Avalon Acquires Leasehold in Mississippi

Avalon Oil & Gas has entered into an agreement with Bayside Petroleum Company, Inc., to purchase an 18.75% working interest in Bayside's Baxterville Field Prospect in Lamar County, Mississippi. The two hundred (200) acre leasehold contains three wellbores; two are equipped for production.

The Baxterville Field spans over 13,000 acres, with more than 300 producing wells. The field has produced 262 million barrels of oil and 450 billion cubic feet of gas, primarily from the Tuscaloosa formation. The wellbores on the Baxterville Field Prospect have produced from the Lower Tuscaloosa Sand at a depth of 8,800 feet. The three wells have produced more than 500,000 barrels of oil and were producing 200 barrels of fluid, with a 5% oil cut when they were shut-in, in 2006.

"We are very excited about this prospect and look forward to a successful workover program on the Baxterville Leasehold wellbores in the next 60 days," said Avalon's CEO, Kent A. Rodriguez. "We are going to install a hydraulic lift system, increase the volume of fluid recovery from the two equipped wellbores in excess of 2,000 barrels of fluid per day, and hope to maintain an oil cut of at least 6%," added Rodriguez.