Midway Releases 2nd Quarter 2010 Results

Midway has established a strong presence in the developing Cardium light oil play in the Garrington area of central Alberta.

Highlights

--  Drilled and completed a total of 7 operated (5.8 net) Cardium
    horizontals in the first half of 2010; 
--  Production at Garrington increased 80 percent, quarter over quarter, to
    1,188 boe/day in the second quarter, this represents 62 percent of total
    Company production of 1,927 boe/day; 
--  Continued to see improvements in the economics in Garrington by
    maintaining our low cost advantage with drilling and completion costs
    averaging $2.4 million with an increased number of fracs; 
--  Increased funds from operations by 55% over the first quarter of 2010 to
    $3.9 million; 
--  Achieved revenue growth of 237% to $8.6 million in the second quarter
    compared to 2009; and 
--  Realized approximately $500,000 of additional net present value of
    future net revenue (before income taxes) per well for the majority of
    the Company's future locations in Garrington following the new royalty
    announcements by the Government of Alberta. 

Midway's transformation to an oil weighted resource company continued with production at the end of the second quarter weighted 50 percent to oil and NGL's compared to 15 percent in 2009. Management expects this trend to continue to increase quarter over quarter and forecasts oil and NGL's to comprise 65 percent of the production mix at year end.

Corporate Highlights

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($ 000's, except operational                                                
 and share and per share                                                    
 amounts)                                  Q2             Q1             Q4 
                                         2010           2010           2009 
----------------------------------------------------------------------------
                                                                            
Petroleum and natural gas                                                   
 revenue                                8,645          6,269          3,682 
                                                                            
Funds from operations                   3,908          2,525             82 
Basic and diluted per share              0.06           0.04           0.00 
                                                                            
Net loss                               (3,797)          (891)        (2,318)
Basic and diluted per share             (0.06)         (0.01)         (0.04)
                                                                            
Working capital deficiency (1)         (5,150)        (7,416)        (8,383)
Bank debt                              26,281         20,443          4,155 
                                                                            
Capital expenditures                    7,462         21,180         37,661 
Total assets                          134,948        130,217        111,211 
                                                                            
Weighted average shares                                                     
 Basic and diluted (000's)             62,370         62,236         55,855 
                                                                            
Common shares outstanding                                                   
 Basic (000's)                         62,370         62,370         61,445 
 Diluted (000's)                       69,490         65,370         64,445 
                                                                            
Average production:                                                         
 Natural gas (mcf/d)                    5,515          4,417          3,783 
 Oil and NGL's (bbl/d)                  1,008            630            321 
 Oil equivalent (boe/d 6 : 1)           1,927          1,366            951 
                                                                            
Average realized prices:                                                    
 Natural gas ($/mcf)                     4.25           5.02           4.57 
 Oil and NGL's ($/bbl)                  70.64          75.08          70.09 
 Oil equivalent (boe/d 6 : 1)           49.10          50.84          41.79 
                                                                            
Netback ($/boe)                                                             
 Petroleum and natural gas                                                  
  revenue                               49.10          50.84          41.79 
 Royalties                               5.28           5.93           3.94 
 Operating expenses                     14.26          15.82          16.79 
 Operating netback                      29.56          29.09          21.06 
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(1) Excludes the fair value of financial instruments and current portion of
    bank debt. 

Message to Shareholders

In the first six months of 2010, Midway has concentrated its efforts on its Cardium assets in the Garrington area of Alberta by continually refining drilling, completion and production techniques on our multi-stage frac Cardium horizontal wells. We are seeing positive improvements in all aspects of our development program. The average length of our horizontally drilled sections has increased to over 1,300 meters and we are now fracing wells with 16 to 18 stages of frac while maintaining drilling and completion costs below our target of $2.5 million per well.

We have worked to improve the on-time performance and pump efficiencies of our wells resulting in decreased operating costs in the Garrington area and these efforts are drawing down our overall corporate operating costs. In the first quarter of 2010 corporate operating costs were just under $16 per boe and we are projecting corporate operating costs of $10.90 per boe in the third quarter with continual quarterly improvement into 2011. Garrington operating costs are forecast to decrease from $11 per boe in the first quarter of 2010 to $8 per boe in the third quarter, a 27 percent decrease over six months.

Midway operates three main oil and natural gas compression facilities in the Garrington area. With increased production, the facilities were all undersized for natural gas take-away. We have completed upgrades in two of the facilities and expect to have the third completed in early Fall of this year. Upon completion of the third facility upgrade, Midway will have adequate oil and natural gas take-away capacity to develop our land position in Garrington.

