SOURCE: Treaty Energy Corporation

September 16, 2010 09:45 ET

Treaty Energy Reports Progress on Tennessee Oil Leases

Treaty Intends to Drill up to 40 Wells on Its Tennessee Leases, and Expects These Wells to Be Very Productive

HOUSTON, TX--(Marketwire - September 16, 2010) - Treaty Energy Corporation (OTCBB: TECO), a growth-oriented energy company in the oil and gas industry, with the intention of full transparency, is today releasing the latest information available on its three wells in Pickett County Tennessee. The three letters/reports below are exactly as written by John Barksdale, President of Treaty Energy, and delivered to Andrew Reid, Chairman and CEO of the company. 

In addition, there is a fourth letter/report from James Washburn, a professional geologist used by Treaty Energy, to John Barksdale, giving his professional opinion on the Herbert Q. Groce #1 well.

The four letters/reports from Mr. Barksdale and Mr. Washburn, the geologist, are as follows:

1. -- Letter/Report on ROBIN MOODY WELL #1 - Pickett County, TN        
          
ROME OIL DEVELOPMENT CORPORATION         
1620 Clintonville Road         
Winchester, KY40391        
          
September 6, 2010         
          
Mr. Andrew Reid         
Treaty Energy Corporation         
201 St. Charles Ave, Suite 2534         
New Orleans, LA 70170        
          
RE: ROBIN MOODY WELL #1 - PICKET COUNTY, TN         
          
Dear Andrew,         
          
We recently re-opened the Robin Moody well #1 and placed it into oil production.         
          
It is being pumped by a pumping unit equipped with a 5 HP electric motor and a timer to allow pumping of the well at various intervals throughout the day.  Oil production has decreased to approximately 2 barrels of oil per day.  Re-acidizing may more successfully re-open a conduit from the well bore to the oil reservoir.  The skin of the well bore may have been contaminated by cement when the well was plugged and abandoned.
          
It is producing live gassy crude from the Wells Creek formation at 1820-1824 feet.  According to the records of the Tennessee Geological Survey this well initially produced 10 barrels of oil per day after it was acidized.      
          
It is my opinion that we should remove the tubing and rods from the well and run a video log in the well in order to view all oil and gas entries into the well bore.  There may be other oil and entries in the well that may respond favorably to an acid treatment, however, current information about the well presently dictates re-acidizing the Wells Creek at 1820-1824 feet.      
          
If the re-acidizing is successful, oil production rates may be increased to 5-10 barrels of oil per day.  At current crude oil prices of $65-$70 per barrel, this should be a good well.      
          
Sincerely,         
          
/s/ John H. Barksdale         
John H. Barksdale         
President         

2. -- Letter/Report on JOSEPH SCHWALLIE WELL #1 - Pickett County, TN

ROME OIL DEVELOPMENT CORPORATION
1620 Clintonville Road
Winchester, KY 40391

September 6, 2010

Mr. Andrew Reid
Treaty Energy Corporation
201 St. Charles Ave, Suite 2534
New Orleans, LA 70170

RE: JOSEPH SCHWALLIE WELL #1 - PICKETT COUNTY, TN

Dear Andrew,

We recently re-opened the Joseph Schwallie well #1. We are pumping it intermittently with a pumping unit equipped with an 8 HP gasoline motor. To date we have been pumping water with small crude oil shows. Originally, this well was drilled too deep into a water zone. Now the well is plugged back to 1850 feet which is just below the Wells Creek formation that shows a high porosity zone at 1800-1805 feet. I believe that water invaded this zone from the lower zone before it was plugged back. The pumping that we have done has decreased the water volume and increased the oil shows to date.

The well was never acidized, It is running level with the Robin Moody #1 in the subsurface on the Wells Creek formation and should eventually produce crude oil if acidized. The Robin Moody #1 is currently producing Wells Creek oil.

Of greater significance in regard to additional oil production from this well is a porosity zone in the Murfreesboro formation at 1600-1625 feet. When acidized this zone frequently produced large volumes of oil, i.e. 25-100 barrels of oil per day.

I plan to remove the tuning and rods from the well and run a video log in the well to pinpoint all oil and gas zones. After viewing the video we will decide which zone ma respond favorably to acidizing.

Depending on which zone we acidize, the oil production rates could range from 5-50 barrels of oil per day. At $65-$70 per barrel this could be a very good well.

Sincerely,

/s/ John H. Barksdale
John H. Barksdale
President

3. -- Letter/Report on HERBERT Q. GROCE WELL #1 - Pickett County, TN

ROME OIL DEVELOPMENT CORPORATION
1620 Clintonville Road
Winchester, KY 40391

September 6, 2010

Mr. Andrew Reid
Treaty Energy Corporation
201 St. Charles Ave, Suite 2534
New Orleans, LA 70170

RE: HERBERT Q. GROCE WELL #1 - PICKETT COUNTY, TN

Dear Andrew,

The Herbert Q. Groce well #1 was recently re-opened and bailer-tested. We ran a video log in the well. A small amount of oil was found in the well.

