TX Holdings Starts Oil Production

TX Holdings, Inc. reported that production of oil has begun in Contract Area. The Company has received the sum of $4,119. This nominal revenue represents funds from production prior to January 31, 2008 less expenses of operation, taxes and royalties. Production will continue in the future with additional wells being placed on line. Contract Area 1 is being operated by Masada Oil, our partner in the Contract Area 1 venture.

The Company is also announced that work on the Parks Lease has resulted in three wells being completed and ready for production once our operator's bond is in place with the Texas Railroad Commission. An additional nine wells on the Parks Lease are expected to be brought to completion within 4 to 6 weeks.

The funds for the operator's bond ($50,000.00 Letter of Credit) have been physically deposited with JP Morgan Chase Bank in Abilene, Texas. There is a requirement that we register a unique "Company Name" with the state of Texas before we can post the Bond. The State of Texas will not allow us to use the name of TX HOLDINGS, INC. because of the similarity to an existing name on record. Therefore, we will form a wholly owned subsidiary to be named the Operator for our Park's and William's leases. The name of the wholly owned subsidiary will be TX (GEORGIA) HOLDINGS, INC. The registration and the bonding are being walked through the system and we hope to be able to operate all our wells under our own bond within a very short period of time.