Celtic Provides an Operations Update

CALGARY, ALBERTA--(Marketwire - March 8, 2012) - Celtic Exploration Ltd. ("Celtic" or the "Company") CLT released its financial results for the year ended December 31, 2011, earlier today. The Company has followed up with this press release, providing an operations update.

Resthaven

Celtic is pleased to provide an update on activities at Resthaven. To date, the Company has drilled 20 horizontal Montney wells over a fairway that extends more than 70 kilometres. Celtic has built a facility located at 02-10-060-01W6 (the "Resthaven facility") including compression and dehydration equipment with a capacity of 55.0 MMCF per day of raw natural gas production. The Company has tied-in nine horizontal wells to date and is currently producing approximately 30.0 MMCF per day of raw natural gas through the Resthaven facility. The gas is shipped through a 12-inch pipeline from the Resthaven facility to the Keyera Simonette Gas Plant where the gas is processed and liquids are extracted. The Simonette Gas Plant is currently operating at -30 degrees C and the operator is working to bring the configuration to -35 degrees C, increasing the liquids recovery ratio. In addition, the operator is currently working on an expansion with deep-cut capability that will further enhance liquids recovery. The completion for deep-cut capability at the Simonette Gas Plant is expected to be December 2013. In addition, Celtic has built a water injection facility which is tied into the Resthaven facility, to further reduce production expenses.

Celtic recently completed the pipeline extension north-west to Jayar and has brought the horizontal well located at 04-34-061-03W6 (100% WI) on production. A second horizontal well at Jayar located at 01-15-061-03W6 (100% WI) has been drilled and is currently being completed. A third well located at 02-26-061-03W6 (100% WI) is currently drilling.

Celtic recently completed a horizontal well in the Montney formation at Resthaven located at 02- 30-060-02W6 (100% WI). The well was drilled to a measured depth of 5,177 metres and was completed with a 16-stage foam fracture technique. After 304 hours of frac clean-up and flow, at the end of the test, the well was producing natural gas at a rate of 10.1 MMCF per day and field condensate at 118 barrels per day, at a flowing wellhead pressure of 5,578 kPa (809 psi). This well is now on production and additional liquids will be recovered from the gas at the gas plant.

The Company currently has six additional horizontal wells at Resthaven that have been drilled and are awaiting tie-in. The majority of these wells are expected to be brought on production in April and May 2012.

Kaybob Duvernay

Celtic has continued to be active drilling the Duvernay shale play at Kaybob. The horizontal well located at 13-36-060-20W5 (33.3% WI) was completed and brought on-stream in February. The well will be produced at high back pressure, similar to the methodology used in the Eagle Ford shale play in Texas, USA. The horizontal well located at 13-22-062-21W5 (50% WI) was completed using a plug and perf technique with 40 perf clusters fractured in 10 stages. During clean-up, the well flowed at rates of up to 6.8 MMCF per day up 7" casing after which the well was shut-in to run tubing. The well was then tested at various gas rates between 6.0 to 7.7 MMCF per day at flowing tubing pressures of 10 to 15 mPa (1,450 to 2,174 psig). At the end of the 11 day flow period, in addition to the natural gas production, the well was producing field condensate at a rate of 658 barrels per day (109 barrels per MMCF of raw gas). This well is expected to be put on production this summer. Another horizontal well located at 04-11-060-19W5 (33.3% WI) has been drilled and is expected to be completed prior to spring break-up. Two additional horizontal wells will be spud prior to break-up.

Gas Plant Outages

Celtic was informed by SemCAMS ULC ("SemCAMS"), the operator of the Kaybob KA Gas Plant ("KA"), that due to certain mechanical issues, KA was shut down on February 27th, 2012. Initially, SemCAMS expected to have resolved the operational issues and put the plant back online within a few days. However, SemCAMS has informed the Company that the anticipated start-up date is now expected to be on March 15th, 2012. As a result, Celtic's production processed at KA of approximately 7,700 BOE (78% gas) per day will be shut-in for 18 days.

At Grande Cache, the Company shut-in production at the Copton Gas Plant as a result of a field site accident that resulted in a fatality. Approximately 1,600 BOE (100% gas) per day was shut-in for approximately four weeks.

Celtic currently produces approximately 4,000 BOE (77% gas) at the Kaybob K3 Gas Plant ("K3"). K3 is expected to be shut-in for four weeks during May and June, as SemCAMS, the operator, will be conducting planned turnaround maintenance operations. These turnaround operations occur every four to five years.

Celtic's 2012 Guidance, as reported on March 8, 2012, reflects the impact of the aforementioned gas plant outages.

In 2012, Celtic recently completed the acquisition of an additional 11.04% interest in the Kaybob South Unit #2, giving the Company an interest of 88.96% in the Unit and related facilities, including the gas compression facility located at 15-07-060-18W5. The Energy Resources Conservation Board has granted Celtic approval to construct a gas processing facility capable of handling 150 MMCF per day of raw gas at 15-07-60-18W5 which is centered between the KA and K3 Gas Plants. Celtic is currently preparing documentation to put construction of a gas plant at this location out for re-bids. The Company will incur the majority of the expenditures to build this plant in 2013 and is currently reviewing alternatives to enhance liquids recovery. Celtic will be able to process the majority of its gas that is currently being processed at KA and K3 at this new facility. In addition, Celtic will be able to process new production from Kaybob where it is actively drilling wells targeting the Duvernay shale formation.

Property Dispositions

During February 2012, Celtic entered into an agreement to sell 5,488 net acres of land with no associated production for proceeds of $8.5 million ($1,549 per acre). This transaction is expected to close on April 2, 2012. The Company is currently negotiating with certain third parties to dispose additional properties with production in its non-core areas.

Advisory Regarding Forward-Looking Statements

This document contains expectations, beliefs, plans, goals, objectives, assumptions, information and statements about future events, conditions, results of operations or performance that constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements") under applicable securities laws. Undue reliance should not be placed on forward-looking statements. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking statements. We caution that the foregoing list of risks and uncertainties is not exhaustive. Events or circumstances could cause actual dates to differ materially from those estimated or projected and expressed in, or implied by, these forward-looking statements. The forward-looking statements contained in this document are made as of the date hereof and the Company does not intend, and does not assume any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws. Readers are cautioned that the foregoing test results are not necessarily indicative of long-term performance.

Measurements and Abbreviations

All dollar amounts are referenced in Canadian dollars, except when noted otherwise. Where amounts are expressed on a barrel of oil equivalent ("BOE") basis, natural gas volumes have been converted to oil equivalence at six thousand cubic feet per barrel and sulphur volumes have been converted to oil equivalence at 0.6 long tons per barrel. The term BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References to oil in this discussion include crude oil and natural gas liquids ("NGLs"). NGLs include condensate, pentane, propane, butane and ethane. References to gas in this discussion include natural gas and sulphur.

Working interest is abbreviated as "WI". Million cubic feet is abbreviated as "MMCF". Thousand cubic feet is abbreviated as "MCF". Barrels are abbreviated as "bbls". Giga joules are abbreviated as "GJ". Kilopascals is abbreviated as "kPa" and pounds per square inch is abbreviated as "psi".