Riverdale to Develop Oil Reserves in South Texas Formation

Riverdale Oil and Gas Corp. has embarked on a program to develop the massive oil reserves blanketed under and around the Hitzfelder lease, located approximately 40 miles south of San Antonio, Texas. The Company will commence a test project using the Hitzfelder #10 well. It plans to re-perforate the San Miguel formation at 2950 feet in depth in the #10 well; and, hydraulically fracture the well using a proprietary system to facilitate the mobility of the oil. Also, the greatest benefit could be the significant increase of ultimate recovery of oil in comparison to conventional practices and results.

The Company estimates that each 40-acre area could contain as much as 240,000 barrels of oil and 120 million cubic feet of gas. At a conventional recovery factor of 15%, the proved producing reserves would be 36,000 Bbls Oil and 18,000 MCF Gas. At $60 per barrel oil and $7.50 per mcf of gas, the gross value would be $2,295,000. The Company will reduce its cost by using the existing Hitzfelder #10 well drilled through the targeted San Miguel formation. It is estimated that the total development costs will be $100,000. After royalties, taxes and lease operating expense, it is estimated that the well could produce a net profit of $1,289,000, providing a 13.89 to 1 Return on Investment. At a stable production rate of 30 barrels of oil per day and 20 mcf of gas per day, it is estimated that the #10 well would achieve payout in less than 4 months, generating a monthly cash flow of $35,700.

There are 7 additional locations on the Hitzfelder lease, as well as thousands of acres surrounding the lease that can be exploited for the development of the San Miguel formation. In developing these sites, the Company intends to expend approximately $1,000,000, with the ultimate objective of attaining gross revenues of $3,000,000 per annum from this lease, with net income per annum estimated per year to be $1,800,000. Should the Hitzfelder re-entry be as successful, as expected, the Company intends to finance the development of the field with debt financing secured by the proven and probable reserves, thereby saving dilution to the Company's shareholders.

The Company anticipates a highly successful economic test of the Hitzfelder #10 well; and, the subsequent expansion of the program throughout the region, which contains hundreds of millions of barrels of oil trapped in the San Miguel formation.

Riverdale was formed in August 2005 to engage in the acquisition of currently producing properties, leases with proven reserves, and the exploration, development and production of oil and natural gas properties. The Company currently owns working interests in a total of 10 existing wells and 1 salt water disposal well located in California and Texas. The Company plans to deploy $5 million in 2007 to continue its exploration program on the leases that it owns, and to acquire other existing production, drilling and development of high potential exploratory prospects, as well as lower-risk prospects involving development wells within mature fields with a production history, step-out exploration in areas of existing production, as well as recompletions and workovers of existing wells.


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