Grand Gulf Energy Limited

Suite 8, 7 The Esplanade

Mt Pleasant 6153

Western Australia

T +61 (0) 8 9324 3011

F +61 (0) 8 9324 3055

E info@grandgulf.net

www.grandgulfenergy.com  

ABN 22 073 653 175

ASX GGE

ASX/Media Release                                                                                                            29^th April 2008

Napoleonville Salt Dome update and Macquarie Bank Credit Facility

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Grand Gulf Energy Limited (Grand Gulf) is pleased to provide an overview on its operations generally and in particular an update on its 26.3% owned Napoleonville Salt Dome project in Assumption Parish, Louisiana USA and to announce that it has signed a Term Sheet for a Credit Facility with Macquarie Bank of US$50 million with an initial Borrowing Base of US$2.5 million.

Since the last Napoleonville update on 20^th February 2008 the Operator has continued geophysical, geological and reservoir engineering work and has now increased the number of leads and prospects around the Napoleonville Salt Dome from some 29 to over 50. These range from “PUD” type prospects to exploration prospects. PUD type prospects are those that are identified as being updip and in the same fault block as former producing wells around the Salt Dome.

The Operator has so far nominated the first two Prospects to be drilled in 2008 as part of up to four wells to be drilled in 2008.

Grand Gulf CEO Mr James Trimble said “We are now seeing the enormous potential of the Napoleonville Salt Dome unfold. This potential is not only in and around existing and previous production but also identified through the entire prospective section around the salt dome.  We can now confidently interpret the edge of the salt and show where untapped oil and gas reservoirs are located updip or along trend from existing wells.  The excellent quality of the 3D is akin to that obtained offshore where significant production has been achieved from traps under salt overhangs similar to those now being identified at Napoleonville.  The 3D data are also yielding a number of direct hydrocarbon indicators which are being used to highgrade the extensive list of leads and prospects.  The US$2.5 million from Macquarie Bank together with the US$2.3 million to be received from the sale of the Fee Minerals will allow us to drill the initial wells at Napoleonville as well as continue with our development activities in Oklahoma and Texas.”

“With record oil prices over $100 per barrel and gas prices in the US at over $9 per thousand cubic feet the economics of the prospects are extremely good’ Mr Trimble said.

“Many of the over 50 leads will be drilled over the next few years. We are starting the drilling with the PUD type prospects and will also look to drill at least one of the larger exploration prospects this year.  These prospects range in size from 1.5 Bcfe for the PUD features to over 50 Bcfe for the exploration prospects with both oil and gas targets’ Mr Trimble said.

To view presentation, please click on the link below:

http://www.grandgulfenergy.com.au/documents/602.pdf

Macquarie Bank Credit Facility

Closing and funding of the $50 Million Credit Facility will be subject to the negotiation, execution and delivery of definitive loan and security documentation acceptable to Lender and its counsel, Lender’s approval of the initial Development Plan and to other conditions customary for financings of this nature, appropriate in context of the proposed transaction or requested by Lender.

The Credit Facility amount shall be limited to a Borrowing Base with the initial Borrowing Base set at $2,500,000 committed at Closing. Funding will be available a pro-rata basis subject to issuance of the Warrants as follows;

-          Tranche A: $2,000,000 upon the issuance of 45,000,000 Warrants;

-          Tranche B: $500,000 upon the issuance of 13,775,000 Warrants;

-          Tranche C: Up to $47,500,000 upon the issuance of 39,500,000 Warrants at first drawdown under this tranche and at Macquarie Bank’s sole discretion.

The Strike Price of the Warrants shall be equal to 1.25 times the volume weighted average price (“VWAP”) over a sixty-day trading period preceding the public announcement associated with the Loan Facilities and the Term shall be Four years from the date of issue.

For further information contact:

For more information visit www.grandgulfenergy.com and sign up for email news.

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Issued by

Purple Communications

Level 3, 28 Kings Park Road, WEST PERTH WA 6005

Ph: 08 9485 1254     Fax: 08 6263 0455

purple@purplecom.com.au