We are now confident with our operations in Garrington and our ability to execute our business plan. In early July we announced the closing of a $16.5 million equity issue with the use of proceeds dedicated to accelerating our original business plan and increasing our budget for drilling and facilities in the Garrington area. For the year, Midway anticipates drilling a total of 21 (17 net) wells in Garrington and spending an additional $3 million on upgrades to our third oil and natural gas facility. We are forecasting approximately $10 million in funds from operations in the fourth quarter of 2010 using pricing of US$75 WTI per barrel for crude oil and $4.00 per GJ AECO for natural gas. Our exit production rate is expected to be approximately 3,000 boe/day with approximately 80 percent of the production coming from the Cardium wells in Garrington.

On behalf of the Board of Directors

M. Scott Ratushny, Chairman and Chief Executive Officer

Forward-looking Statements

This news release contains forward-looking statements relating to the Company's plans and other aspects of the Company's anticipated future operations, management focus, strategies, financial and operating results and business opportunities. Forward-looking statements typically use words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. In particular, this press release contains forward-looking statements relating, but not limited to:

--  drilling and development plans and anticipated facility upgrades; 
--  capital expenditures; 
--  anticipated exit and average production rates and production mix,
    including performance characteristics of Midway's oil and natural gas
    properties; 
--  anticipated funds from operations for the fourth quarter of 2010 and
    average realized commodity prices; 
--  expectations regarding the completion of the facility upgrades including
    the cost and timing of the upgrades and the anticipated benefits to be
    derived therefrom; 
--  anticipated expenses and other financial and operating results; and 
--  expectations regarding the business environment, industry conditions and
    future commodity prices. 

These forward-looking statements are based on various assumptions including: the outlook for petroleum and natural gas prices; estimated amounts and timing of capital expenditures; the timing, location and extent of future drilling operations; anticipated timing and results of capital expenditures; anticipated on-time performance, pump efficiencies and frac optimization; estimates of future production and operating costs; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; future exchange and interest rates, Midway's ability to obtain equipment in a timely manner to carry out development activities, impact of increasing competition, ability to market oil and natural gas successfully and the ability of Midway to access capital. While Midway considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation: risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; loss of markets; volatility of commodity prices; currency fluctuations; imprecision of reserve estimates; environmental risks; competition from other producers; inability to retain drilling rigs and other services; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; general economic conditions in Canada, the U.S. and globally; and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive.

Although Midway believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not unduly rely on forward-looking statements. The forward-looking statements contained in this news release are made as the date of this new release and the company 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 may be required by applicable securities laws.

Non-GAAP Financial Measures

Midway uses the following terms for measurement within this press release that do not have a standardized prescribed meaning under GAAP and these measurements may not be comparable with the calculation of similar measurements of other entities.

The terms "funds from operations", "funds from operations per share" and "operating netback" in this press release are not recognized measures under Canadian generally accepted accounting principles (GAAP). Management of Midway believes that in addition to net earnings and cash flow from operating activities as defined by GAAP, these terms are useful supplemental measures to evaluate operating performance and assess leverage. Funds from operations per share are calculated using the weighted average shares outstanding used in calculating earnings per share. Users are cautioned; however, that these measures should not be construed as an alternative to net earnings or cash flow from operating activities determined in accordance with GAAP as an indication of Midway's performance.

Midway considers funds from operations to be an important measure of Midway's ability to generate the funds necessary to finance capital expenditures and repay debt. All references to funds from operations throughout this press release are based on cash provided by operating activities before the change in non-cash working capital and actual asset retirement expenditures since Midway believes the timing of collection, payment or incurrence of these items involves a high degree of discretion and as such may not be useful for evaluating Midway's operating performance. Midway's method of calculating funds from operations may differ from that of other companies and, accordingly, may not be comparable to measures used by other companies.

51-101 Advisory

In conformity with National Instrument 51-101, Standards for Disclosure of Oil and Gas Activities ("NI 51-101"), natural gas volumes have been converted to barrels of oil equivalent using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. This ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The estimate of future net revenue presented in this press release does not represent fair market value. Readers are cautioned that the term "boe" may be misleading, particularly if used in isolation.

Filings

Midway has filed with Canadian securities regulatory authorities its unaudited financial statements for the three and six months ended June 30, 2010 and the accompanying Managements' Discussion and Analysis ("MD&A"). These filings are available under Midway's SEDAR profile at www.sedar.com. Full pdf versions of our first half 2010 unaudited financial statements and the accompanying MD&A are available on our website at www.midwayenergy.com.

Information Regarding Midway

Midway Energy Ltd. is a public oil and gas exploration and development company, located in Calgary, Alberta with operations in Alberta and British Columbia. Midway currently trades on the Toronto Stock Exchange (TSX) under the Symbol "MEL".

www.midwayenergy.com