SOURCE: Radial Energy Inc.

November 08, 2006 16:30 ET

Radial Energy Announces Reserve Assessment for Bosques Block, Colombian Oil Project

HOUSTON, TX -- (MARKET WIRE) -- November 8, 2006 -- Radial Energy Inc. (OTCBB: RENG) is pleased to report the results of a reserve assessment on the Bosques Block completed by Gustavson Associates. The assessment was requested by the Company as part of an on-going due diligence of rights to explore and develop in the area contemplated by the Letter of Intent ("LOI") executed on August 24, 2006 with Maxim Well Services Ltd. In the report, Gustavson estimates that 1,100,000 gross barrels of proven oil reserves remain to be produced from a field on the block, currently defined by two recently shut-in wells. Of these proven reserves, 550,000 barrels are classified as proved non-producing and 550,000 barrels are classified as proved undeveloped.

The report also estimates proved plus probable reserves of 2,300,000 barrels and proved, probable plus possible reserves of 4,100,000 barrels.

Based on the positive results of the third party reserve assessment, the Company is proceeding with negotiations to execute a definitive Joint Operating Agreement (JOA).

The Bosques Block covers approximately 9,000 hectares (22,239 acres) and is located in the prolific Middle Magdalena Valley of Colombia. The Company intends to acquire a 20% working interest in the rights to explore and develop oil reserves in the block in return for 2.2 million dollars to be paid in stages beginning after the execution of the JOA. In addition, according to the LOI, the Company is entitled to 33.3% of the revenues (until payout of the first $1,500,000 advanced by the Company) from the production of oil following the reactivation of the two wells that were assessed in the Gustavson report. The reactivations of these wells are the first scheduled activities on the block and are expected soon after the execution of the JOA and will cost approximately $800,000.

The concession is described as an "Exploration and Production Area" with approximately 3,000 hectares within the block already designated as "commercial," with the two shut-in wells having produced 1.08 million barrels from 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. According to the Gustavson report, combined producing rates after reactivation are estimated to be between 300 and 400 barrels of oil per day.

Nine (9) total wells, including the two wells scheduled for reactivation, were drilled on the block. Several of the wells tested oil and/or had shows of oil in the Tertiary formations. The Company has also engaged Gustavson to assess the exploration potential of the Tertiary and Cretaceous formations on the block.

Company President G. Leigh Lyons states, "With the execution of a Joint Operating Agreement, Radial will have taken another positive step in the execution of its strategy for Latin America. We are pleased that the independent reserve assessment has confirmed our initial assertion that significant oil reserves remain to be produced in the Bosques Block. The Bosques Block not only offers early cash flow opportunities but also displays exploration opportunities in the Tertiary and Cretaceous formations.


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.

About Radial Energy Inc. (OTCBB: RENG)

Radial Energy identifies, acquires and develops low risk oil and natural gas exploration and development opportunities throughout the Americas. The company's innovative strategy involves targeting overlooked or under-developed reserves that are under the radar of multinational oil companies and out of the reach of small independents.

Radial Energy has rapidly assembled an impressive portfolio of oil and gas plays including working interests in two separate oil and gas prospects located in Cherokee County, Texas as well as in the Block 100 oil project located within the Huaya Anticline area in the Ucayali Basin of eastern Peru. The company has also executed a Letter of Intent to acquire rights to explore and develop oil reserves on the Bosques Block play located in the prolific Middle Magdalena Valley of Colombia. The Company targets prospective oil and natural gas opportunities in historically productive regions with a primary focus on identifying previously drilled but undeveloped exploratory wells that, due to factors at the time of initial drilling including the absence of pipeline infrastructure, lack of modern recovery technology, poor geological or engineering interpretation or low oil and gas prices, were not fully exploited.

Radial Energy is led by a highly motivated team of industry veterans with proven expertise in North, Central and South American oil and natural gas development. Bolstered by first-rate management, farsighted acquisitions, the speed and agility to take advantage of changing market conditions, a firm commitment to building value for shareholders and the growing demand for energy worldwide, Radial Energy is taking maximum advantage of a tremendous opportunity to develop overlooked and under-developed oil and gas reserves in North and South America.

Forward-Looking Statements

Except for statements of historical fact, the information presented herein contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include the statements regarding the Company's expectations, hopes or intentions regarding the future. 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 the ability to successfully negotiate the terms of the JOA with Maxim on terms and conditions acceptable to the company, the satisfaction of further due diligence regarding the Tertiary and Cretaceous formations on the block, the ability of the company and its partners to reactivate the first two wells in the manner and at costs currently expected, general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund future operations, including those required under the LOI, 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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