ASX/Media Release                                                                                                August 26, 2008

30 June 2008

Proved, Probable & Possible Reserves

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Grand Gulf Energy Limited [ASX Code: GGE] is pleased to report that its net reserve position which includes for the first time initial Proved, Probable and Possible Reserves for the Napoleonville Salt Dome project, as of 30 June 2008, is 10..5 Bcf gas and 178,000 Bbls oil. This is detailed in the table following.

Mr James Trimble, Grand Gulf?s Managing Director said ?On the basis of $110/Bbl oil and US$8/Mcf gas prices Grand Gulf?s Future Net Revenue from Proved and Probable reserves alone, discounted at 10%, is over US$16 million?.

?If the Possible reserves are added the value is over US$28 million. This is 4 times Grand Gulf?s market capitalisation.? Mr Trimble said.

The distribution of Grand Gulf?s reserves is very much related to the status of the areas in which it operates. Most of its Proved reserves are in Oklahoma where it has been drilling for some time. All of its Possible reserves are in the Napoleonville Salt Dome project. The reserves at Napoleonville are based on an initial 4 Proved Undeveloped locations, 1 Probable location and 3 Possible locations from a total of 20 prospects at this date, including the first five wells scheduled to be drilled.

There are many more leads and prospects that will be added to reserves reports in the future as wells are drilled, the fault blocks are better defined and production is established, which under the guidelines for reserve definition will allow wells to be moved from one category to another, and new wells to be added. Many of the larger prospects defined at Napoleonville are not classifiable as reserves at this point.

The distribution of Grand Gulf?s reserves over its areas of activity is detailed in the following table:

Oklahoma

Grand Gulf?s reserve position continues to grow in Oklahoma. Drilling in 2008 will continue to move more reserves into the PDP category and will also confirm the benefits of 3D seismic in its leases.

93% of Grand Gulf?s reserves in Oklahoma are in the proved category (81% are PUDs) as illustrated by the accompanying chart.

Napoleonville Salt Dome Project

Proven, Probable and Possible Reserves have been calculated for Napoleonville based only on the first 8 prospects that have been proposed by the joint venture.

There are over 50 leads and prospects that have already been identified at Napoleonville and more of these will be added to the Proven, Probable and Possible categories as drilling takes place.

PROVED, PROBABLE AND POSSIBLE RESERVES

The reserves estimates were prepared by T.J. Smith & Company, Inc. Oil and Gas Consulting, Houston, Texas, USA and as such the reserves are of the Proved, Probable and Possible Reserve category as defined by the Society of Petroleum Engineers? standards.

Net Present Values (NPVs) are generated by using production attributable to working interests less royalties, operating costs, ad valorem taxes and, where appropriate, capital costs. The 30 June 2008 NYMEX oil and gas prices used, as per SEC guidelines, are US$13.353 per MMBtu for gas and US$140.00 per barrel for oil less appropriate price differentials attributable to the particular area.  Due to the drop in oil and gas prices since 30 June 2008 Grand Gulf has also provided the NPVs at US$8.00 per MMBtu and US$100 per barrel and.

For further information contact:

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

COMPETENT PERSON STATEMENTS

Reserve Estimation

The information in this report that relates to reserve estimations is based on information compiled by Mr Kenneth H Dwight BSc, who is a member of the Society of Petroleum Engineers Inc and Registered Professional Engineer, Texas. Mr Kenneth H Dwight is a full time employee of TJ Smith & Company, Inc., consulting petroleum engineers to the Company.  Kenneth H Dwight has at least 20 years experience as a petroleum engineer. Kenneth H Dwight consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Dollars means US dollars unless otherwise stated.

Reserves ? Background Data

Grand Gulf Energy Limited (Grand Gulf) commissioned T.J.Smith & Company, Inc.. Oil and Gas Consulting, Houston, Texas, USA to undertake the estimate of the Proved, Probable, and Possible Reserves at Grand Gulf?s properties in Oklahoma, Louisiana and Texas including the Napoleonville Salt Dome complex.

The Proved, Probable and Possible Reserves estimates determined for the properties as at 30 June 2008 are based on the following data;

?          Proved, Probable and Probable Reserves estimated by T.J.Smith & Company, Inc.

?          Cost data supplied by Grand Gulf

?          Oil and Gas prices sourced from NYMEX as at 30 June 2008 with appropriate price differentials as per area applied.

Proved, Probable and Possible Reserves Estimates - Compliance with the SPE standards criteria

This Proved, Probable and Possible Reserves statement has been compiled in accordance with the standards defined by the Society of Petroleum Inc. Classification of the Proved and Probable Reserves was completed by T.J. Smith & Company, Inc. in conjunction with Grand Gulf.

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