Penn Octane Corp. Announces Signing of an Amended and Restated Agreement to Sell Its LPG-Related Assets.

PALM DESERT, Calif. -- Penn Octane Corp. (PINK SHEETS:POCC), a supplier of LPG for distribution to northeast Mexico, announced today that it had entered into an amended and restated purchase and sale agreement (Penn Octane Restated PSA) with TransMontaigne Product Services Inc. (TransMontaigne), a wholly owned subsidiary of TransMontaigne Inc. (NYSE:TMG). In connection with the Penn Octane Restated PSA, Rio Vista Energy Partners (Rio Vista) (NASDAQ:RVEP) also entered into an amended and restated purchase and sale agreement (Rio Vista Restated PSA) with TransMontaigne. The restated PSAs replace the previously executed purchase and sale agreements between Rio Vista, Penn Octane and TransMontaigne dated Aug. 15, 2005.

The Penn Octane Restated PSA is effective Aug. 15, 2006, and provides for the sale and assignment of all of Penn Octane's LPG assets, including assignment of the Seadrift Pipeline Lease and the Exxon Supply Contract. Penn Octane will retain assets related to its Fuel Sales Business and its general partner interest in Rio Vista. The purchase price for assets to be sold under the Penn Octane Restated PSA is $10,100,000, subject to certain adjustments. The Penn Octane Restated PSA provides for a closing date no sooner than Aug. 22, 2006, and is subject to several conditions, including concurrent closing of the Rio Vista Restated PSA, the assignment of LPG-related contracts, the consent of RZB Finance LLC and the modification satisfactory to TransMontaigne of a temporary injunction issued on June 13, 2006, against one of Rio Vista's subsidiaries. The Penn Octane Restated PSA provides that either party can terminate the agreement if closing does not occur on or before Oct. 1, 2006.

The Rio Vista Restated PSA is effective Aug. 15, 2006, and provides for the sale and assignment of Rio Vista's LPG assets located at the Brownsville Terminal Facility, the refined products tank farm and LPG inventory wherever located and assignment of the P.M.I. Trading Limited sales agreement dated April 28, 2006. Rio Vista will retain its owned pipelines located in the United States, including land, leases, and rights of way, and 100 percent of the outstanding stock of its Mexican subsidiaries. Rio Vista's Mexican subsidiaries and consolidated affiliate in turn own pipelines in Mexico and the Matamoros Terminal Facility, including land and rights of way. The purchase price for the acquired assets under the Rio Vista Restated PSA is $8,300,000, subject to certain adjustments. In addition, under the Rio Vista Restated PSA, TransMontaigne has agreed to exclusively use the services and retained assets of Rio Vista on a fee basis for purposes of transportation of LPG to be delivered into northeastern Mexico and/or LPG sold pursuant to the PMI sales agreement. In addition, under the Rio Vista Restated PSA, TransMontaigne agreed to provide operation and maintenance services for the U.S. portion only of Rio Vista's pipelines between Brownsville, Texas, and Matamoros, Mexico. The Rio Vista Restated PSA provides for a closing no sooner than Aug. 22, 2006, and is subject to several conditions, including concurrent closing of the Penn Octane Restated PSA, assignment of LPG-related contracts, the consent of RZB Finance LLC and the modification satisfactory to TransMontaigne of a temporary injunction issued on June 13, 2006, against one of Rio Vista's subsidiaries. The Rio Vista Restated PSA also provides that either party may terminate the agreement if closing does not occur on or before Oct. 1, 2006.

If the LPG asset sale is completed, Penn Octane intends to use a portion of its proceeds to pay off approximately $1,000,000 of outstanding debt obligations plus accrued interest. In addition, Penn Octane estimates that it may have a federal tax liability in connection with the sale of its assets. Penn Octane intends to continue to operate its Fuel Sales Business.

About Penn Octane Corp.

Penn Octane historically has been a supplier of Liquefied Petroleum Gas (LPG) to northeastern Mexico until the transfer of its physical assets to Rio Vista Energy Partners L.P. (Rio Vista) in September 2004. Since September 2004, Penn Octane has supplied Rio Vista with all the LPG which Rio Vista supplies to northeastern Mexico. Unless the LPG asset sale is completed, Penn Octane intends to continue to lease the 132-mile, six-inch pipeline (the Seadrift pipeline) which connects from a gas plant in Kleberg County, Texas, to Rio Vista's terminal facility in Brownsville, Texas, and Penn Octane intends to continue to supply Rio Vista with all of the LPG which Rio Vista supplies to northeastern Mexico. Penn Octane began operations of its gasoline and diesel fuel reseller business in June 2004. By allocating portions of certain pipeline and terminal space located in California, Arizona, Nevada and Texas to Penn Octane, Penn Octane is able to sell gasoline and diesel fuel at rack loading terminals and through bulk and transactional exchanges.

Forward-Looking Statements

Certain of the statements in this news release are forward-looking statements, including statements regarding the completion of the proposed LPG asset sale, payment of outstanding debt and prospects for the gasoline and diesel fuel reseller business. Although these statements reflect Penn Octane's beliefs, they are subject to uncertainties and risks that could cause actual results to differ materially from expectations. The proposed LPG asset sale may not be completed if any of the conditions to closing are not satisfied, including the modification of a temporary injunction issued against one of Rio Vista's subsidiaries are not satisfied, or if various governmental and third party approvals are not obtained. If Penn Octane is not able to obtain adequate financing or to continue to generate sales of its products at profitable levels, Penn Octane would suffer material adverse consequences to its LPG and/or Fuel Sales business. Penn Octane may be unable to complete future acquisitions and, even if completed, such acquisitions may not be prove successful. Additional information regarding risks affecting Penn Octane's business may be found in Penn Octane's most recent reports on Form 8-K, Form 10-Q and Form 10-K and Rio Vista's Form 10-Q, Form 10-K and Form 10 filed with the Securities and Exchange Commission.