SOURCE: Ethanoil and Gas Corp.

September 13, 2007 11:52 ET

Ethanoil Provides Torch Lake Information

LOS ANGELES, CA--(Marketwire - September 13, 2007) - Ethanoil and Gas Corporation (PINKSHEETS: EGCP) recently released a technical report describing the geology of the company's Torch Lake Shale Gas Project in Saskatchewan, Canada. The Company's holdings at Torch Lake, Saskatchewan lie over the northern margins of the ancient Williston Basin, a major structural element of the North American Great Plains.

A similar technical report commissioned by a Western Canadian junior oil and gas company underscores the potential of shale gas prospects in the northern areas of the Williston Basin. The report reviews certain petroleum and natural gas holdings of that company in east-central Saskatchewan, lands that are in close proximity to the Ethanoil property in the region. The report states potential recoverable gas to be in excess of 1 TCF in the area and that the company in question has over 4 Bcf original gas in place per section. Similar exploration results and analyses indicate over 6 Bcf per section original gas in place (OGIP) in some of these areas. Using a 37% recovery rate, the Prospective Resources are being projected at 1.5 Bcf per section and higher in some other areas. Continued drilling by that company in the north Williston Basin areas and analyses of their core samples are confirming these results.

Ethanoil is greatly encouraged by these results from other explorers in the region. The company's Torch Lake Project consists of 180 contiguous sections (115,262 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 Bcf, the 180 sections to be explored may have a combined value of $270,000,000.

Also, Ethanoil and Gas is cognizant of the rapidly increasing natural gas demand of the Alberta Tar Sands to the northwest of Torch Lake. Canada exports about 1.8 million barrels of oil daily (1.8 mbpd) to the United States, more oil than the USA imports from any other country, including Saudi Arabia (1.5 mbpd). About 1 mbpd of that oil is produced from the Alberta Tar Sands. The complex processes that produce oil from the Tar Sands require over a thousand cubic feet of natural gas for each barrel of oil produced.

Oil production from the Tar Sands will quadruple by 2020 with several projects already under construction. The Tars Sands' oil producers now consume about 4% of Canada's declining gas reserves. Quadrupling the Tar Sands annual oil output will consume 16% of Canada's annual gas production. There will be a desperate need for expanded natural gas reserves in Canada. Some energy market analysts predict that Canada's proven reserves will be depleted by 2015.

Ethanoil's management is of the opinion that natural gas demand and exploration activities must expand in the months ahead. Ethanoil plans to take advantage of current economic conditions and rig availability to explore the company's extensive holdings in a cost-effective manner with the objective of proving a resource at the earliest possible point in the natural gas cycle. Ethanoil and Gas plans to announce its Torch Lake exploration details and schedule in the very near future.

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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