MINNEAPOLIS – Avalon Oil & Gas Inc. has agreed to acquire an undivided 100% working interest in a 320-acre leasehold in Vernon County, Missouri. The leasehold contains over 70 wellbores, with over 20 wellbores equipped for production.

The Shell Oil Co., Phillips Petroleum, and Humble Oil Co. have all tested the Bluejacket and Warner Sandstones with various levels of success. In the early 1980's, a steam injection method was proven successful in extracting the heavy crude oil from the sandstone formations.

Recently, Mega West Co. and Colt Energy Co. have been testing core samples to prepare for steam injected oil enhancement recovery production units. Oil has been produced from the Ida-Fauvergue leasehold in limited quantities since 1979, by utilizing a cyclic steam injection recovery system. The cumulative oil production to date is over 325,000 barrels of oil.

A petroleum engineer and microbiologist retained by Avalon are currently reviewing core samples of the 65 wells drilled on the Ida-Fauvergue leasehold in the early 1980's, the lease production history, and production schematics from producing leaseholds in close proximity to the Ida-Fauvergue leasehold. Preliminary studies indicate there may be over 8,000,000 barrels of oil in the southwest and east-central portions of lease.

About Avalon Oil & Gas is an oil and gas company engaged in the acquisition and development of producing oil and gas properties.