It’s been a very long time since my last posting, so I apologize for the lack of blogging, but we have been extremely busy organizing the operations of our newly acquired assets in Galveston Bay, as well as launching our investor relations program and engaging in additional fund raising activities. Donna Parsons has also been very busy spear heading our Canadian operations, so I thought I would restart my blogging efforts with an overview of her tremendous progress in Newfoundland.

Drilling Activity: The Company has continued to work with all levels of government to obtain the permitting for spudding “Glori #1″ in November 2007, Tekoil’s first exploration well in western Newfoundland. This well will be an onshore-to-offshore well in offshore lease EL-1069, thus will fall under both the Department of Natural Resources (DNR), as well as the Canada-Newfoundland & Labrador Offshore Petroleum Board (C-NLOPB). Under the terms of the farmin Agreement with Ptarmigan Resources, Tekoil will earn a 33% working interest in the block for drilling Glori #1.

To-date, we have submitted our environmental assessment (EA) for both the onshore and offshore areas. The onshore area has been released from further environmental assessment, which allows Tekoil to move forward with site preparatory work in Little Port. Local contractor Roger Sheppard was awarded the contract on September 7th. Site preparations are expected to begin in October 2007. In order to keep local communities aware of Tekoil’s intentions, there will be a public consultation on September 20, 2007, at the Town Hall in Lark Harbor. The offshore EA is still under review by the C-NLOPB.

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So who wants to be a Tekoil analyst? Certainly not me!, but while in the process of closing our Galveston Bay acquisition, ENI, a major Italian oil and gas player announced a very large deal with Dominion Resources, which as reported by Raymond James & Associates Equity Research Department, has potentially placed a premium on oil and gas assets throughout the Gulf of Mexico.

In what is the largest E&P deal year-to-date in North America, Dominion announced that it was selling its Gulf of Mexico properties to Italian oil major ENI for $4.76 billion. This transaction was part of Dominion’s ongoing E&P divestiture program. Proved reserves being sold were estimated at 967 Bcfe (billion cubic feet equivalent), implying a reserve valuation of $4.92 per Mcfe (1,000 cubic feet equivalent). This price is notably high relative to current valuation multiples of publicly traded Gulf of Mexico-focused producers, which are generally between $3.00 and $4.00 per Mcfe. For example:

In addition to the sheer size and bullish valuation of the ENI deal, we also see the possibility of a broader strategic significance to this transaction for Tekoil. To further expand on that thought and in an effort to put things in perspective, the $50 million purchase price that Tekoil paid for its circa 80 Bcfe of privately held Gulf of Mexico proved oil and gas reserves, represents just $0.625 per Mcfe compared to ENI’s $4.93 per Mcfe, and the cash portion of Tekoil’s deal only represents $0.375 per Mcfe, less than 1/12th of the ENI deal?

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Albert Einstein once said that “Vision without execution is hallucination.” And Remember Sir Winston Churchill’s famous saying; “We will never, never surrender.” Well we executed the vision because we refused to quit, and I have a lot of non-hallucinating people that helped us to get there.

I must thank our dedicated legal team at Baker and Hostetler, in both the Orlando and Houston offices, the executive team at the sellers, Masters Resources, and of course the team at Goldman Sachs that helped us create the “win win” structure that made the deal possible. All parties were extremely patient and creative, which finally got the deal done. I must also thank the entire Tekoil team who at times thought I had lost my mind, but stayed the course through what seemed impossible at times. Many thanks to all of you.

We have a tremendous amount of hard work ahead with creating and integrating our own systems and getting our Houston office up and running, but that is a good challenge to have. We will update the web site to give you a better overview of the Galveston acquisition and the assets, together with posting progress on further developing the assets to increase our yields and firm up the reserve numbers.

On the field development side we are purchasing existing 3D seismic data for reinterpretation, which will be utilized to create more detailed geological maps for drilling the proved undeveloped reserves, and identifying potential deep well targets that remain unexplored. This is not going to happen overnight, but we have made it a priority to keep our shareholders better informed, so please make regular visits to our website for updates.

We will definitely be using this blog as a more informative instrument to report our work in progress. I apologize for lack of postings recently, but my quill was in brain freeze whilst getting this acquisition to the finish line.

And finally, I would like to thank all of our shareholders for your support and patience during our first acquisition. We trust and hope this will be the first of many as we build our foundation of reserves and revenue.