Capco Energy Releases Information and Updates on Current Operations

Market Wire, April, 2007

Capco Energy, Inc. (PINKSHEETS: CGYN) ("Capco") is an E&P company with operations focused in the Gulf of Mexico ("GOM").

Capco commenced its offshore operations in December 2003 after the acquisition of the Brazos 440 field in Texas state waters in GOM. Since then Capco has continued to acquire additional properties in GOM. The most recent acquisition, in September 2006, was for a contracted acquisition cost of $83.0 million, consisting of 17 wells which were producing about 17.0 mmcfde at the time of the acquisition. The acquisition was funded by equity raised via third party partners, production credits from operations and bank debt from Union Bank of California.

As of April 2007, Capco is the operator of 46 wells in GOM with an additional 32 wells to be added by May 2007. The current level of production from such operations is 19.5 mmcfd and 2600 bopd, all being produced from only 23 wells. Capco's net working interest share is 7.25 mmcfde of which 4.50 mmcfde is contributed from operated interests and 2.75 mmcfde is contributed from non-operated interests. Capco's strategy is to return selected wells to production in the next three years with the remaining wells to be plugged at an opportune time.

Capco's estimated PV 10 discounted proved reserves as of year end 2006 are $29.0 million. Capco expects additional cash flow attributed from approximately $9.0 million of reserves by September 2007, with no additional costs, upon payout of the investment by the capital provider.

Capco's year end 2007 discounted value with the existing and additional assets is expected to exceed $38.0 million.

Capco also has compiled some significant land holdings in joint ventures with its financial partners. There are numerous exploratory and developmental opportunities on these properties. The most significant opportunities are where Capco has the ability to control and has an option to own a part of two key prospects. One prospect is located in Vermilion field where through 3-D seismic interpretation it is estimated there are recoverable reserves of 250 BCF. The second prospect is on the Green Canyon property where deep drilling has the potential of discovering some 175 million barrels of oil.

While Capco has faced financial challenges, it believes that with strategic partnerships, certain financial restructuring, and successful work overs, operations will result in positive cash flow. The current financial situation resulted primarily by drilling a $5.5 million dry hole in 2005, an unexpected decline of certain key producing wells and unsuccessful work over ventures. Since then, Capco has restructured its management and retained additional specialists. It is now poised to drill, rework and return to production a large inventory of wells with greater success.

Capco has a master credit agreement with Union Bank of California for $50.0 million. Capco has reduced the debt by $14.0 million from cash flow since September 2006, when this credit facility was placed with an initial advance of $30.0 million. Capco's share of this debt is approximately $8.0 million.

Regarding onshore operations, Capco has varying interests in some 270 wells located in Oklahoma and Texas. Current production from these operations is about 60 bopd from 10 producing wells. Capco plans to sell and farmout the operations of these wells for development.

KEY INVESTMENTS

Offshore (GOM) Activities

West Delta 62 Field, Federal Waters

This field was acquired in September 2006 making 4.2 mmcfd. Capco is the Operator and has a 24.17% working interest ("WI") in the well and the field. In January the well was shut down due to a sanding problem. Capco is attempting to return the well to production at present.

Ship Shoal 144/145/159, Federal Waters

This field was acquired in September 2006 and contains three wells. Two wells are producing about 3.2 mmcfd. Capco is the Operator and has working interests varying from 10.9% to 18.125% in the wells and the field. This field has significant drilling potential. Two wells are planned for drilling at a gross cost of about $13.0 million (Capco's net share $1.4 million). The initial production from each well is expected to be about 11 mmcfd.

West Cameron 102, Federal Waters

This field was acquired in September 2006 and was producing 5.2 Mmcfd in August 2006. Capco is the Operator and has a 18.125% working interest. The well has since been shut down due to water encroachment problems. The pressures remain to be of economic capability. Capco plans to workover the well and place it on production within the second calendar quarter 2007.

Non Operated Fields, Federal Waters

Capco acquired interests in various non operated fields in Federal waters in September 2006. The net share of production for Capco is 50 bopd and 2,435 mcfd. The production is from the following fields:

1. EI 148, 44 and 45. Operated by Remington and Hellis. Capco's WI
   share, varying from 4% to 6%, is 10 bopd and 450 mcfd.
2. SS 167: Operated by Explore. Capco's 8% WI share is 14 bopd and 275
   mcfd.
3. SP 26: Operated by Goodrich: Capco's 6% WI share is 22 bopd and 35
   mcfd.
4. WC22/23: Operated by Newfield: Capco's 6% WI share is 1 bopd and
   275 mcfd.
5. Brazos A-2: Operated by Hunt: Capco has a 12% WI. The well is shut
   in pending installation of a compressor. Capco expects its share of
   production to be 700 mcfd.
6. HI 282: Operated by LLOG: Capco's 6% WI share is 2 bopd and 450
   mcfd.
7. HI A538: Operated by EPL. Capco's 8% WI share is 250 mcfd.