SOURCE: Radial Energy Inc.

February 01, 2007 16:30 ET

Radial Energy Management Announces Acquisition of Additional Interest in Huaya Block 100, Peru

HOUSTON, TX -- (MARKET WIRE) -- February 1, 2007 -- Radial Energy Inc. (OTCBB: RENG) announces that Management has successfully negotiated for and obtained an additional 15% increase to its existing interest in the Huaya Block 100 project, increasing its participation from 20% to 23%. Radial will pay $450,000 for the additional participating interest.

The new agreement provides terms and conditions that improve those of the original Joint Operating Agreement (JOA), in particular with respect to future payment terms and increased operational control. With the new terms, Radial will pay $1,000,000 to the Operator (CCP) within 10 days of the completion and successful production testing of the Huaya 100-1X well, and $550,000 upon the successful completion of the next well development well (Huaya 100-2X). The original JOA called for a one time payment of $1,650,000 upon the successful completion and testing of the first well.

In addition, Radial has increased its operational control through the inclusion of a provision whereby, if drilling stoppage occurs, Radial will represent and vote equally with CCP and Zeigler-Peru, Inc. (ZPI) as to the next steps to be taken to complete the initial three wells.

With the additional interest, Radial's gross reserve base, under the Proved Undeveloped category, increases from 3,060,000 net barrels of oil to 3,519,000 for a net increase of 459,000 barrels.

Huaya 100-1X Update:

As previously reported, ZPI located, purchased and shipped to Lima a brand new, unused gear assembly to replace the refurbished gears that failed during the last drilling attempt. The assembly arrived in Lima last Monday, January 29th and is scheduled to be released from customs on Friday, February 2nd. Upon release the assembly will be sent to Atlas-Copco where the assembly will be fitted into the power head. After testing and acceptance of the assembly, the power head is scheduled to be shipped by truck to Pucallpa and then by boat to the site up the Ucayali River for arrival at the site on February 12th. The drilling crew, mud crews and logging crews will arrive to test their respective equipment prior to the anticipated start date for drilling of February 15th. David Jaeger, a drilling expert recently contracted by Radial management, is scheduled to arrive in Lima on February 6th to oversee the assembly of the power head, accompany it to the site and supervise the drilling on behalf of the Company.

Radial Chief Operating Officer Omar Hayes comments, "This agreement reflects our commitment to the excellent potential of the project, so much so that we have, through determined negotiations, obtained a 15% increase of our participation and improved our payment terms. Not only do we feel strongly that we have, in effect, purchased additional proved reserves at a good price, we have also improved our operational and cash flow position. We are excited too that we were able to locate and purchase new, unused gears to replace the damaged ones, and look forward to drilling the remaining 700 feet of hole to total depth."

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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