Source Petroleum and Fuel-x International Inc. Sign Definitive Agreement.

CALGARY, Alberta -- Source Petroleum, Inc. (OTC:SOPO) ("Source" or the "Company") and Fuel-x International Inc. ("Fuel-x") (collectively "the Parties") are pleased to announce the Parties have executed a definitive agreement as of January 18, 2007 for a Plan of Arrangement (the "Arrangement") whereby Source would acquire all of the assets of Fuel-x International Inc. for consideration to be satisfied in common shares at a predetermined ratio. The Arrangement will be conducted under the provisions of the Business Corporations Act (Alberta) whereby Source and Fuel-x will be amalgamated and continue as one corporation expected to be named Source Petroleum Exploration Inc. ("SPE"). The transaction will be subject to a number of conditions precedent, including certain escrow provisions for insiders of the Parties and approval from both the Source and Fuel-x shareholders, as well as regulatory and court approval.

ARRANGEMENT:

Upon completion of the Arrangement, there will be 110,129,135 common shares of SPE issued and outstanding and no debt, subject to any new financings undertaken before that time. The former Source shareholders would hold a total of 70,845,827 of the SPE common shares, having received one SPE common share for each Source common share issued and outstanding. The former Fuel-x shareholders would hold a total of 24,242,242 of the SPE common shares, having received 0.50128 of a SPE common share for each Fuel-x common share issued and outstanding. In addition, holders of the existing CDN $ 11.7 million convertible debentures in Fuel-x would fully convert into equity to hold a total of 11,747,402 of the SPE common shares based on each CDN $1.00 of principal amount of outstanding Fuel-x Series A Debenture being exchanged into 0.99808 of a SPE common share, while Fuel-x's senior lender has agreed to convert an amount of CDN $3.3 million outstanding on Fuel-x's term loan into 3,293,664 of the SPE common shares at similar terms to the convertible debenture holders.

An information circular outlining in detail the terms of the Arrangement will be distributed to each group of shareholders for their approval at special meetings after Source has completed necessary regulatory filings with the SEC and the Arrangement has received initial court approval in Alberta. It is expected the information circular will be mailed in early April and that the Arrangement would be completed by April/ May 2007.

ESCROW:

The voluntary escrow agreements to be established as part of the definitive agreement would apply to up to 44,010,240 of the issued and outstanding common shares of SPE.

BOARD OF DIRECTORS

The initial board of SPE will consist of four members of the Board of Fuel-x, plus an additional person to be identified. Current members of the Fuel-x Board are Said Arrata (ex-Chairman and CEO of Centurion Energy), Ron Nelson (ex-VP Finance of Weyerhaeuser Canada and Hurricane Hydrocarbons), Mike Shaikh (co-founder of Provident Energy Trust) and Andre Arrata (Chairman and CEO of Fuel-x).

"Source believes the acquisition will provide critical mass and tremendous growth potential, both domestically and internationally for all shareholders," stated Sam Charanek, CEO of Source. "The resulting company will have key management and board personnel with extensive oil and gas experience with large international companies. Management and Board also bring public company experience, start-up oil and gas experience, and decades of industry expertise domestically and internationally."

Andre Arrata, CEO of Fuel-x stated, "the combination of Source and Fuel-x will create an entity which holds assets which have current production and cashflow, offers potential near term production growth from several of the assets, and provides an asset mix which diversifies oil and gas risk as well as geopolitical risk. Our exploration acreage also offers significant growth potential for the future. SPE will continue to carry out business development which focuses on high impact international assets and would like to enter a new core area within the next 12-18 months."

BACKGROUND ON FUEL-X

Fuel-x International Inc., headquartered in Calgary, Alberta, Canada is a private junior international oil and gas exploration and production company founded in April 2005. Fuel-x has successfully raised in excess of CDN $45 million since inception with the proceeds used to acquire current production, development and exploration assets in South East Asia. Fuel-x owns a 30% working interest in the Tungkal PSC located onshore Sumatra, Indonesia which is currently on production and a 50% working interest in the Sebuku PSC located offshore Makassar Straits, Indonesia which contains a gas discovery with independently certified contingent P50 resources of 134.9 Bcf net to Fuel-x. Company management and directors have significant experience in international oil and gas activities in over 80 countries.

BACKGROUND ON SOURCE

Source Petroleum Inc. is currently domiciled as a Nevada Corporation and is a publicly traded entity on the Over the Counter Bulletin Board in the USA under the symbol SOPO. The company holds a 37% working interest in the Woking gas project (TWP 75-4-W6M) in central Alberta and has entered into a farm-in of a 50% working interest in the Harmon Valley area (TWP 83-19-W5M block) in the Peace River heavy oil district of Alberta.

Except for the historical and present factual information contained herein, the matters set forth in this release include statements of management's current expectations. Statements identified by words such as "expects," "projects," "plans," "believes," "estimates," "may" and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, include the statement that we believe the Arrangement will provide critical mass and tremendous growth potential, that SPE offers excellent near term production growth from several of the assets, that SPE's exploration acreage offers significant growth potential for the future, are subject to risks and uncertainties that may cause actual results to differ materially, including the possibility that the historical data may be inaccurate or misinterpreted, the anticipated benefits from our operations cannot be fully realized, the possibility that commodity prices, costs or difficulties related to the conduct of its business will be greater or lesser than expected, and the impact of competition and other risk factors relating to our industry will be greater than expected, all as detailed from time to time in the company's reports filed with the SEC. The company disclaims any responsibility to update these forward-looking statements.