Teton Energy Provides Operational Update and Issues Financial and Operating Projections for Remainder of 2008.

DENVER, May 7 /PRNewswire-FirstCall/ -- Teton Energy Corporation ("Teton" or the "Company") AMEX: TEC announced today that it produced 422 million cubic feet equivalent ("MMcfe") in the first quarter of 2008, a 108 percent increase from 203 MMcfe in the first quarter of 2007. The increase was attributable to the Washco, Piceance, DJ Noble and Williston projects. The Company participated in the drilling of 24 gross wells in the first quarter of 2008 and had 162 producing wells at the end of the quarter, a 500 percent increase in producing wells from the first quarter of 2007. The first quarter of 2008 does not include any results from the new Central Kansas Uplift acquisition as March results will be a purchase price adjustment. The Kansas acquisition will have a very positive impact on operational and financial results in the second quarter of 2008.

Piceance Basin. Net production increased 34 percent to 264 MMcfe in the first quarter compared to the same period a year ago, even after accounting for the sale of 50 percent of Teton's interest in the Piceance Basin in October 2007. The Company participated in the drilling of 11 new gross wells in the first quarter of 2008. A total of 57 gross wells were producing and 17 gross wells were waiting on completion as of March 31, 2008.

DJ Basin. In the Teton Noble AMI, net production increased to 55 MMcfe in the first quarter of 2008 compared to 2 MMcfe in the same period of 2007. Net production is expected to increase as additional wells are drilled and hooked up and compression efficiencies are optimized. Noble commenced the 2008 drilling program on March 23, 2008 and drilled 11 gross wells in the first quarter of 2008. A total of 78 gross wells were producing and 15 wells were waiting on completion as of March 31, 2008.

In the Washco project, production totaled 94 MMcfe during the first quarter of 2008. The assets were acquired in October of 2007. There were 27 gross producing wells operated by Teton. In the Frenchman Creek project west of the Teton Noble AMI, the Company and its partner drilled two of ten permitted wells on two seismically generated locations, logistically available in an aggressively farmed area. The Company cannot drill additional wells until after the crop season and will evaluate the information gathered from log data to high grade locations planned in the fall. The two wells were financed by Teton's 50 percent partner as part of an earn-in agreement.

Williston Basin. Net production in the first quarter of 2008 was 10 MMcfe from 2 wells, a 146 percent increase from the same period in 2007. A successful Red River test well, in which the Company participated with a 5.95% working interest, should contribute to production in the second quarter of 2008. In April, the Company received a proposal from its partner to drill a vertical well to test the Red River and two other formations. The Company also participated with a small working interest in two additional Bakken tests in Dunn County during the first quarter. The two wells are in the process of being completed.

Central Kansas Uplift. The Company now has one rig on location in its new project area in Kansas and will be moving a completion rig on location shortly. The Company drilled the first well of the 2008 drilling campaign and is currently drilling its second well on Teton's acquisition acreage. The Company plans a $7 million capital expenditure program in 2008 to drill a total or 29 wells, 12 recompletions and shoot additional 3D seismic.

Big Horn Basin. The Company has acquired an additional 6,434 gross acres in the Big Horn Basin in 2008 and is currently negotiating with a partner to begin a drilling program to test the Greybull sands and the Mowry Shale formations. Four wells are planned for 2008.

Financial and operating projections for the remainder of 2008. These estimates have been prepared based on the Company's current expectations for natural gas and crude oil volumes, commodity pricing and any related differentials, costs and expenses, debt balances and other items resulting from the Company's 2008 capital budget. These projections are forward-looking and subject to various factors, including but not limited to those factors outlined in this release. For the full year 2008, the Company expects oil and gas revenues to range from $35 million to $40 million before the effect of commodity price hedges. EBITDAX (defined as net income less interest expense, taxes, depreciation depletion and accretion expense, exploration expense, and other non-cash items to include unrealized gain (loss) on oil and gas derivatives, gain (loss) on derivative contract liabilities and stock based payments for compensation and services) is expected to range from $19 million to $24 million. These estimates are based on a capital expenditure program of approximately $43 million and on average commodity prices of $8.00 per million British Thermal Units (MMBtu) for natural gas (NYMEX) and $90.00 per barrel (Bbl) of oil (WTI).

The Company previously issued projections for net production of oil and natural gas for 2008 to approximate 3.4 billion cubic feet equivalent (Bcfe) which represents a 177 percent increase from 2007 production. The Company plans to participate in the drilling of approximately 269 gross wells, including 50 wells to be operated by Teton.

"Our 2008 drilling program is moving forward at a rapid pace, particularly in the Piceance Basin in the first quarter," commented Dominic Bazile, Executive Vice President and Chief Operating Officer. "We are very excited to have a drilling rig in place to begin our drilling program in the new Central Kansas Uplift project. Although we drilled a sub-economic test well on a seismic location and decided to plug it, this is a statistical play where our partners have experienced an 88 percent success rate. We look forward to success as we drill the remainder of our 2008 program. We are also in active discussions with potential industry partners for our Washco, South Frenchman Creek and Big Horn Basin projects."

Company Description. Teton Energy Corporation is an independent oil and gas exploration and production company focused on the acquisition, exploration and development of North American properties. The Company's current operations are concentrated in the prolific Rocky Mountain and Mid-continent regions of the U.S. Teton has leasehold interests in the Central Kansas Uplift, the eastern Denver-Julesburg Basin in Colorado, Kansas and Nebraska, the Piceance Basin in western Colorado, the Williston Basin in North Dakota and the Big Horn Basin in Wyoming. Teton is headquartered in Denver, Colorado and is publicly traded on the American Stock Exchange under the ticker symbol "TEC". For more information about Teton, please visit the Company's website at http://www.teton-energy.com.

Forward-Looking Statements. This news release contains certain forward-looking statements, including declarations regarding Teton's and its subsidiaries' expectations, intentions, strategies and beliefs regarding the future within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements contained herein are based upon information available to Teton's management as at the date hereof and actual results may vary based upon future events, both within and without the control of Teton's management, including risks and uncertainties that could cause actual results to differ materially including, among other things, the impact that additional acquisitions may have on Teton and its capital structure, exploration results, market conditions, oil and gas price volatility, uncertainties inherent in oil and gas production operations and estimating reserves, unexpected future capital expenditures, competition, governmental regulations, and other factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2007, filed with the Securities and Exchange Commission. Teton's disclosure reports are on file at the Securities and Exchange Commission and can be viewed on Teton's website at http://www.teton-energy.com. Copies are available without charge upon request from the Company.

     Company contact:
     Ron Wirth
     Director of Investor Relations & Administration
     (303) 565-4600
     rwirth@teton-energy.com
     http://www.teton-energy.com