Vanoil Plans Reentry to Establish Gas Production in Alberta

Vanoil Energy will proceed with all necessary steps to re-enter the 12-13-23-04 well in attempt to establish commercial production of natural gas. Vanoil has a 42% working interest in the well and associated 2,560 acres or 4 section lease located on the Tsuu T'ina Nation lands west of Calgary, Alberta. The 12-13 well was drilled by C1 Resources (C1) in 2005 and encountered a significant section of gas charged Turner Valley Zone.

Since late 2005, C1 conveyed its working interest to Vanoil and other working interest partners and is no longer an operator of the well. As a result, Vanoil currently holds a 42% working interest in the well and leases and is taking an active role in the ongoing operations in order to establish value.

Vanoil has had another independent evaluation of the probable reserves associated in the 12-13 well and related leases conducted as of August 2009, wherein, the estimate of original raw gas in place accessible by the 12-13 well is 18.6 billion cubic feet (BCF). In addition, a second undrilled location at 7-23-23-04 W5M is estimated to have an additional 14 BCF of probable undeveloped original raw gas in place (as previously reported in our press release dated January 8, 2010).

Vanoil has recently completed a detailed review of the 12-13 well bore and has designed a re-entry program expected to establish commercial natural gas production. Re-entry operations are subject to agreement with Vanoil's partners, including the Tsuu T'ina First Nation, and approval from the Alberta Energy Resources Conservation Board.