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Tri-Valley Speeds Up Oil and Gas Activity By Buying Its Own Drilling and Production Rig

Posted on: Monday, 17 October 2005, 15:00 CDT

Tri-Valley Corporation (AMEX: TIV) announced today that it is purchasing its own drilling and production rig and expects the costs of the equipment and crews to be in the range of $1,000,000 over the next six months.

"We are convinced in this day of equipment shortages, this purchase has significant upside implications for the Company, its shareholders, drilling partners and royalty owners as we can very materially speed up our exploration and exploitation," said F. Lynn Blystone, president and chief executive officer.

"For example, we recently acquired a property that came with three independent engineering reports with estimates averaging 24 million barrels of undeveloped oil (based on old recovery methods) in just one zone. The Securities and Exchange Commission only recognizes proven producing properties for filing purposes so we will get busy and begin to put that undeveloped category into production for official recognition as well as increasing revenues. Further, we expect modern techniques will swell the property's ultimate recovery and rate. We are dealing with 500 feet of oil saturated zone in this particular instance," Blystone said.

Joseph R. Kandle, president of the Company's operating subsidiary, Tri-Valley Oil & Gas Co., has many years experience running the drilling operations of other companies as well as Tri-Valley and put together Tri-Valley's drilling division. Day to day operations including crew supervision will be run by Randy Stafford who, until his recent joining with Tri-Valley, had his own successful drilling and production service and crews.

The production rig component will be available to workover Tri-Valley's existing wells this quarter. The component for drilling to 8,000 feet will be available the first quarter of 2006. Kandle noted that purchase of another property with more than 40 existing wells is pending and the rig is capable of drilling infill wells on all of its properties including the pending purchase.

"We will still go to contractors to drill deeper wells but won't have to twiddle our thumbs in between rig availability. This will greatly accelerate production cash flow and the achieving of our immediate goal of having at least one producing barrel of oil equivalent behind every Tri-Valley share as we certainly have the property inventory to do that," Kandle said.

Tri-Valley recently advised that it would drill 10,000 foot appraisal wells on two recently acquired properties to test zones that are productive nearby but have never been tested on its new properties. These wells will be drilled by contractors with bigger rigs when available. But the Company can keep its own rig busy reworking existing wells and drilling infill wells to ramp up production and revenue while waiting on larger rigs.

Tri-Valley now has more than 100,000 acres of prospective mineral interest, a proprietary worldwide geologic library with some 700 California leads and prospects along with more than 20,000 line miles of digitized seismic data enabling it to rapidly evaluate prospects in every onshore basin in California.

"Most people are unaware that just the Bakersfield region alone produces more that three times as much oil per day as the entire State of Oklahoma or Wyoming. The deeper potentials of the area are huge and practically unexplored and it is a perfect place for Tri-Valley as an independent wildcatter to explore for big, new targets while developing production on its increasing property position. Certainly the price and market are right and we have the inventory, personnel, cash and equipment to support our simple corporate mission statement which is to increase the value and liquidity of our shares," 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, 2005, and the annual report on Form 10-K for the year ended December 31, 2004.

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

SOURCE: Tri-Valley Corporation

Source: MARKET WIRE

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