SOURCE: Ethanoil and Gas Corp.

October 03, 2007 10:22 ET

Ethanoil Plans First Phase of Exploration

LAS VEGAS, NV--(Marketwire - October 3, 2007) - Ethanoil and Gas Corporation (PINKSHEETS: EGCP) announced today that it has begun the development of its first Phase of exploration on the Torch Lake Shale Gas prospect. Through its wholly owned Canadian subsidiary, the company has acquired a 100 percent working interest in the petroleum and natural gas rights associated with the 115,272 acre exploratory permit in the Torch Lake area of the Province of Saskatchewan, Canada. The Torch Lake Property is a shale gas prospect located over the northern margins of an ancient inland seaway, the Williston Basin.

Working with its technical advisors, Ethanoil is currently engaged in its drill-site selection process. The company expects to drill at least four exploratory wells in the first phase of the program. Ethanoil has engaged a land agent to acquire the necessary surveying rights as well as negotiate and complete Surface Lease Agreements.

The Torch Lake Project consists of 180 contiguous sections (115,272 acres) of shale gas prospect. The technical report on the Torch Lake Prospect recently released by Ethanoil is in agreement with the exploration results and technical reports of other explorers on similar lands. Ethanoil's technical report states that an average original gas-in-place estimate of approximately 4 Bcf per section can be supported in similar areas that may prove analogous to Ethanoil's lands. If so, based on a 37% recovery rate and using an in situ value of $1 per mcf, the 180 sections to be explored may have a combined value of $270,000,000.

Ethanoil and Gas President John Davenport commented, "We think this is a great time to begin planning our exploration program at Torch Lake. With the cold weather coming, land access is easier and more economical. We're currently selecting our drill targets and once the surface rights are acquired by our land agents, we'll begin to mobilize the appropriate drilling rig and crews to commence drilling."

Continued Mr. Davenport, "At the same time, we think it's prudent to move forward on other fronts. We're actively seeking additional oil and gas acquisitions in Canada and the USA and we look forward to providing corporate updates once they become available."

Ethanoil and Gas Corporation (EGCP) is an independent diversified energy company focused on the development of conventional and alternative energy assets. The management and directors of Ethanoil and Gas recognize that energy delivery to consumer and industrial markets is poised at the edge of several paradigm shifts. Declining conventional energy sources and growing environmental imperatives are driving the development of alternate energy sources and means of delivery. Ethanoil and Gas is focused on the development of long-term, sustainable energy solutions through the cultivation of innovative strategies that directly respond to the most recent developments in the energy and technology sectors.

Resource Potential

Management's estimate of Resource Potential is based on the definition of Undiscovered Resources, which is a recognized category in the Canadian Oil and Gas Evaluation Handbook (COGEH). As defined in the COGEH, "Undiscovered resources are those quantities of oil and gas estimated on a given date to be contained in accumulations yet to be discovered." Management's assessment of resource potential is based on observations of resource extensions from other discovery drill holes in proximity to the lands assessed. There is no certainty that any portion of the resource potential will be discovered and, if discovered, it may not be economically viable or technically feasible to produce. This assessment of resource potential does not constitute an Original Gas in Place (OGIP) estimate. Further drilling and analysis is required to develop an OGIP estimate for these permit lands. The COGEH can be obtained online (

Forward-Looking Information

Except for statements of historical fact relating to the company, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate," "estimate," "potential," "prospective" and other similar words, or statements that certain events or conditions "may," "will" or "could" occur. Forward-looking statements such as the estimate of OGIP and the estimate of resource potential, references to Ethanoil and Gas Corp.'s future drilling program, geophysical programs, testing and analysis programs and timing of such programs are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements, which include but are not limited to risks inherent in the oil and gas industry, regulatory and economic risks, and risks associated with the company's ability to implement its business plan. There are uncertainties inherent in forward-looking information, including factors beyond Ethanoil and Gas Corp.'s control, and no assurance can be given that the programs will be completed on time, on budget or at all. In addition, there are numerous uncertainties inherent in estimating OGIP, including many factors beyond the companies' control, and no assurance can be given that the indicated level of OBIP or the recovery thereof will be realized. In general, estimates of OBIP and resource potential are based upon a number of factors and assumptions made as of the date on which the estimates were determined, such as geological, technological and engineering estimates which have inherent uncertainties. The estimates of OGIP and resource potential are the opinion of an independent National Instrument 51-101 compliant evaluation report at this time. The OGIP estimate for the lands described in this news release may not reflect the same confidence level as estimates of OGIP for Ethanoil and Gas Inc.'s total permit lands, due to the effects of aggregation. Ethanoil and Gas Corp. undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change, except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. The risks and uncertainties set forth above are not exhaustive. Readers should refer to Ethanoil and Gas Corp.'s voluntary disclosure documents available at and for details regarding the location and extent of the Ethanoil and Gas Corp. permit lands.

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