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Avalon Acquires Interest in Grace #2
© Business Wire 2008

2008-06-10 18:16:33 -

- Avalon Oil & Gas, Inc., (Avalon) (OTCBB: AOGN) (FWB: A3MA.F) has acquired a 2.5% working interest and 1.875% net revenue interest in the Grace #2 Well, Lincoln County, Oklahoma. The Grace #2 is currently producing 350 MCF of natural gas per day. Last week the price of gas closed above $12/MMbtu on the New York Mercantile Exchange, having peaked
above that level in intraday trading recently in three previous sessions. Market analysts are "leaving the door open for possible advances," attributing the surge in natural gas prices to hotter temperatures in the U.S., a percolating tropical weather environment, and continued fund short-covering in the commodities market, according to an article in the June 4 Oil & Gas Journal.

Bedford Energy is the operator of the Grace # 2 well. The Grace # 2 recently had a successful completion in the Viola Limestone" said Kent A. Rodriguez, Avalon's CEO. "Log characteristics indicate the Viola Lime is a highly favorable prospect, in comparing log results to other oil prolific wells in the Viola formation. In addition we plan to obtain a gas analysis report to review the potential of the Layton sand," he added. Reserves from the Grace # 2 are estimated to be 59.3 MBBL of oil and 148.25 MMCF of gas.

"We are actively seeking to increase our ownership in the Grace # 2 and four (4) other producing wells in the East Chandler Prospect," said Rodriguez. He added "Avalon's energy portfolio now includes production assets of 45 producing oil and gas wells in 5 states, and we expect to continue to expand our capital deployment and acquire several more oil and gas producing properties in the coming months."

About Avalon Oil & Gas, Inc.

Avalon Oil & Gas is an oil and gas company engaged in the acquisition and development of producing oil and gas properties. In addition, Avalon's technology group acquires and develops energy production enhancing technologies. Through Oiltek, Inc., Avalon's majority-owned subsidiary, Avalon is building an asset portfolio of innovative technologies in the oil and gas industry to maximize enhancement opportunities.