Radial Energy Lines Up Financing from Cornell Capital Partners

Radial Energy Inc. (OTC BB:RENG.OB) has signed a $5,000,000 convertible debenture financing with Cornell Capital Partners, LP and has received the first tranche of $2,000,000.

The debentures have a term of three years and bear interest at 7% per year. At the option of the holder, the debentures may be converted into Radial Energy common stock at a conversion price equal to the lower of $1.0536 or 90% of the lowest volume weighted average daily closing price of the Company's common stock, during the fifteen trading days immediately prior to the conversion date. In addition, Radial Energy issued 9,166,667 warrants to Cornell Capital with exercise prices varying from $0.75 to $1.50 per warrant. None of the shares of common stock underlying the debentures or warrants were registered under the Securities Act of 1933. Accordingly, such shares may not be offered or sold in the United States, except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act. The company has agreed to file a registration statement covering the resale by the investor of the shares.

The proceeds will be invested into Radial Energy's ongoing projects including the Block 100 project in Peru, the Cherokee County prospects in Texas, and the Bosques project in Colombia. As previously announced by Radial Energy, the estimated spud date of the Huaya 100-1X well in Peru is October 15th, 2006 and it is expected to take 7-10 days to reach total depth.

Radial Energy President G. Leigh Lyons stated, "We are extremely pleased with the financial flexibility this recent financing has provided. If the first well in Peru is successful, as we expect it to be, this financing will allow us to immediately drill 2 additional wells, bringing Radial Energy a step closer to the production stage."