CALGARY, ALBERTA--(Marketwire - Dec. 17, 2008) - Pearl Exploration and Production Ltd. ("Pearl" or the "Company") (TSX:PXX)(FIRST NORTH:PXXS) is pleased to announce that it has signed a definitive agreement to acquire 100% of the outstanding shares of BlackCore Resources Inc. ("BlackCore") and has agreed to hire a new senior management team who were formerly with the highly successful BlackRock Ventures Inc. The new Pearl management team are also the current principal shareholders of BlackCore.

John Festival will take over as President and CEO of Pearl and will bring with him his core management team consisting of Don Cook as Chief Financial Officer, Ed Sobel as Vice President of Exploration and Chris Hogue as Vice President of Operations. This team has a strong track record of success in heavy oil, most recently with BlackRock. Prior to that, they were involved as management of Koch Exploration Canada. Keith Hill will return to his previous role as Chairman of the Board. Randy Neely, the current CFO and Dean Tucker, the current VP of Operations, will be leaving the Company to pursue other opportunities.

In conjunction with these management changes, the Company wishes to announce there will be changes to its Board of Directors. Upon the completion of the acquisition of BlackCore, the new Board of Directors will include Keith Hill as non-executive Chairman, John Festival, Brian Edgar, Lukas Lundin and one additional director to be named in January.

BlackRock Ventures Inc. was sold to Shell Canada Limited for CAD$2.4 billion in May 2006. The BlackRock principals were able to assemble a high quality group of heavy oil resource assets and raise capital to develop these fields into early production stage properties and were producing 16,000 barrels of oil per day at the time of the Shell takeover. It is believed that this execution strategy will fit quite well with the high quality asset base that has been assembled by Pearl.

Current Pearl President and CEO, Keith Hill, stated, "The purpose of this transaction is to create more value for our shareholders. We are very excited to be able to attract what is arguably one of the best heavy oil management teams in Canada to Pearl. We've built an enormous resource base to date and look forward to working with Mr. Festival and his team to unlock the value from these fields. We are firm believers that heavy oil will be playing an ever-increasing role in world oil consumption as new sources of light crude become more and more elusive. The untapped potential of North American heavy oil is significant and Pearl is positioning itself to take full advantage. I would like to thank Randy Neely and Dean Tucker for their superb efforts over the past 18 months, which helped position Pearl to be a strong company in the coming years."

Incoming President and CEO, John Festival, stated, "We see Pearl as having a great collection of heavy oil resource assets and believe our team can help evaluate and develop these fields in the same manner as we did at BlackRock. We are very excited about the long term prospects of heavy oil and look forward to working with the Pearl team to create value during this economic downturn and position ourselves for what we believe is a very bright future."

The principal assets of BlackCore consist of a 100% interest in the John Lake field in Northern Alberta and CAD$5.5 million in cash. The John Lake field is located approximately midway between the existing Onion Lake and Fishing Lake fields, which are currently producing for Pearl. It is believed that with short radius horizontal wells, cold production from the John Lake field could be developed at relatively low cost in the range of 500 - 1000 barrels per day. The first goal of the new management team is to understand and rank the various properties in the combined company and put in place a plan to develop the most prospective of these in the current difficult pricing climate. The total value of the acquisition of BlackCore is approximately CAD$9 million.

Under the terms of the share purchase agreement between Pearl and BlackCore, BlackCore shareholders will receive 3.125 Pearl Units for each share of BlackCore. Each Pearl Unit will consist of 1 common share of Pearl, 0.2841 Class A share purchase warrants and 0.2841 Class B share purchase warrants. Each whole Class A warrant and each whole Class B warrant will allow the holder to acquire a Pearl share for a price of CAD$0.63 when the Pearl share price reaches a volume weighted average price for 30 days of CAD$1.50 and CAD$2.00, respectively. An aggregate of 17.6 million Pearl shares and approximately 10 million share purchase warrants will be issued. In addition, and as part of the transaction, a principal of BlackCore will also receive an additional 2.5 million shares of Pearl as a result of amending an agreement associated with Pearl's acquisition of an interest in its Blackrod project. The Company will also issue an aggregate of 5 million incentive stock options to incoming and current directors, officers and consultants. The deal is subject to required regulatory approvals. The expected effective and closing date of the transaction is January 8, 2009.

Pearl also wishes to announce that it has received approval from its current Board of Directors for a minimal work program and budget for 2009. The total budget authorized is CAD$5.4 million and is based on a US$50 WTI per barrel price for all of 2009. The strategy from a budget perspective is that this would represent a cash neutral budget and if, and when, oil prices rise, additional projects would be reinstated. This budget allows for ongoing maintenance and operating costs in Pearl's existing approximately 6500 barrels of oil per day production assets as well as the continuation of pilot programs in Mooney, Onion Lake and San Miguel oil fields. It should be noted that a review of the overall business plan will be undertaken in the New Year by the new incoming management and alterations to the existing plan are likely as a result of this effort. The overall goal of the budget is to maintain a positive cash balance and avoid taking on any debt until the world economy and oil prices stabilize.

GMP Securities L.P. acted as financial advisor on the foregoing transaction