Calgary, AB, September 25, 2003 - Cell-Loc Inc. (“Cell-Loc” or the “Company”) (TSX: CLQ) announced today that it has entered into an agreement with an investor group led by Grant Billing to recapitalize and reorganize its business. Pursuant to the agreement, Cell-Loc’s existing technology assets will be transferred to a subsidiary company (“Techco”), all of the shares of which will then be distributed to Cell-Loc’s existing shareholders (on a share-for-share basis), all pursuant to a statutory Plan of Arrangement. As part of the transaction, Techco will seek a public listing on the TSX Venture Exchange. Existing shareholders of Cell-Loc will thereby receive shares of a new entity that will own all of the existing technology assets on a debt-free basis.  The Company will be transformed into an oil and gas exploration and development company to be called Capitol Energy Resources Ltd. (“Capitol Energy”). It is expected that Capitol Energy will make the appropriate applications to have its listing move from the TSX to the TSX Venture Exchange, as part of this transaction.

The investment group will provide $4.9 million to pay existing liabilities of Cell-Loc and to recapitalize Techco and Capitol Energy going forward. By way of this transaction, Cell-Loc shareholders will not only retain their current ownership positions in the technology enterprise but will also obtain a significant interest in Capitol Energy’s equity. In this fashion, Cell-Loc’s shareholders will be able to participate in the value realized from Cell-Loc’s existing tax pools, a value Cell-Loc could not itself capture.

This restructuring will be accomplished through a Plan of Arrangement to be approved by the Court of Queen’s Bench of Alberta and Cell-Loc securityholders (by a majority of at least two-thirds of the securityholders voting). The transaction is also subject to all necessary regulatory approvals and the receipt by the Independent Committee of the Board of Directors of the Company (the “Independent Committee") of a favorable fairness opinion to be provided by an independent third party financial advisor. Subject to those conditions, the Independent Committee has recommended the transaction as being in the best interests of the Company and its shareholders, and the full Board of Cell-Loc has unanimously approved the transaction.

In addition to receiving Cell-Loc’s existing technology assets, Techco will receive a cash injection of an estimated $2.5 million after all existing current trade payables related to the Company’s technology business have been retired using the proceeds designated for that purpose from the capital raised in the transaction. Following the restructuring, Techco will therefore enjoy a fresh start, owning all of Cell-Loc’s existing technology assets, having no debt and being funded with an estimated $2.5 million of cash to implement its business plan. The current Directors of Cell-Loc will form the new Board of Directors for Techco. It is also anticipated that the existing senior management of Cell-Loc will comprise the management team of Techco.

Don Romaniuk, current Chairman of Cell-Loc, commented, “This is a tremendous opportunity for Cell-Loc shareholders. Having an interest in the newly formed oil and gas company as well as maintaining our current share structure in a new publicly listed entity, with no debt, and significant working capital creates immediate shareholder value and at the same time allows the Company to accelerate the commercialization of its promising technology.”

Upon closing, Techco will substantially maintain the capital structure which Cell-Loc currently has, being approximately 33 million common shares (on a non-diluted basis), while the continuing company, Capitol Energy, will have its capital structure reorganized in this transaction by way of the issuance of approximately 114 million new voting and non-voting shares in consideration of the $4.9 million of new capital at a subscription price of $0.0429 per share. The Company will retain an estimated $1 million of these funds for working capital. After the restructuring Capitol Energy will then have approximately 60 million voting shares and 90 million non-voting shares outstanding. The proposed new Board of Directors for Capitol Energy is Grant Billing (Chairman), John Brussa, John Budreski, Jim MacDonald and Sheldon Reid.  Mr. Reid, the current CEO of Cell-Loc, will join the Board of Capitol Energy, which is intended to assure protection of Cell-Loc’s shareholder interest in the new entity. Capitol Energy will therefore commence business with a working capital surplus of $1 million of cash and approximately $70 million of tax pools. The Board of Directors intends to recruit a new management team for Capitol Energy in conjunction with reviewing potential acquisitions of suitable oil and gas assets to initiate operations.

Grant Billing, prospective Chairman of Capitol Energy, stated, “This is an exciting opportunity for the new company as well as for Cell-Loc’s existing shareholders. We have a committed Board who are investing a substantial portion of the new capital to launch the restructuring and have a wealth of knowledge in the oil and gas exploration and production business as well as expertise in raising capital and securing investment opportunities. Opportunities for growth in the oil and gas business are favorable as the industry continues to evolve with the realignment of assets within the sector. Our tax position will certainly provide us with a competitive advantage. We are confident that we can attract a high caliber of experienced personnel capable of developing Capitol Energy as a successful oil and gas company.”

A Special Meeting of the shareholders of Cell-Loc will be convened to approve the Plan of Arrangement. The Information Circular and proxy materials for this meeting are expected to be mailed to shareholders during the week of October 20, 2003, with the shareholder meeting to approve the Arrangement being scheduled for the week of November 24, 2003.

Interested parties are invited to contact Tammy Yamkowy, Director, Investor Relations of Cell-Loc, at 403.569.5748.

About Cell-Loc Inc.
Cell-Loc Inc. (www.cell-loc.com), a leader in the wireless location industry, is the developer of Cellocate^TM, a family of network-based wireless location products that enable location-based services. Located in Calgary, Alberta, Cell-Loc currently develops, markets and supports its patented wireless location technology in Asia as well as North and South America, with a view to expanding globally. Cell-Loc is listed on the Toronto Stock Exchange (TSX) under the trading symbol: "CLQ."

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