Avalon Closes Acquisition of Colombian Properties.

MINNEAPOLIS -- Avalon Oil & Gas, Inc. (Avalon) (OTCBB: AOGN) (FWB: A3MA.F) is pleased to announce it has closed its acquisition of a twenty percent (20%) interest in the Talora Block and a fifteen (15%) interest in the Mecaya Block, in Colombia, from Gran Tierra Energy, Inc. (OTCBB: GTRE). Avalon also announced that the first Talora Block operation, the re-entry and re-evaluation of the Manantiales well, has begun.

Avalon's CEO, Kent A. Rodriguez, stated "We are extremely pleased with the addition of these two blocks to our growing portfolio of oil and gas producing properties. The Talora and Mecaya Blocks will provide a foundation for many future acquisitions in Colombia. The reduced field size-based royalties, attractive fiscal terms from the Colombian Government, and low annual ground rents make the economics in Colombia quite compelling," Rodriguez added.

The workover of the Manantiales-1 well is the first of five prospects to be tested on the Talora Block. The 108,333 acre block is located in the Middle Magdalena Basin, approximately 75 km west of the capital city of Bogota. This prolific area is adjacent to and on trend with several oil producing fields including the 117 million barrel Guando field, operated by Petrobras, and the adjacent Mana field, which contains 10 wells which typically flow 500 to 600 BOPD of 30 [deg] API oil from high quality sands at approximately 5,500 feet.

The Talora Block is well served by road and pipeline access, and is near the city of Neiva, which functions as the oil industry services and supply base. It is directly south of a number of oil fields which are currently under development or redevelopment. These include the Puli C, Rio Opia, Toqui-Toqui, and Ambrosia oil field which produce from Cretaceous sands at depths of less than 5,000 feet. Interoil of Norway recently announced that the first four wells in its planned 9 well program in the region have all been successful and are producing at rates of 300 to 500 BOPD per well. Pacific Stratus (TSX: PSE) is also active in this region and is developing the 5 million barrel Puli B field which produces 32 [deg] API oil. Avalon's partners in the Talora Block development include PEI, an independent Colombian operator of several exploration and development projects, and PetroSouth Energy (OTCBB: PSEG).

"We are very excited about the potential reserves in the Talora Block. They are a strong complement to the existing production that will be realized in the short term from Avalon's investment in the Mecaya Block", commented Avalon Director Menno Wiebe. "In this transaction, Avalon is successfully executing our mandate to identify robust oil production assets in Colombia and evolve our growing property portfolio."

Mecaya Block

Avalon also acquired a 15% interest in the 74,000 acre Mecaya Block in the Putumayo basin from Gran Tierra Energy, Inc. This Block contains the Mecaya 1 oil discovery and two other wells which have tested oil. The Mecaya 1 was drilled by the Colombian National Oil Company, Ecopetrol, in 1989. The Mecaya 1 well tested approximately 650 BOPD of 27 [deg] API oil, with no water at a stable flow rate over a period of 24 hours. At the time of drilling, the Mecaya well was a considerable distance from infrastructure. With oil prices much lower than they are today, the development was considered too small (at 5 MMBO) to meet Ecopetrol's economic threshold in 1989. Today's market conditions favor this development, with oil produced in this area having a netback of approximately $70.00 per barrel. Current development plans include: building an access road, re-entering the Mecaya well and putting it on production. If the initial production demonstrates that the reserves are approximately 5 million barrels of recoverable oil as mapped by Ecopetrol, the field will be developed with additional wells.

Stephen Newton, Avalon Director, added "Avalon's performance has proven its business model of investing in producing properties with stable cash flows provides a consistent return on investment. With the company's expansion into these promising Colombian properties, Avalon is poised to deliver significantly increased returns."

About Avalon Oil & Gas, Inc.

Avalon Oil & Gas, Inc. is an oil and gas company engaged in the acquisition and development of producing oil and gas properties. In addition, Avalon's technology group acquires and develops oil production enhancing technologies. Through Oiltek, Inc., Avalon's majority-owned subsidiary, Avalon is building an asset portfolio of innovative technologies in the oil and gas industry to maximize enhancement opportunities at its various oil and gas properties.

Forward-Looking Statements

This press release contains statements, which may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of Avalon Oil & Gas, Inc., and members of its management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

FOR FURTHER INFORMATION, please visit the company's website at www.avalonoil.com.