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Doral Energy Provides Operations Update

December 4, 2009 (FinancialWire) — Doral Energy Corp. (OTCBB: DRLY) announced additional updates on the company’s continuing operations on two projects on its oil and gas properties in the Hanson Project in Eddy County, New Mexico: the recompletion of the Doral Federal S No. 7 well as a Grayburg/San Andres completion; and the improvement of waterflood operations in the West Artesia Grayburg Unit.

Federal S No. 7 Recompletion

Doral Energy’s engineers and geologists have evaluated the modern logs run on the Federal S No. 7 well and have identified multiple prospective pay intervals in the well. The first completion interval has been perforated, acidized, and swab tested. The swab tests and acid job revealed good bottomhole pressure in the interval. Fluid samples recovered during swab tests exhibited good oil cuts approaching 100%. A fracture stimulation job has been designed and will be performed as soon as frac equipment becomes available on the service company’s frac schedule.

When asked to comment on the results to date, Marty Bloodworth, Doral Energy’s vice president of Operations stated, “We are pleased that the modern logs run in the Federal S No. 7 well indentified multiple pay intervals in the Grayburg/San Andres formations. The first interval we perforated had both good pressure and high oil cuts on the fluid samples. We look forward to being able to stimulate this interval to determine its full potential. We are still experiencing delays in frac equipment availability, but hope to have them resolved shortly. We will keep our shareholders informed as we continue to develop the multiple pay intervals in this well.”

West Artesia Grayburg Unit

Doral Energy continues to evaluate and exploit the potential identified in the preliminary results of its study of the West Artesia Grayburg Unit (WAGU). Additional injection perforations have been added in a second water injection well (WIW) in the Unit, again with very good results. The WAGU No. 1, a previously shut-in water injection well, was returned to service after 182′ of perforations (364 shots) were added in previously non-perforated intervals in the unitized Grayburg formation. Prior to adding these perforations, the well was shut-in and unable to inject water in the previously perforated interval. After the well was perforated and acidized with 3,500 gallons of 15% hydrochloric acid, the WAGU #1 was able to inject at a rate of 7 BPM (barrels per minute) at 2,300 psig of surface injection pressure, or an equivalent daily water injection rate of 10,080 barrels of water per day.

In addition to the work on the WAGU No. 1 and WAGU No. 4 water injection wells, Doral has also completed mechanical repair jobs and updated the production equipment in two Unit producing wells, the WAGU No. 3 and the WAGU No. 22 wells. These producing wells have already begun to exhibit improvements in oil production following the work on the offset injector, the WAGU No. 4, and the availability of additional make-up injection water for Unit.

When asked about the potential of the West Artesia Grayburg Unit, Bloodworth stated, “The development of this Unit is a fine example of Doral’s exploitation company business model. We apply modern techniques to exploit bypassed pay in wells neglected by previous operators. In this Unit our engineers and geologists have identified numerous bypassed pay intervals in the producer wells and a lack of conformance with the injection wells. They further discovered that the historical lack of supply water hindered production response from the wells in the WAGU. Doral has located an ample source of supply water for the waterflood, and we are moving forward with our plan to improve the conformance and increase oil production from the WAGU.”

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