August Energy and ORION Petroleum Jointly Announce Farm-Out of Six Wells Situated in Section 18 of the Puckett Oil & Gas Field.

PUCKETT, Miss. -- August Energy Corp., (Pink Sheets:AENC) and ORION Petroleum Corp. (Pink Sheets:ONPC) jointly announced today that they have entered into a farm-out agreement with U.S. Oil & Gas Resources Inc. (US Oil) wherein US Oil will participate in the development of proven oil and gas reserves in Puckett Oilfield, Puckett, Mississippi.

Under the terms of the agreement U.S. Oil farms in the rights to six wells situated in Puckett Oil & Gas Field in Sec 18, Smith County, Mississippi. U.S. Oil has agreed to provide 100% of the cost of restoring the shut in wells to production in exchange for 75% of the net revenue interest before pay out and 50% after pay out per well. Payout is defined as the point in which net revenues from the well have returned 100% of the funds expended by U.S. Oil as to each well.

August Energy purchased Puckett Field in August 2004 and has since increased revenues in the field to approximately $200,000 per month through recompletions and installation of additional production facilities. ORION Petroleum acquired its 32.5% carried interest in the field in October 2004. Recently August Energy announced plans to drill new wells in the field and has staked its first location.

Puckett Field currently has twenty-two wells and two salt water disposal wells. August Energy and Orion Petroleum now have seven producing oil wells, two producing gas wells and one shut in gas well in the field. The farm out to U.S. Oil gives U.S. Oil the right to reinstate production in six additional wells situated on 320 acres in Sec 18, a portion of the field that August & Orion have yet to develop.

Preliminary geological estimates provided by the Operator of the Puckett Field, indicates that it is probable that the portion of the field that U.S. Oil & Gas has acquired in this farm-in, could yield another 1,000,000 BOE (barrels of oil & gas combined).

The operator of the field is moving a rig to the first well today. Further news will follow.

Certain information included in this communication (as well as information included in oral statements or other written statements made or to be made by August Energy Corp. or ORION Petroleum Corp.) contain statements that are forward looking, such as statements related to the future anticipated direction of the oil and gas industry, plans for future expansion, various property development activities, planned capital expenditures, future funding resources, anticipated production and reserve growth. These forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual operations or results to differ materially from those anticipated.