SOURCE: Ethanoil and Gas Corp.

September 20, 2007 16:28 ET

Ethanoil and Gas Announces Retirement of 125 Million Shares

LAS VEGAS, NV--(Marketwire - September 20, 2007) - Ethanoil and Gas Corp. (PINKSHEETS: EGCP) is pleased to announce that affiliates of the company have retired 125,000,000 common shares of the company's currently outstanding stock.

Mr. John N. Davenport, President and CEO of Ethanoil and Gas, stated: "We believe that the retirement of these shares will add significant value for our shareholders. We have begun the implementation of what we think is a strong business plan. This restructuring will position our shareholders to more fully benefit from the successful execution of that plan."

EGCP recently announced that, based on a recently released Technical Report, the Company's Torch Lake Project consisting of 115,262 acres (180 sections) may have a potential combined value of $270,000,000 using a 37% recovery rate and an in situ value of $1 per mcf. The Technical Report can be viewed at www.ethanoilandgas.com.

Ethanoil and Gas Corporation (EGCP) is an independent 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 (www.petsoc.org).

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 www.pinksheets.com and for details regarding the location and extent of the Ethanoil and Gas Corp. permit lands.

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