Bayou Bend Petroleum Ltd. has commenced drilling its second well in Federal Waters of the Gulf of Mexico. The well is testing a prospect in Mustang Island Block 736 which is approximately 30 miles from the Texas coastline in 155 feet of water. TODCO Rig 253 was mobilized to the site and spudded on August 4, 2007.

The Mustang Island Bock 736 prospect is a 13115' feet MD geopressured Marg A test on a large structural trap that is supported by amplitude anomalies and AVO analysis. The well is expected to reach target depth in approximately 32 days. If successful, the well will be mud line suspended while a caisson is fabricated and installed. The Company has a 100% interest in the well.

The Mustang Island project is part of a quality portfolio of gas/condensate prospects the Company holds in the Federal Waters of the Gulf of Mexico. This portfolio, with numerous high potential prospects, is an excellent complement to the Company's ongoing production and exploration operations at the Marsh Island project in Louisiana State waters.

"This is an exciting day for Bayou Bend as we spud our second well in the Federal Waters of the Gulf of Mexico. This is the second of three scheduled projects in the Federal Waters in 2007," commented Clinton W. Coldren, President and Chief Executive Officer of Bayou Bend.