MegaWest Energy has provided a corporate update to shareholders along with filing its second quarter interim financial statements and management's discussion and analysis.

The company claims it has achieved a number of significant milestones in the quarter ended October 31, 2008. It has increased its leased acreage in Missouri/Kansas, Kentucky and Montana to over 110,000 net acres. More specific project milestones are as described below:

MISSOURI

Oil sales from the Marmaton River Project (Phase I) commenced in August 2008. The construction and commissioning of the Grassy Creek Project was completed on schedule and within budget in October 2008. As the Marmaton River Project reservoir began to respond to steam injection, production ramped up to average over 100 barrels per day in November. This was at the upper end of reservoir simulation predicted performance for that point in time. The reservoir simulation predicts that these wells would reach 300-500 barrels a day of production with continued operations. Initial indications of reservoir performance at Grassy Creek were better than those achieved at Marmaton, consistent with the better reservoir quality and thicker oil pay zone.

KENTUCKY

Design of the Green River Demonstration Project was completed, with all regulatory applications submitted and major equipment purchased for a planned construction start in early 2009. The Company farmed out 4,300 acres on the western flank of its acreage for New Albany Shale gas testing, retaining a 34.75% working interest. Two wells have been drilled and logged and are awaiting fracturing and flowrate testing.

MONTANA

2-D seismic over the Teton and Loma prospects was acquired and processed. The Company committed to the Devils Basin prospect and purchased trade seismic for reprocessing and interpretation.

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