynch, nicely complements our industrial partnership with EnCana, one of the leading names in natural gas exploration and production worldwide."

"The Company anticipates that these funding sources will provide sufficient capital for Leor's drilling program and operations throughout 2007," said Leor Energy CEO, Guma Aguiar. "Leor expects to use the bulk of the proceeds from this equity transaction to accelerate ongoing development of our company's flagship project in the Amoruso Field, and also to continue our exploratory program in the Deep Bossier trend."

Leor is pleased to thank CPM Group, which acted as the introducing broker on the transaction.

About Leor Energy: Leor Energy, based in Houston, Texas, is one of the fastest-growing privately held oil and gas exploration and production companies in North America. During December, 2006, gas production from its flagship project, the Amoruso Field (field application pending), exceeded 90 MMcf/d gross, up from 7 MMcf/d in April 2006. Leor is an active player in the Deep Bossier trend, one of the most promising recent unconventional gas exploration plays onshore in the U.S. Including its interests in Amoruso Field, which is operated by a subsidiary of EnCana Corp. (NYSE:ECA), Leor Energy holds interests in over 150,000 acres in the Deep Bossier trend. Over the next eighteen months, Leor plans to drill several exploratory wells targeting Deep Bossier sands outside of Amoruso Field. Other companies currently active in the Deep Bossier trend include: Anadarko Petroleum Corp. (NYSE:APC); Chesapeake Energy Corp. (NYSE:CHK); ConocoPhillips (NYSE:COP); and XTO Energy Inc. (NYSE:XTO). For more information on Leor Energy, please visit www.leorenergy.com.