SOURCE: Radial Energy Inc.

March 01, 2007 09:25 ET

Radial Energy Cancels Debenture -- Provides Update on Rancho Hermoso Acquisition Plans

HOUSTON, TX -- (MARKET WIRE) -- March 1, 2007 -- Radial Energy Inc. (OTCBB: RENG) ("Radial" or the "Company") wishes to advise that Radial Energy Inc. (OTCBB: RENG) and Cornell Capital Partners, LP have negotiated an agreement to pay out the $5,000,000 convertible debenture financing previously announced on October 5, 2006. This agreement is subject to a final definitive agreement to be completed by both parties.

To date, Radial has received from Cornell $3.5 million of the $5.0 million available under the convertible debenture and has cancelled the remaining tranche of $1.5 million, which was contingent upon effective registration of the SB-2 filing with the Securities and Exchange Commission ("SEC") on February 20th, 2007. Radial, with permission from Cornell, has sent written notification to the SEC of their intent to cancel the SB-2. Radial management is in advanced negotiations to obtain debt financing for its purchase of 100% of the shares of Rancho Hermoso S.A. and intends to seek alternative fixed priced financing for the balance of the acquisition and near term capital expenditures.

Radial President Leigh Lyons comments, "Cornell Capital has been a tremendous help to our company during the early stages of our development. With their assistance Radial has been able to execute the first stage of our strategy. However, with our recently announced intention to acquire Rancho Hermoso we have entered into Stage 2 of our strategy, and in so doing have positioned the Company to obtain traditional debt and fixed price financing."

About Rancho Hermoso

Rancho Hermoso S.A. is a privately held Colombian oil production company and operator of two oilfields located in the Casanare department of Colombia. The Rancho Hermoso and Entrerrios fields are geologically located in the Llanos Basin, one of the most prolific hydrocarbon producing areas of South America including the giant Cano Limon and Cusiana/Cupiagua fields.

Ecopetrol discovered the Rancho Hermoso field in 1983 with production of 37 API oil from the Mirador formation beginning in May 2000. The contract with Ecopetrol, which covers 24,167 acres, is classified as a Production Contract, which specifies a "tariff" or production payment payable to Rancho Hermoso in exchange for operating the field and paying 100% of all costs. Cumulative production through July 2006 is 7,166,792 barrels, from three Mirador wells, with July production at 2,827 BOPD.

Nearby, the Entrerrios field began production in May 2004. Rancho Hermoso S.A. owns 60% of the rights to the Production Contract for this 14,920-acre area that provides for production sharing of the oil, with varying percentages for the Mirador and Ubaque formations that are producing from depths of between 8,950 and 9,650 feet. Cumulative production through September 2006 is 286,530 barrels from the Mirador and 351,828 barrels from the Ubaque formation. Production rates for the two producing wells in the field were 762 BOPD and 324 BWPD from the Mirador, and 1,445 BOPD and 115 BWPD from the Ubaque formation.

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.

The Company targets prospective oil and natural gas opportunities in historically productive regions with a 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 drill and complete wells such as the Huaya 100-1X well, general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund future 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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