Penn Octane Corporation Announces Option to Purchase Additional 25% of Rio Vista GP LLC, General Partner of Rio Vista Energy Partners L.P.

PALM DESERT, Calif. -- Penn Octane Corporation (the "Company") (PINK SHEETS:POCC), an energy services company, announced that on February 6, 2007 it had entered into a purchase option agreement with Shore Trading LLC ("Shore Trading") that provides the Company with the option (the "Purchase Option") to purchase 25,000 units (the "Shore Units") of membership interest of Rio Vista GP LLC ("Rio Vista GP") currently held by Shore Trading. Rio Vista GP is the general partner of Rio Vista Energy Partners L.P., an energy services master limited partnership. An affiliate of Shore Trading acquired the Shore Units from the Company on July 1, 2006.

The Shore Units represent 25% of the outstanding membership interests of Rio Vista GP. The Company currently holds 50% of the outstanding membership interests of Rio Vista GP. If the Company exercises the Purchase Option, the Company will own 75% of Rio Vista GP. Shore Trading is party to a voting agreement with the Company pursuant to which Shore Trading has agreed to vote its units as instructed by the Company, subject to certain exceptions. As a result of the voting agreement, whether or not the Purchase Option is exercised, the Company has the right to elect all members of the board of managers of Rio Vista GP.

About Penn Octane Corporation

Penn Octane is engaged in energy services, including the purchase and sale of gasoline and diesel fuel. Penn Octane began operations of its gasoline and diesel fuel reseller business in June 2004. By allocation to Penn Octane of portions of certain pipeline and terminal space located in California, Arizona, Nevada and Texas, Penn Octane is able to sell gasoline and diesel fuel at rack loading terminals and through bulk and transactional exchanges. In addition, Penn Octane owns a 50% interest in Rio Vista GP LLC, the general partner of Rio Vista Energy Partners L.P. ("Rio Vista"), an energy services master limited partnership, and has an option to acquire an additional 25% interest in Rio Vista GP LLC. Rio Vista owns liquefied petroleum gas ("LPG") assets, including pipelines running from a terminal facility in Brownsville, Texas owned by TransMontaigne Product Services, Inc., to a terminal facility in Matamoros, Mexico owned by Rio Vista.

Forward-Looking Statements

Certain of the statements in this news release are forward-looking statements, including statements regarding the prospects for the LPG transportation business and the gasoline and diesel fuel reseller business and Penn Octane's option to acquire additional units of Rio Vista GP LLC. 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. 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 transportation business and/or fuel reseller business. Penn Octane may not have sufficient cash to exercise its option to acquire additional units of Rio Vista GP LLC and/or Penn Octane may elect not to exercise such option. 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 most recent reports on Form 8-K, Form 10-Q, Form 10-K and Form 10 filed with the Securities and Exchange Commission.