Tekoil and Masters Agree to Additional Extension

Tekoil & Gas Corp. said that it and the sellers in the previously announced purchase and sale agreement to acquire certain oil and gas properties in Galveston Bay, Texas (the "Masters Acquisition") have agreed to extend the closing date on or before March 16, 2007.

Mr. Mark Western, Chairman of the Company, stated: "We have continued to work on certain conditions to closing, financing and related due diligence. While other conditions remain, we did not anticipate the extra time that recently adopted Land Office procedures would add to land/title searches as a result of a recent Attorney General opinion and Records Agency concerns over liability."

Mr. Western went onto say: "The due diligence process for this complex acquisition has been lengthy and has required a significant commitment on behalf of both Tekoil and the Seller. We have been collaborating on these closing dates with our respective legal counsel and advisors, and all projected dates have been mutually agreed upon. Both parties are now very hopeful that this will be the last extension required."

Mr. Richard Lee, President of Masters Resources, LLC, stated: "We remain committed to this transaction and continue to assist Tekoil through the final stages of their due diligence. We did not anticipate these lengthy land/title procedures but are working through them to bring this transaction to a successful conclusion."

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.