Avalon Completes 1st Phase of Ms. Workover

Avalon has completed the first phase of the workover of the Baxterville Field Prospect in Lamar County, Mississippi. Avalon is purchasing an 18.75% working interest in the Baxterville Field Prospect from Bayside Petroleum.The two hundred (200) acre leasehold contains three wellbores; two wells are equipped for production, and a salt water disposal well.

"We are excited to have completed the first phase of the workover of the Baxterville Field Prospect," said Avalon's CEO, Kent A. Rodriguez. "The salt water disposal well passed inspection. In addition a hot oil treatment to separate the oil and water in the three 200-barrel tanks was successful, and Plains Marketing completed a pick-up of oil. We plan to pull all existing downhole equipment, clean out the wellbore, run a gamma ray log, re-perforate the Upper Tuscaloosa zone, re-run tubing and test the flow rate for initial fluid entry rates on the Moody 31-9 #5, in the next few days," added Rodriguez.

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 Tuscaloosa oil in this field has a very low gravity, around 17 API, and is produced with a large volume of salt water. 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.