“We are also very pleased with the progress we have made in a short time in developing the Claflin project,” continued Mr. Cunningham. “The 3-D seismic data will allow better precision in selecting the well locations, and better geologic control during our drilling operations, especially for the horizontal wells which we have planned for the project.”Litigation Settlement In September 2009, the lessors of the Lenox and Snodgrass oil and gas leases filed a quiet title action against Tri-Valley, seeking termination of the leases. The Company had drilled one horizontal well, reworked several others on the leases, and upgraded surface facilities on the property. Operations were initially suspended in early 2009, pending the installation of an improved electric distribution system required by a local regulatory body to address air emissions standards, and delayed further by the litigation. The lawsuit was filed at the Superior Court in Ventura County, California. Under the terms of the settlement, effective February 22, 2011, the related oil and gas leases have been amended as follows:
- Primary term of the leases has been extended by three years until May 1, 2014.
- The deadline for drilling one exploration well below 6,000 feet has been extended to May 1, 2013.
- The requirement to relinquish the “deep rights” if no commercial production below 6,000 feet is established by May 1, 2013 has been removed.
- Lessors have waived payment of 2009 and 2010 annual surface rentals and minimum royalties.
Tri-Valley was represented in the litigation by Luna & Glushon, Century City, California, which handled all pre-trial pleadings and discovery and represented Tri-Valley at a bench trial during January 2011, resulting in a favorable tentative ruling by the Court. The Managing Partner of Luna & Glushon, Dennis Luna, who assisted Tri-Valley in the original lease negotiations, was the principal witness on behalf of Tri-Valley at the trial. The settlement was also negotiated by Luna & Glushon to resolve the matter prior to a final judgment by the Court.About Tri-Valley Tri-Valley Corporation explores for and produces oil and natural gas in California, and has two exploration-stage gold properties in Alaska. Tri-Valley is incorporated in Delaware and is publicly traded on the NYSE Amex exchange under the symbol "TIV." Our Company website, which includes all SEC filings, is www.tri-valleycorp.com. Forward-looking Statements This press release contains forward-looking statements that involve risks and uncertainties. Actual results, events, and performance could vary materially from those contemplated by these forward-looking statements which include such words and phrases as exploratory, wildcat, prospect, speculates, unproved, prospective, very large, expect, potential, etc. Among the factors that could cause actual results, events, and performance to differ materially are risks and uncertainties discussed in "Item IA. Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2009, and in “Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" as disclosed in the Company’s Quarterly Report on Form 10-Q for the most recent quarter ended September 30, 2010.