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Tri-Valley Corp. (TIV) Reports FY11 Financials And Operational Update

|Includes: Tri-Valley Corporation (TIV)

Tri-Valley, the name behind a growing footprint of oil and natural gas E&P infrastructure in CA (specifically the Pleasant Valley Oil Sands Project in the Oxnard Oil Field and the Claflin Project in the Edison Field), as well as two emerging, exploration-stage gold properties in Alaska, offered FY11 (ended Dec 31, 2011) financial results today, also providing an overview/update on business-wide operations.

Compared to FY10:

- Oil and gas production revenues jumped 34% to $2.3M (total revenues of $2.6M)
- Net oil production climbed 21% to 29,785 barrels
- Gross Production up 33% at Pleasant Valley to 269 barrels/day
- Gross Production up 51% at Claflin (averaging 43 barrels per day in Dec)
- Prices on average rose 10%, an increase of $6.95 per barrel
- Cash of $0.6M

President and CEO of TIV, Maston Cunningham, pointed to growth in oil revenues as a clear indicator of the rousing success the company has had increasing output from Pleasant Valley, establishing new wells at Claflin, and the substantial price upside from recently signed agreements with Plains Marketing and ConocoPhillips (dovetailing with key market dislocation factors that allow CA heavy crude to fetch a premium WTI price for most of the year).

Cunningham underscored the solid logistical progress achieved during FY11 on all fronts, from efficiency and production, through to revenues and the financing backend. Additionally TIV has come to terms with the OPUS Special Committee for finalization of the restructuring agreement for distribution to the OPUS partners, neatly resolving the issue via a framework of accords that will ensure satisfaction of all parties, as well as optimized growth/productivity for the Pleasant Valley Oil Sands Project. A revised term sheet for the accords, which will guide finalization of the definitive agreements, is slated for the end of April.

Tri-Valley also secured definitive agreements with the trust of G. Thomas Gamble for a senior secured note for some $3.3M at a 14% annual interest rate, maturing Apr 30, 2013 (to replace three short-term notes made to TIV from 2011). Note achieved via warrant to purchase 3M shares of common TIV stock (exercise price of $0.19/share for five years post Mar 30, 2012), in addition to an agreement by the company to sign 2% of its overriding royalty interests on the Claflin lease (and 1% on other leases in and around Claflin), payable after note-related obligations are satisfied, as an inducement. Additionally, the Gamble trust made a $1.5M loan to TIV (Apr 3, 2012, also at a 14% rate, due Apr 30, 2013), which was used to satisfy a settlement related to crystallizing property rights associated with Pleasant Valley (Hansen property in the Oxnard Field).

Serious momentum for this domestic E&P and an aggressive growth strategy resulting in production increases are what the U.S. economy needs to satisfy concerns about Middle East throughput bottlenecking.

The company looks to several key milestones for 2012 as operations continue to advance:

- Securing SAGD (Steam Assisted Gravity Drainage) and additional well financing to grow Claflin, in addition to funding other corporate activities
- Implement SAGD program at Pleasant Valley to improve resource recovery (proposal for two wells, one injector, and one producer - targeting 2013 for completion/testing)
- Complete next stage of Claflin development, including three new horizontal wells, as well as recompletion of three vintage wells and the upgrading of surface facilities
- Sell idle drilling rig in Nevada

Information was also offered regarding ongoing precious mineral operations in Alaska:

- Exploration/Development partner McEwen Mining Inc. completed initial sampling (1,507 power auger soil, 150 rock samples, in addition to 2,836 feet of drilling in three holes, for another 616 samples) and sent the material off to the lab
- Airborne magnetic and gamma-ray spectrometry geophysical data was also gathered.
- The Shorty Creek site also saw some field work and the presence of a (possibly quite large) porphyry copper, gold, and molybdenum system was ascertained
- 73 soil and five rock samples were also taken from the Wilbur Creek area and TIV has follow-up exploration planned for summer this year, in conjunction with ongoing efforts to find a perfect strategic partner for further exploration there

The company also engaged Calgary-based AJM Deloitte to evaluate the Claflin and Brea leases, as well as engaging Cannon Engineering Corp. to handle front-end engineering design and cost structuring for the Pleasant Valley SAGD requirements.

FY11 financials are contained in TIV's Form 10-k (filed Apr 16 with the SEC).

Long-term debt totaled $3.5 million, with net production costs taking up an additional 20% of the pie, largely as a resulting of expanded production/steaming at Claflin. Total costs and expenses were up 36% to $14.3M (due to expanded production efforts), including some $2.4M in asset write-offs/impairment charges, as well as the $1.5M Hansen settlement. Net loss was $11.7M or $0.19/share (compared to $8.7M, or $0.24/share in 2010). Weighted average shares outstanding were 63.1M (compared to 36.7M in 2010) via the ATM facility sale with C.K. Cooper & Company, as well as the private placement financing (Apr 2011, 21.4M shares).

For more detail on today's data, or to stay up to date with the latest developments at Tri-Valley Corp., please visit the company's website at: www.Tri-ValleyCorp.com

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