Q Investments Ltd. Exercises Right to Make Loan Convertible

VANCOUVER, BC, Aug. 10 /CNW Telbec/ - Exxel Energy Corp. ("Exxel")    
(TSX-V: EXX) has previously announced its loan agreement with Q Investments
Ltd. ("Q") under which Q loaned Exxel US$5,000,000 to fund the acquisition of
oil and gas interests in Colorado's Piceance Basin. That loan was not
convertible into equity, but under the agreement Exxel agreed to amend the
loan to include a conversion feature at US$5.00 per share if notified by Q
that it required such an amendment and if Exxel first received minority
shareholder approval. Q has now given the required notice and Exxel has
obtained written consent to the amendment, signed by shareholders holding a
majority of Exxel's issued common shares held by disinterested shareholders.
Accordingly, Exxel and Q have entered into an amended Loan Agreement that
contains the right of Q to convert the outstanding principal amount of the
loan into common shares of Exxel at the rate of US$5.00 per share, exercisable
for five years from the date that the funds loaned were originally advanced to
Exxel. The amended Loan Agreement is subject to the approval of the TSX
Venture Exchange.

The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.