Press Release
Source: Avalon Oil & Gas, Inc.


Avalon Announces Waters #3 Gas Well On Line


MINNEAPOLIS, MN – September 3, 2008 – Avalon Oil & Gas, Inc. (Avalon) (OTCBB: AOGN) announced that the pipeline spur to the Waters #3-328, Lipscomb County, Texas, has been completed. This well produces from the Lower Morrow sand, a highly charged hydrocarbon reservoir with several producing gas wells in the immediate vicinity.

Amarillo Exploration, the operator of the Waters lease, completed a stimulation treatment on the Waters #3-328 on July 1, 2008. The fracture stimulation was successful. Initial tests indicate the well may produce up to 2,000 MCF per day. A sales agreement with DCP Midstream was reached to accommodate the full gas sales volume projected for the Waters lease. Based in Denver, Colorado, DCP Midstream is a 50-50 joint venture between Spectra Energy and Conoco Phillips.

“We are very encouraged by initial production results on the Waters #3-328 well and anticipate receiving our check before the end of this month,” commented Avalon’s President and CEO, Kent A. Rodriguez. He added “The Waters initial output was limited to 500 MCF per day due to pipeline constraints. With the DCP agreement, the Waters well can deliver its full production capacity of 2,000 MCF of gas per day.”

Avalon acquired a 5% working interest, 3.75% net revenue interest in the 1,280 acre Waters prospect in December 2007. The Waters 3-328 well is positioned between two prolific gas wells and is projected to exceed 1.3 BCF of gas.

About Avalon Oil & Gas, Inc.
Avalon Oil & Gas, Inc. is an oil and gas investment company engaged in the acquisition of oil and gas producing 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.avalonoilinc.com, or contact:

Avalon Oil & Gas, Inc., Minneapolis
Kent Rodriguez, CEO
Tel: 952-746-9655
Fax 952-746-5216