Press Release
Source: Avalon Oil & Gas, Inc.

Avalon Oil & Gas Completes Working Interest Acquisition in Two Texas Oil Properties July 07, 2006

MINNEAPOLIS--Avalon Oil & Gas, Inc., (OTCBB: AOGS - News)  announced today that the Company has completed the purchase and acquisition of two oil properties from KROG Partners, LLC pursuant to a previously announced Letter of Intent (LOI). Under the terms of the agreement, Avalon Oil & Gas has acquired a fifty percent (50%) working interest in the J.C. Kelly wellbore, a 121.9 acre lease in Wood County, Texas, in addition to the E.A. Chance #1 and #2 wellbores, a 40 acre lease in Camp County, Texas and all of the surface equipment for the properties.
It is anticipated that the J.C. Kelly wellbore will initially produce 10 barrels of oil per day once back on line, while the E.A. Chance #1 well is currently producing 5 barrels of oil per day.  Upon the execution of a joint operating agreement Avalon and KROG will engage engineers and technical personnel to complete the workovers on each of the properties in order to expand production.

Avalon's Chief Executive, Kent Rodriguez, commented, “We continue to make significant inroads in terms of increased production capacity on lease assets we believe to have low-risk and high production profiles and are continuing our efforts to locate and acquire new lease opportunities consistent with our growth-at-a-reasonable-price philosophy.” He continued, “We believe that with enhancements, production profiles and capabilities on these properties can be ratcheted up dramatically, allowing this acquisition to effectively ‘pay back’ its principal purchase price within twelve months. We are currently evaluating other opportunities with similar return profiles and anticipate announcing more developments shortly

About Avalon Oil & Gas, Inc.
Avalon Oil & Gas, Inc. is an opportunistic acquirer and operator of producing oil and gas properties that possess high quality and low risk profiles and the opportunity to leverage additional production through property enhancement.

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, 612-359-9020 Fax: 612-359-901

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