The Wells Creek porosity zone in this well ran approximately 70 feet lower than the same zone in the Robin Moody #1 and the Joseph Schwallie #1.

A thin zone at 1126 feet showed minor amounts of oil and gas. This in the Stones River formation. We sent the video to a consulting geologist for review and to seek his opinion as to whether we should acidize this zone. He advised against it. His well report is enclosed.

Therefore, we plan to plug and abandon the well.

Sincerely,

/s/ John H. Barksdale
John H. Barksdale
President

4. -- Letter/Report from James D. Washburn on HERBERT Q. GROCE WELL #1 - Pickett County, TN

JAMES D. WASHBURN - PROFESSIONAL GEOLOGIST, TNO 268
736 Contraband Lane, Cookeville, Tennessee 38501

August 24, 2010

Mr. John Barksdale
Rome Oil Development Corporation
1065 Dove Run Road, Suite 4
Lexington, KY 40502

RE: Herbert Q Groce #1, permit # 12,078, located in Sections 15, A, 54 East, 460 FSL,1690 FWL, Moodyville Quadrangle, Pickett County, Tennessee, Elevations: 986.3' AMSL.

Dear Mr. Barksdale:

As per your request I reviewed the Down-Hole Video cameral log, and an E-Log with Compensated Density, Density Porosity, Neutron Porosity, Gamma Ray, Temperature, and Caliper Log. Which you provided to me, of the Herbert Q. Groce #1, permit # 12,078.

This well, is a re-entry of permit # 9249, a well originally drilled by Ohio-Kentucky Oil Corporations in 1998. The total depth of the well according to the E-Log was 1969'. The video cameral log went down to 1916', where the fluid level was in the well bore. The well bore was coated with oil and water, probably from re-entry operations by the drill rig. Several small hydrocarbon entries were seen, none with any significant volume. Two entries at depth 938' in the Sunnybrook section of the Nashville Group, and depth 1540', in the Murfreesboro section of the Stones River Group appeared to have very slight amount of water coming in. The entry at depth 1126' which you asked me to look closely at, is from the most common pay zone section of the Stones River Group. This section has produced oil in several wells in Tennessee and Kentucky, usually where the geologic structure is either very high, with a water drive, or very low with a gravity drive. In this case the structure of this well is neither fish nor fowl, i.e. it is not high or low, but somewhere in between. The entry looked to be mostly gas with only a slight amount of oil. To this Geologist's knowledge there are no nearby wells which produce from this zone. The E-Log shows a porosity zone in the Knox formation at depth of 1870' to 1882'. The cameral log showed no significant hydrocarbon entry at this level. None of the entries looked significant enough to treat.

This Geologist does not recommend treating this well, a treatment job on this well might make it produce oil at commercial rates, but it is unlikely.

Formation Tops: Fort Payne 265' Chattanooga Shale 390', Stones River 1012' Pencil Cave 1019', Murfreesboro 1446', Knox 1854'.

RESPECTFULLY SUBMITTED

/s/ Jim D. Washburn
JAMES D. WASHBURN

Andrew Reid, Chairman and CEO of Treaty Energy, stated, "Treaty is pleased with the results of the re-entries into the Tennessee wells. We expect to have the acidizing process completed within 2 to 3 weeks, prior to John Barksdale leaving for Belize to oversee progress there. While our program in Tennessee calls for drilling up to 40 wells, our progress on the Tennessee project has been slow, but deliberate in developing these wells." 

Mr. Reid added, "We felt the need to maximize our upside and minimize our downside in exploring for oil in Tennessee, and therefore the time required to do so has been longer than many might have expected. We expect to see significant production starting in Tennessee after the acidizing process is completed." 

Treaty Energy is very pleased with progress on the Belize project and will update shareholders as announceable events occur.

About Treaty Energy Corporation
Treaty is engaged in the acquisition, development and production of oil and natural gas. Treaty acquires and develops oil and gas leases which have "proven but undeveloped reserves" at the time of acquisition... These properties are not strategic to large exploration-oriented oil and gas companies. This strategy allows Treaty to develop and produce oil and natural gas with tremendously decreased risk, cost and time involved in traditional exploration. For more information go to: www.treatyenergy.com

Forward-Looking Statements:
Statements herein express management's beliefs and expectations regarding future performance and are forward-looking and involve risks and uncertainties, including, but not limited to, raising working capital and securing other financing; responding to competition and rapidly changing technology; and other risks. These risks are detailed in the Company's filings with the Securities and Exchange Commission, including Forms SB-2, 10-KSB, 10-QSB and 8-K. Actual results may differ materially from such forward-looking statements.

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