TMX group

At the request of the TSXV Market Regulation Services, the following
language has been deleted from this news release: "Internal, un-audited
reserve projections for the 40 locations are 4 billion cubic feet."  As per
TSE Venture guidelines: "Reserve estimates for disclosure must be made by an
independent qualified evaluator."  The company hereby retracts this statement
regarding reserve estimates from the 40 Powder River locations.  The corrected
release follows in its entirety.


      Storm Cat Energy Corporation Provides Operational Update;
      Completes Powder River and Fayetteville Shale Acquisitions

CALGARY, Alberta and DENVER, May 16 /CNW/ -- Storm Cat
Energy Corp. (TSX.V: SME) today provided an update on the Company's U.S. and
Canadian operations.  It also announced the closing of two mineral leasehold
acquisitions.  The highlights of the Company's operations and details of the
transactions are included below.

Powder River Basin

  Storm Cat's current production is approximately 4.2 million cubic feet
   per day (MMcfd) from 140 wells on its Powder River Basin properties.

  Activity in the Powder continues at a brisk pace.  Drilling with three
   rigs will continue and a fourth rig will be added in as needed.  The
   Company currently is experiencing an average cycle time from spud to
   first production of 15 days.  This is a strong cycle time by industry
   standards.

  In early May, Storm Cat closed a mineral leasehold transaction in the
   Powder River Basin, Campbell County, Wyoming, with two private
   companies.  The acquisition includes a 90% working interest in
   3,942 gross / 3,548 net undeveloped acres.  As consideration, Storm Cat
   paid 50% in cash at closing and the private companies retain a carried
   interest as to capital costs covering their 10% working interest to be
   paid over a period of 18 months after closing.  The acquisition expands
   Storm Cat's core Powder River operating area by providing up to an
   additional 40 gross multi-seam locations prospective for CBM
   development drilling based on 80-acre spacing.  The leasehold consists
   of primarily federal lands.

Elk Valley, British Columbia

  The Company finished completing the a-84-L and the d-85-L wells drilled
   in December 2005.  The a-84-L well, completed in the "F," "G" and "H"
   coal seams by fracture stimulating down casing, has been on production
   for 60 days.  Initial production rates have been as high as 203
   thousand cubic feet per day (Mcfd).  The d-85-L well was completed in
   the "G" through "L" coal seams by fracture stimulating down coil tubing
   in eight separate stages.  The well has produced for 42 days at initial
   rates as high as 162 Mcfd.  Preliminary results and evaluation by Storm
   Cat engineers are showing better per-well performance than models
   predicted.

  Storm Cat re-activated three wells shut-in by the previous operator.
   The three wells are producing a combined 150 Mcfd.  Company engineers
   are again encouraged by initial results from the wells which are
   performing as expected at this stage of production.

  Based on the results to date, six wells are being licensed to target
   both the upper and lower Mist Mountain coal sections with expected
   initial spud dates of mid-June to early July, subject to rig
   availability.  An additional six drilling locations are currently being
   considered for drilling in the late fall. In addition, engineering
   services to aid in the design of compression and related facilities are
   being evaluated.

Fayetteville Shale / Other Projects
In early May, Storm Cat closed a $2 million transaction in the
Fayetteville Shale play in Arkansas with two private operators.  Storm Cat
acquired a 100% working interest (80% NRI) in approximately 16,166 gross
undeveloped acres and 12,034.53 net mineral acres in Van Buren, Pope and
Searcy Counties, Arkansas at a cost per net mineral acre of $166.  The
acquisition marks Storm Cat's entrance into the active Fayetteville Shale
play.  Storm Cat intends to opportunistically lease in the area to consolidate
the existing acreage block.  The Company is identifying potential drill sites
and is determining a prudent drilling program to assess productive potential
from its leasehold.
Storm Cat completed the drilling operations of three wells on its Moose
Mountain Saskatchewan prospect. Each of the wells encountered greater than 20
metres of potential pay in the Second White Specks Formation. Completion
operations will commence once wet ground conditions allow for access.
Storm Cat was a successful bidder at April and May Alberta Crown land
sales acquiring 7,680 acres in the Wainwright area.  The lands are prospective
for gas from the Mid-Mannville coal which is 4 to 5 Meters thick and suitable
for horizontal drilling.  Storm Cat's acreage position in the Mannville coal
fairway is 15,508 gross (13,516 net) acres.
At March 31, 2006, Storm Cat was the operator of approximately 380,850
gross (159,200 net) acres in North America.

Management Commentary
J. Scott Zimmerman, President and Chief Executive officer said: "Closing
the two leasehold acquisitions adds critical mass to our Powder River core
area and provides Storm Cat with a foothold in an emerging shale play.  We
will evaluate other operators' progress in the Fayetteville Shale to best
determine the next steps in developing or monetizing the Fayetteville asset.
The attractive acquisition cost basis provides us with flexibility while we
assess the play.  We continue to make progress in Elk Valley and anticipate
spudding the next set of wells in the late second to early third quarter.
Monitoring production from re-entries and new wells will allow engineers to
better understand reservoir characteristics in what we believe is an area with
vast resource potential."

About Storm Cat Energy
Storm Cat Energy is an independent oil and gas company focused on the
pursuit, exploration and development of large unconventional gas reserves from
fractured shales, coal beds and tight sand formations.  The Company has
producing properties in Wyoming's Powder River Basin, exploration and
development acreage in Canada and Alaska, and high-risk, high-reward
exploration acreage in Mongolia.  The Company's shares trade on the American
Stock Exchange under the symbol "SCU" and in Canada on the TSX Venture
Exchange under the symbol "SME."

By Order of the Board of Directors
Storm Cat Energy Corporation

J. Scott Zimmerman
President and Chief Executive Officer

/s/ J. Scott Zimmerman

Forward-looking Statements
CAUTIONARY STATEMENT: This publication contains certain "forward-looking
statements", as defined in the United States Private Securities Litigation
Reform Act of 1995 relating to matters such as the Company's drilling and
other exploration plans and projected well economics.  Forward-looking
statements are statements that are not historical facts; they are generally,
but not always, identified by the words "expects," "plans," "anticipates,"
"believes," "intends," "estimates," "projects," "aims," "potential," "goal,"
"objective," "prospective," and similar expressions, or that events or
conditions "will," "would," "may," "can," "could" or "should" occur.
Forward-looking statements are based on the beliefs, estimates and opinions of
Storm Cat's management on the date the statements are made; they involve a
number of risks and uncertainties.  Consequently, there can be no assurances
that such statements will prove to be accurate and actual results and future
events could differ materially from those anticipated in such statements.
Storm Cat undertakes no obligation to update these forward-looking statements
if management's beliefs, estimates or opinions, or other factors, should
change.  Factors that could cause future results to differ materially from
those anticipated in these forward-looking statements include, but are not
limited to the volatility of natural gas prices, the possibility that
exploration efforts will not yield economically recoverable quantities of gas,
accidents and other risks associated with gas exploration and development
operations, the risk that the Company will encounter unanticipated geological
factors, the Company's need for and availability of additional financing, the
possibility that the Company may not be able to secure permitting and other
governmental clearances necessary to carry out the Company's exploration and
development plans, and the other risk factors discussed in greater detail in
the Company's various filings on SEDAR (www.sedar.com) with Canadian
securities regulators, including the Company's Form 20-F filed April 6, 2006,
and its filings with the US Securities and Exchange Commission.

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            FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.