Tekoil/Ptarmigan Pay Deposit to Extend Newfoundland Lease

Tekoil & Gas Corporation said that it has paid the $250,000 Canadian dollars required under the terms of the Farmin Agreement with Newfoundland & Labrador based Ptarmigan Resources Limited, 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), 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.

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.

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.

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