CEO Issues Letter to Shareholders of Avalon Oil & Gas, Inc.

MINNEAPOLIS, May 17 /PRNewswire-FirstCall/ -- Kent A. Rodriguez, CEO of Avalon Oil & Gas, Inc., ("Avalon") (OTC Bulletin Board: AOGN) issued the following letter to shareholders today.

Dear Fellow Shareholders:

I want to thank all shareholders for their patience as we continue to recover from the severely depressed commodity pricing environment that prevailed during the first and second quarter of 2009.  Oil prices have rebounded but the price of natural gas remains weak, hovering around $4.00 per mcf.  We continue to produce oil from our leaseholds in Arkansas, Texas and Louisiana, and gas from our leaseholds in Oklahoma and Texas.  However, four of the five gas wells we acquired in December 2009, in Lincoln County, Oklahoma are still shut-in.  We are only producing the Grace # 2, and do not expect to produce the other four wells until the price of natural gas increases, as the lifting cost of the gas from these wells is too high.    

What to look for in for the remainder of 2010:

1. Continue to acquire oil and gas producing properties with stable cash flows and proven reserves.  We recently acquired a working interest in a leasehold in Lamar County, Mississippi, and are negotiating the purchase of a working interest in a leasehold in Duval County, Texas.  Both of these properties have a producing well and multiple shut-in wells with production history.  We are actively seeking additional properties in Kansas, Oklahoma and Texas.  
2. Complete the registration statement for our majority owned subsidiary Oiltek, Inc., obtain our OTCBB listing and issue our Avalon shareholders a share dividend, in Oiltek, Inc.  The dividend and record date will be determined by our Board of Directors soon.  We are actively adding strategic partners and advisors to our Oiltek team.    

When I started Avalon Oil & Gas, Inc., in 2005, I had a vision that a company with few employees and low overhead could, through diligence and a small but seasoned team of advisors, position itself with the right assets that could provide rapid and significant growth for shareholders.  I believe that 2010 is the year this vision begins to become reality.  Again, I want to thank all of our shareholders for their continued support and confidence.  

About Avalon Oil & Gas, Inc.  Avalon Oil & Gas 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 energy production enhancing technologies.  Through Oiltek, Inc., Avalon's majority-owned subsidiary, Avalon is building an asset portfolio of innovative technologies in the energy industry to maximize enhancement opportunities. To learn more about AOGN, please visit: www.avalonoil.com.

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.

SOURCE Avalon Oil & Gas, Inc.