EQU: TSX, NYSE

CALGARY, AB, May 17, 2011 /PRNewswire-FirstCall/ – Equal Energy Ltd. (“Equal” or the
“Company”) announces that earlier today Judge Christopher Sontchi,
United States Bankruptcy Judge for the District of Delaware
(“Bankruptcy Court”), entered an order (the “Sale and Settlement
Approval Order”) in the bankruptcy cases of Petroflow Energy Ltd. and
its subsidiaries, North American Petroleum Corporation USA and Prize
Petroleum LLC (collectively “Petroflow”), approving: (i) the purchase
and sale agreement between the Company and Petroflow; and (ii) the
settlement agreement with the Company, Petroflow, Compass Bank
(“Compass”) and Texas Capital Bank, N.A. (“Texas Capital”)
(collectively the “Agreements”).

As provided for in the Company’s April 26, 2011 press release, pursuant
to the Agreements, the Company will acquire Petroflow’s interests in
assets developed pursuant to the now terminated Farmout Agreement (the
“Farmout”) between the Company and North American Petroleum Corporation
USA (“NAPCUS”) (the “Acquisition”), and concomitantly settle all
outstanding legal matters between the Company and Petroflow, Compass
and Texas Capital.

Pursuant to applicable United States’ bankruptcy law, any challenge to,
or appeal of, the Sale and Settlement Approval Order, must be filed no
later than May 31, 2011. In the absence of any such challenge or
appeal, the Company anticipates that a closing of the Acquisition and
settlement approved by the Bankruptcy Court will occur on or about June
1, 2011.

This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities of Equal in any
jurisdiction in which such offer, solicitation or sale would be
unlawful. The securities to be offered have not been and will not be
registered under the United States Securities Act of 1933, as amended,
or any state securities laws and may not be offered or sold within the
United States or to or for the account or benefit of a U.S. Person
absent registration or an applicable exemption from the registration
requirements of such Act or laws.

About Equal Energy Ltd.
Equal is an exploration and production oil and gas company based in
Calgary, Alberta, Canada with its United States operations office
located in Oklahoma City, Oklahoma. Equal’s shares and debentures are
listed on the Toronto Stock Exchange under the symbols (EQU, EQU.DB.A,
EQU.DB.B) and Equal’s shares are listed on the New York Stock Exchange
under the symbol (EQU). The portfolio of oil and gas properties is
geographically diversified with producing properties located in
Alberta, British Columbia, Saskatchewan and Oklahoma. Current
production is comprised of approximately 56 percent crude oil and
natural gas liquids and 44 percent natural gas. Equal has compiled a
multi-year drilling inventory for its properties including its new oil
play opportunities in the Cardium and Viking in central Alberta in
addition to its extensive inventory of drilling locations in the Hunton
liquids-rich, natural gas play in Oklahoma.

Forward-Looking Statements
Certain information in this press release constitutes forward-looking
statements under applicable securities law. Any statements that are
contained in this press release that are not statements of historical
fact may be deemed to be forward-looking statements. Forward-looking
statements are often identified by terms such as “may,” “should,”
“anticipate,” “expects,” “seeks” and similar expressions. Specific
forward-looking statements included in this press release include
comments related to the closing date of the Acquisition, and the
possibility of appeal of the Sale and Settlement Approval Order.

Forward-looking statements necessarily involve known and unknown risks,
including, without limitation, uncertainty regarding approval by the
bankruptcy court, possible appeals of the Sale and Settlement Approval
Order, risks associated with oil and gas production; marketing and
transportation; loss of markets; volatility of commodity prices;
currency and interest rate fluctuations; imprecision of reserve
estimates; environmental risks; competition; incorrect assessment of
the value of acquisitions; failure to realize the anticipated benefits
of acquisitions or dispositions; inability to access sufficient capital
from internal and external sources; changes in legislation, including
but not limited to income tax, environmental laws and regulatory
matters.

Readers are cautioned that the foregoing list of factors is not
exhaustive. Readers are cautioned not to place undue reliance on
forward-looking statements as there can be no assurance that the plans,
intentions or expectations upon which they are placed will occur. Such
information, although considered reasonable by management at the time
of preparation, may prove to be incorrect and actual results may differ
materially from those anticipated Forward-looking statements contained
in this press release are expressly qualified by this cautionary
statement.

Additional information on these and other factors that could affect
Equal’s operations or financial results are included in Equal’s reports
on file with Canadian and U.S. securities regulatory authorities and
may be accessed through the SEDAR website (www.sedar.com), the SEC’s website (www.sec.gov), Equal’s website (www.equalenergy.ca) or by contacting Equal. Furthermore, the forward looking statements
contained in this news release are made as of the date of this news
release, and Equal does not undertake any obligation to update publicly
or to revise any of the included forward-looking statements, whether as
a result of new information, future events or otherwise, except as
expressly required by securities law.

SOURCE Equal Energy Ltd.