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Shellbridge Announces Activity Update and Fiscal 2006 Guidance.

RICHMOND, British Columbia -- Shellbridge Oil & Gas, Inc. ("Shellbridge")(TSX:SHB) is pleased to provide an update of its recent operations in southwestern Saskatchewan, northeastern British Columbia and northern Alberta.

Shellbridge's first-ever financial statements of operations and cash flows will cover the stub-year period of 2005-Q4. At the beginning of that period, our daily average production approximated 900 barrels of oil equivalent per day (boe/d) and our targeted exit rate was 1,350 boe/d. We are pleased to announce today that our actual exit rate exceeded 1,500 boe/d, which is approximately 67% higher than start-up production rates.

During 2005-Q4 (fiscal year end December 31, 2005), we drilled or participated in drilling five wells. Of these, two were exploratory and three were development wells. Details relating to these drilling activities by field and province are reported below.

Mantario, S.W. Saskatchewan: During 2005-Q4, one new delineation well was drilled and six standing oil wells were completed, equipped and tied in at Mantario. We also completed expansion of our production capacity through the construction and installation of a heater-treater battery with a planned daily throughput of up to 3,500 barrels of fluid per day, a capacity that is expected to be reached by mid-year 2006.

We currently operate production from sixteen heavy oil wells in the Mantario field, in which we have an estimated weighted average working interest of 64%. One cased horizontal oil well at an average working interest of 75% was completed at year end and is awaiting tie-in. Since year end, we have drilled and completed two more horizontal wells on the property and by the end of 2006-Q2, we expect to drill a total of five new infill and two exploratory wells.

Production of natural gas from two recently-completed wells and solution gas from our new battery is expected to be placed on-stream in the next four weeks.

We will continue to acquire additional seismic coverage in the area.

Cypress/Chowade, N.E. British Columbia: As a result of recent seismic reviews and geological interpretations with partners, we have identified multiple potential exploration and development locations. Our land holdings at Cypress/Chowade total approximately 45,269 gross acres (15,844 net acres) and our seismic database is extensive, containing in excess of 400 kilometers (250 miles) of 2-D seismic data.

Currently, natural gas production from the property approximates 1.0 mmcf per day. Our fiscal 2006 cap-ex budget allows us the opportunity to spend funds on a production optimization project in the latter half of the year.

Orion, N.E. British Columbia: Subject to a farm-in arrangement and rig availability, a third party has committed to earn a 50% interest in two gas spacing units by drilling a test well on a portion of our acreage during 2006-Q2.

We have total land holdings in the Orion area of 66,405 gross acres (46,642 net acres). Approximately 59% of our acreage is owned jointly by Shellbridge (at 50% working interest) and a large independent oil and gas company. The remaining 41% is owned 100% by Shellbridge.

Rigel, N.E. British Columbia: During 2005-Q4, we signed a farm-in agreement to earn a 40% working interest in five-and-a-half sections of land in two prospects by drilling two commitment wells. The first well has been drilled, cased and is currently being tested and drilling of the second well is underway.

Our working interest at Rigel is being earned through the equalization of past land costs and the participation at 50% in the two commitment wells.

Pica, N.W. Alberta: Shellbridge and partners drilled and cased one exploratory well at Pica during 2005-Q4. Our working interest in four sections of land at Pica is 12.5%.

Capital Investment Program and Guidance for Fiscal 2006

Our Board-approved capital investment program for 2006 has been set at $9.0 million. Approximately 37% of our budget is directed toward development drilling (13 wells); 10% exploration drilling (three wells); 40% completions, equipping and facilities; and 13% seismic, land and other. Fifteen wells are targeting either heavy oil or natural gas in the Mantario area and one well is the second commitment well at Rigel previously mentioned.

We anticipate our exit production rate will reach 2,000 boe/d for fiscal 2006, subject to rig availability, drilling successes and the timing of completions and tie-ins. Our corporate average production cost for fiscal 2006 is expected to range from $5 - $6 per boe.

Shellbridge Oil & Gas, Inc. is a Canadian based oil and gas production and exploration company. The Company has a large land position comprised of 195,394 gross acres (98,795 net acres) and owns working interests in development and early-stage exploration properties in southwestern Saskatchewan, northwestern Alberta and northeastern and southwestern British Columbia.

On Behalf of the Board of Directors,

Wayne J. Babcock, President & CEO

Forward-looking statements - the above disclosure may contain statements that are forward-looking in nature. Forward looking statements include all passages containing verbs such as 'aims, anticipates, believes, estimates, expects, hopes, intends, plans, predicts, projects or targets' or nouns corresponding to such verbs. Forward-looking statements in this news release include, without limitation, uncertainty about achievable and sustainable production rates, timing and drilling of tie-ins, success of future locations and drilling. Forward-looking statements are necessarily based upon a number of estimates and assumption that, while considered reasonable by management, are inherently subject to known and unknown risks and uncertainies and other factors referenced in the corporation's continuous disclosure filings.

Shellbridge Oil & Gas, Inc. (TSX:SHB)
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Geographic Code:1CANA
Date:Feb 6, 2006
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