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Tri-Valley Drills Through 375 Feet of Oil Saturated Diatomite Formation

Posted on: Thursday, 7 September 2006, 15:00 CDT

In what it terms a major boost in the already generous upside potential for re-exploitation of its Temblor Valley West oil property, Tri-Valley Corporation (AMEX: TIV) announced it had drilled through 375 feet of oil saturated upper Diatomite formation in its Lundin-Weber D-350-30 well.

The company encountered the hydrocarbon zone from 700 feet through 1,075 feet and notes that offset wells in adjoining leases have been completed and produced in the Diatomite as deep as 4,000 feet.

"We originally modeled our target for 200 feet of net pay in the Diatomite to estimate 300 million barrels of oil in place in the zone for some percentage of recovery which, with modern methods, could exceed 10 percent. To find this much oilshows this early definitely expands our expectations for the field," said F. Lynn Blystone, president and chief executive officer.

Tri-Valley took over the lightly drilled (49 wells on 700 acres) property the first of this year and assembled its own production and drilling rig fleet for a drilling campaign to increase production. So far the well mud log shows have met or substantially exceed the targeted zones expectations.

Located on the west flank adjoining the massive South Belridge Oilfield Producing Complex 40 miles west of Bakersfield, California, Tri-Valley's property is favorably positioned high to the main structure and has been producing modestly exclusively from the shallow Etchegoin Sand for some 80 years and no production from either the Tulare or Diatomite formations has ever occurred. Some years ago, an adjoining 280 acre property produced in excess of 8,000 barrels a day from several hundred wells for several years predominantly from the Diatomite formation leading the Company to drill to confirm an extension of the formation on its own lease.

While the contained oil is in the desirable range of 26 to 28 gravity, and does not require steaming to recover, the Diatomite formation itself does require hydraulic fracturing to maximize recovery, a process that came late in the development of surrounding fields producing over the past 95 years.

"We're on the flank of a billion plus barrel oilfield and the major companies operating the field are shooting 3-D seismic over the larger region including our property to further define the potential. We also see deeper opportunity which we will investigate in due course while we ramp up production on this lease," said Joseph R. Kandle, president of the subsidiaries, Tri-Valley Oil & Gas Co., which operates the field and Great Valley Production Services LLC which is drilling the development well.

Tri-Valley has other producible properties with prospective zones for which it acquired its fleet of rigs to re-exploit and will begin deploying rigs later this year to drill these new zones. Development funding for three of these properties, including Temblor Valley, comes from the TVOG Opus I Drilling Program LP of which Tri-Valley Corporation is the managing partner and 25% working interest owner. Other properties are held 100 percent for Tri-Valley's account.

"We expect these properties to secure multiple high returns for our partners and add superior value to our shares as we increase production, revenue and reportable reserves. Until we achieve sustained production, we cannot classify these resources as proven reserves at this stage, but standard industry formulae for evaluating field potential in the industry augers well for our partners and shareholders in this regard," Blystone said.

The Company is in its 43rd year of business as a successful operating company and for 32 years has been a full reporting 12 (g) publicly traded Delaware Corporation. Tri-Valley Corporation stock is publicly traded on the American Stock Exchange under the symbol "TIV" in the United States and is also traded in Europe on the Frankfurt Stock Exchange under the symbol "TVC WKN 911919." Our company websites, which include all SEC filings, are www.tri-valleycorp.com and www.tri-valley.de.

This press release contains forward-looking statements that involve risks and uncertainties. Actual results, events and performance could vary materially from those contemplated by these forward-looking statements which includes such words and phrases as exploratory, wildcat, prospect, speculates, unproved, prospective, very large, expect, potential, etc. Among the factors that could cause actual results, events and performance to differ materially are risks and uncertainties discussed in the company's quarterly report on Form 10-Q for the quarter ended June 30, 2006, and the annual report on Form 10-K for the year ended December 31, 2005.

 CONTACT: F. Lynn Blystone President & Chief Executive Officer 1-800-579-9314  

SOURCE: Tri-Valley Corporation

Source: MARKET WIRE

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