PRESS RELEASE

(Stock Symbol "CLT" - TSX) October 25, 2011
Calgary, Alberta

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

CELTIC EXPLORATION LTD. CLOSES OVER-ALLOTMENT OPTION Celtic Exploration Ltd. ("Celtic" or the "Corporation") announces that it has closed the sale of an additional 900,000 common shares at a price of $25.00 per share, resulting in gross proceeds of $22,500,000 pursuant to the exercise of the over-allotment option (the "Over-Allotment Option") granted by Celtic to a syndicate of underwriters co-led by FirstEnergy Capital Corp. and RBC Capital Markets and which included CIBC World Markets Inc., GMP Securities L.P., Canaccord Genuity Corp., Peters & Co. Limited, Cormark Securities Inc., Macquarie Capital Markets Canada Ltd., National Bank Financial Inc., Stifel Nicolaus Canada Inc. and TD Securities Inc. (collectively, the "Underwriters"). The Over-Allotment Option was granted to the Underwriters in connection with the Corporation's bought deal prospectus financing of

6,000,000 common shares at a price of $25.00 per share (the "Offering"), which closed on October 7, 2011. The total gross proceeds raised pursuant to the Offering and the Over- Allotment Option was $172,500,000.
The net proceeds from the Over-Allotment Option, being $21,600,000, will initially be used to temporarily reduce indebtedness under existing credit facilities, which may be subsequently redrawn and applied as needed to fund the Corporation's 2011 and 2012 capital exploration and development program, potential acquisitions and for general corporate purposes.
This press release does not constitute an offer to sell or a solicitation of any offer to buy the common shares in the United States. The common shares have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act.

Advisory Regarding Forward-Looking Statements

Certain information with respect to Celtic contained herein, including the anticipated use of net proceeds from the Over-Allotment Option, contains forward-looking statements. These forward- looking statements are based on assumptions and are subject to numerous risks and uncertainties, certain of which are beyond Celtic's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency exchange rate

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fluctuations, imprecision of reserve estimates, environmental risks, competition from other explorers, stock market volatility and ability to access sufficient capital. As a result, Celtic's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur. In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. Celtic does not intend, and does not assume any obligation, to update or revise these forward-looking statements except as required pursuant to applicable securities laws.

For further information, please contact:

CELTIC EXPLORATION LTD., Suite 600, 321 - 6th Avenue SW, Calgary, Alberta, Canada T2P 3H3 David J. Wilson, President and Chief Executive Officer (403) 201-5340, or

Sadiq H. Lalani, Vice President, Finance and Chief Financial Officer (403) 215-5310. Or visit our website site at www.celticex.com.

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