Release: KAL Energy, Inc.: Completes formation of Indonesian subsidiary

London, July 26, 2007 -- KAL Energy, Inc is pleased to announce it has completed the formation of its wholly owned Indonesian subsidiary, PT Kubar Resources.

"After several months of work by our Indonesian management team and our legal partners, we are please to have received the approval from the Indonesian Ministry of Law and Human Rights for the formation of PT Kubar Resources. It is a key milestone in the development of KAL Energy as it enables us to broaden our commercial footprint in Indonesia. This will include taking in-house key activities as we continue to progress through the stages from exploration, reserve definition and feasibility to production. "stated Mr. Cameron Reynolds, KAL Energy CEO.

PT Kubar Resources is the in-country mining services company of KAL Energy established to commercialize its thermal coal concessions in East Kalimantan. It is 100% owned by KAL Energy, and shall be consolidated into future financial reports.

KAL Energy, Inc. has rights to two coal concessions situated near the Mahakam River in North Eastern Kalimantan, Indonesia. This river is a main transportation system for transporting coal to domestic and international markets. One of the concessions has a JORC Compliant Inferred Resource of 204 Million tonnes of thermal coal. With numerous other coal mines in East Kalimantan, including the world's largest thermal coal exporter Kaltim Prima Coal (KPC), KAL Energy's concessions are in a region that is known for its extensive open pit thermal coal producing mines and environmentally friendlier coal product. Indonesia has recently surpassed Australia as the world's leading thermal coal exporter, with prices varying from $30.00 to $60.00 plus per tonne. (end of release)