SOURCE: Radial Energy Inc.

August 29, 2006 09:00 ET

Radial Energy Signs LOI to Acquire Rights at Bosques Block Project in Colombia

BELLINGHAM, WA -- (MARKET WIRE) -- August 29, 2006 -- Radial Energy Inc. (OTCBB: RENG) (the "Company") wishes to advise that on August 24th, 2006 the Company executed a Letter of Intent ("LOI") with Maxim Well Services Ltd. ("Maxim") to acquire rights to explore and develop oil reserves and production on the 9,000 hectare (22,239 acre) "Bosques Block" located in the prolific Middle Magdalena Valley of Colombia.

The Company has acquired a 20.0% working interest in the block in return for 2.2 million dollars to be paid in stages beginning after the execution of a joint operating agreement (JOA), which is expected to be signed within 45 days. In addition, the company is entitled to 33.3% of the revenues from the production of oil following the reactivation of two wells until payout of 1.5 million dollars of the original investment.

The concession is described as an "Exploration and Production Area" with approximately 3,000 hectares within the block already designated as "commercial." According to Maxim, the wells have produced 1.08 million barrels and the Company believes that 2.2 to 3.8 million barrels remain to be recovered based on expected oil recovery factors for the Tertiary reservoir. The Company and its new partners intend to reactivate the wells by workovers of the existing zones and by perforating new intervals in the Tertiary formations with higher density perforations. Maxim's internal estimates show combined producing rates after reactivation are 300-400 barrels of oil per day.

The field was discovered in 1957 by Shell Oil. Nine (9) total wells were drilled on the block. Several of the wells tested oil and/or had shows of oil in the Tertiary formations.

The Company has engaged Gustavson and Associates to review the asset and provide a reserve report and assessment of the property. Maxim is transferring all information and data regarding the block to Gustavson and will be sending a team to Gustavson's offices in Boulder within one week to assist in this work.

Company President, G. Leigh Lyons, states, "We are pleased to continue our strategy for Latin America, and especially pleased to enter into Colombia with the acquisition of such a high potential area. The Bosques Block not only offers early cash flow opportunities but also displays tremendous exploration opportunities in the Tertiary and Cretaceous formations. The Cretaceous targets in particular are very exciting, seismically-defined closures in an oil and gas rich basin, famous for having one of the most prolific oil source rocks in the world (La Luna). The Cretaceous play has gained momentum with a discovery well drilled by Ecopetrol to the northeast of our block last year with an estimated 34 million barrels of high quality oil recoverable."


Maxim is a Colombian company that provides operating and engineering services for the oil industry; its main activity is to provide equipment for well test production services, hydrocarbons treatment and transportation, as well as the design, construction and operation of the production facilities. Design, installation and operation of artificial lifting in oil wells, Data acquisition, processing and interpretation obtained from Pressure Tests, production Logs, Drilling, and other means including cased hole logs.


Radial Energy seeks to identify, acquire and develop low risk oil and natural gas exploration and development opportunities throughout the Western Hemisphere. In addition to the United States and Canada, the Company is currently focusing on Peru and Colombia, as these countries represent what Management believes are regional first-tier competitive business prospects with tremendous investment incentives for oil and gas companies. Management has analyzed the business climate and believes that factors such as lower production taxes and government takes, alongside extensively improved civil and social conditions provide for significant opportunities with limited risk. The Company intends to remain flexible and will pursue opportunities as they arise in other stable, foreign investment-friendly countries, both regionally and elsewhere in the Americas.

The Company's primary focus is on efforts to identify previously drilled, but subsequently abandoned exploratory wells that encountered and/or tested live oil or natural gas indicating the presence of marketable hydrocarbons, reservoir and trap. If, after careful study, it is determined that low-risk potential for profitable field development exists, the Company will seek to acquire a working interest in the project, dealing either with the current concession holders or the local government.

The Company plans to become the operator of record in the majority of its future projects. Management intends to participate in new exploration prospects and old field development opportunities if such investments fit the economic criteria established by the Company.

Forward-Looking Statements:

Except for statements of historical fact, the information presented herein may contain forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund operations and changes in consumer and business consumption habits and other factors over which Radial Energy Inc. has little or no control.


Radial Energy Inc.


G. Leigh Lyons, President

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