SOURCE: Ethanoil and Gas Corp.

September 24, 2007 07:28 ET

Ethanoil Announces Fuel Cell Initiative

LAS VEGAS, NV--(Marketwire - September 24, 2007) - Ethanoil and Gas Corp. (PINKSHEETS: EGCP) today announced that it has signed a Letter of Intent (LOI) to acquire a majority interest in an advanced fuel cell program. The LOI describes a proposed agreement that provides for Ethanoil and Gas to acquire the rights to develop, manufacture and market the fuel cell and its related technologies. The identities of the other parties to the agreement, the terms of the agreement and technical details of the fuel cell and other technologies will remain undisclosed until a definitive agreement is completed in the days ahead.

The fuel cell program has reached an advanced stage of research, and a multi-cell prototype and its control system have been successfully demonstrated. The fuel cell, which has been the subject of a multi-million dollar research and development program, has already entered the next phase of development at a major institution.

The LOI also describes an agreement by which Ethanoil will secure the exclusive rights to market a new flat-panel rechargeable battery technology in hybrid power system arrangements with the fuel cell. The flat-panel battery technology will enable fuel cell power systems of various outputs to be developed for a broad range of uses and will provide virtually infinite flexibility in the placement and shape of the batteries in its intended applications.

The battery technology is substantially less expensive than most battery solutions and when combined with the fuel cell in hybrid power systems will result in high-output and light-weight systems that will run without interruption over extended periods of time. In a hybrid power system, power for varying demand such as for acceleration or load-lifting is satisfied by the battery while the fuel cell runs at a steady output maintaining the charge on the battery. Such a system is far more responsive to load changes and substantially reduces the size of the fuel cell and battery required, thus lowering power system weight and cost.

Stated Ethanoil President, John N. Davenport, "We looked at a number of alternative energy opportunities but nothing compared to this unique combination of technologies. To be practical and truly portable, fuel cells must be used as part of hybrid systems, and we think we will have the right combination of fuel cell and battery to compete in that market. We see solutions here for personal transportation devices like motorbikes, golf carts and wheelchairs, for quiet and clean auxiliary power supplies for boats and motor homes and for a host of other consumer, industrial and recreational uses.

"In the days and weeks ahead, as we release the details of this transaction and of our objectives and plans for the development and marketing of these technologies, I think shareholders will realize how unique this all will be. Analysts predict that fuel cells will represent a trillion-dollar market in the years ahead. Ethanoil and Gas is taking a bold step to be a significant player in that market."

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.

Safe Harbor Statement:

Except for historical information contained herein, the matters set forth above may be forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ from those in the forward-looking statements. Words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of management, as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors such as the level of business and consumer spending, the amount of sales of the Company's products, the competitive environment within the industry, the ability of the Company to continue to expand its operations, the level of costs incurred in connection with the Company's expansion efforts, economic conditions in the industry and the financial strength of the Company's customers and suppliers. The Company does not undertake any obligation to update such forward-looking statements. Investors are also directed to consider all other risks and uncertainties.

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