Index Oil and Gas Joins Alligator Bayou Prospect

Index Oil and Gas, Inc. signed a Purchase and Sale Agreement to acquire a 5% working interest and 3.5% Net Revenue Interest ("NRI") in the Alligator Bayou exploration prospect located beneath onshore portions of Brazoria and Matagorda Counties, Texas ("Alligator Bayou").

Alligator Bayou is the largest prospect the Company has signed to date, with potential impact greatly exceeding all previous prospects. The prospect covers up to several thousand acres. The first well is planned to spud in approximately six to nine months.

Alligator Bayou could enhance the Company's business very materially. The company's estimated pre-drill risked mid-case NRI volumes are five times larger than those of the Shadyside prospect announced in June, which was the Company's largest prospect prior to Alligator Bayou. In accordance with Index's business plan, described in the Company's Operations Summary and Outlook released June 11, 2007, the Company's prudent working interest balances risk, reward and costs, and limits the downside of a single critical event.

Alligator Bayou follows two announcements in late June 2007: participation in the Cow Trap project, a relatively low risk well with Proved Undeveloped Reserves, and the spudding of the Cason 1 well, another of the Company's planned higher impact projects for the fiscal year ending March 31, 2008.

Lyndon West, CEO of Index, stated, "Alligator Bayou is a truly outstanding exploratory prospect. We are pleased to participate in this opportunity that will be led by one of the top U.S. domestic independent gas producers. With a successful first well, the expectation is that lower risk, follow-on production drilling will be required to develop what could be a world-class gas field. Commercial success of Alligator Bayou could potentially transform Index into a much larger company."