Tri-Valley Corp (fka TVLYQ)

[jonesieatl]

Tri-Valley Forms New Drilling Subsidiary

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Market Wire
11:33 a.m. 03/31/2006


BAKERSFIELD, CA, Mar 31, 2006 (MARKET WIRE via COMTEX) -- Tri-Valley Corporation (TIV) has formed a new Delaware subsidiary, Great Valley Drilling Company LLC, to operate its first drilling rig, which it will acquire with the exercise of its option to purchase expected on or before April 14, 2006. Great Valley Drilling will acquire the drilling equipment of Fallon, Nevada-based Equipment 2000. The rig is rated for 8,000 feet with 4.5 inch drill pipe and 10,000 feet with 3.5 inch drill pipe.

Great Valley Drilling joins its sister subsidiary, Great Valley Production Services, Inc., which is acquiring a fleet of workover rigs to service Tri-Valley's growing inventory of producing wells and the drilling of a number of shallow horizontal wells to re-exploit its properties with modern technology to ramp up production. Great Valley Drilling may also utilize the rig on some of Tri-Valley's California properties that have experienced extensive delays in contractor rig availability as well as continuing to service Nevada projects.

"Formation of these new subsidiaries and acquisition of the rig fleet is both a tactical activity and a strategic matter to add value to our shareholders and accelerate the reward to our project investors," said F. Lynn Blystone, president and chief executive officer of Tri-Valley Corporation.

The Company can now service its own growing inventory of producing wells on a timely basis independent of contractor rig availability, and it believes internal ownership of the rig fleet positions the Company as a preferred bidder for the other properties whose owners may wish to sell because they have increasing difficulty in properly servicing their production or drilling new wells.

"At a time when exploration is picking up in Nevada, we will own the only Nevada-based drilling rig. We have used this rig and its crew to drill our 7063'foot Midland Trail prospect in Railroad Valley Nevada last year and appreciate their capabilities under the leadership of the owner, Gary Borgna, who will join Great Valley Drilling as General Manager," said Joseph R. Kandle, president of both Great Valley Drilling and Tri-Valley Oil and Gas Co., the Company's petroleum exploration and production subsidiary.

Kandle noted that while more than 110,000 wells have been drilled around the region of the Company's Bakersfield, California headquarters, less than 1,000 wells have been drilled in the whole State of Nevada, making it an extremely under-explored area, which is now gaining favor as prospective for oil and gas potential.

"While the likelihood of continuing to contract drilling rigs, particularly for deep projects remains the same for Tri-Valley, through the acquisition our own fleet of production and drilling rigs we are confident we will be able to more timely match investment with project operation to accelerate benefit to our shareholders which is our primary goal," Blystone said.