SOURCE: Tekoil & Gas Corporation

January 12, 2007 08:30 ET

Tekoil/Ptarmigan Pay Deposit to Extend Newfoundland Lease

THE WOODLANDS, TX -- (MARKET WIRE) -- January 12, 2007 -- Tekoil & Gas Corporation (the "Company" or "Tekoil") (PINKSHEETS: TKGN) announced today, further to its press release of January 04, 2007, that it has paid the $250,000 Canadian dollars required under the terms of the Farmin Agreement with Newfoundland & Labrador based Ptarmigan Resources Limited ("Ptarmigan"), who in turn have paid a $250,000 refundable deposit to the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) to extend offshore Exploration License EL-1069 ("License"), situated just North of the Port au Port peninsula in western Newfoundland.

The drilling deposit along with other guarantees in place, extend "Period I" of the License for one year until January 15, 2008. This extension will allow the License partners to drill a well as approved by the C-NLOPB to test a structure mapped from seismic and other geological data. Upon completion of the well and acceptance by the C-NLOPB, the License will move to "Period II," and will remain in effect until January 15, 2011.

During the term of the Exploration License, and upon discovery by drilling of hydrocarbons that are deemed commercial, the License holder has the exclusive right to apply to the C-NLOPB for a Significant Discovery License (SDL). Current regulations on SDLs allow the SDL grantee to hold the SDL without term at an accelerated rate of annual rentals. The holder of the SDL further has the exclusive right to apply for a Production License for the SDL at any time following the granting of the SDL. The License covers approximately 140,000 hectares or 346,500 acres of offshore surface area, is located in the shallow waters of the Gulf of St. Lawrence, and is strategically positioned close to the markets of eastern Canada and the northeastern United States.

About Tekoil & Gas Corporation:

Houston-based Tekoil & Gas Corporation is a technology-driven company focused on the development, acquisition, stimulation, rehabilitation and asset improvement of small to medium-sized oil and gas fields. The combination of energy fuel reserves and advanced yield technologies are anticipated to generate value for Tekoil and its stakeholders, as the company targets above average growth in the 21st century energy sector. Additional news and information will be made available on the Tekoil website at and through further press releases as Tekoil's plans are executed.

About Ptarmigan Resources Limited:

Ptarmigan Resources is a privately held, junior oil and gas explorer headquartered in St. John's, Newfoundland and Labrador. Ptarmigan was founded in 2001 and in 2002 bid on and was awarded 100% interest in Exploration License 1069 by the Canada - Newfoundland and Labrador Offshore Petroleum Board. Ptarmigan also holds an interest in four other C-NLOPB offshore Exploration Licenses in the Gulf of St. Lawrence through its 8% ownership in NWest Energy Inc. Ptarmigan's technical team is especially focused on the Cambro-Ordovician carbonates and clastics in the foreland basin to the west of the Appalachian Mountains in Newfoundland.

Forward-Looking Statements:

This news release may contain certain forward-looking statements, including declarations regarding Tekoil and its subsidiaries' expectations, intentions, strategies and beliefs regarding the future within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements contained herein are based upon information available to Tekoil management as at the date hereof, and actual results may vary based upon future events, both within and without the control of Tekoil management, including risks and uncertainties that could cause actual results to differ materially including, among other things, the impact that acquisitions may have on the company and its capital structure, exploration results, market conditions, oil and gas price volatility, uncertainties inherent in oil and gas production operations and estimating reserves, unexpected future capital expenditure requirements, competition, governmental regulations and other factors, some of which are set forth in Part I, Item 2, of Tekoil's registration statement on Form 10-SB.

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