Treaty Energy Corporation has established Treaty Energy Drilling, LLC, a Texas company, that is its newest wholly-owned subsidiary.

Stephen L. York, Treaty Energy's Vice President of Acquisitions & Operations, stated, 'I have filed all required documents with the Secretary of State of Texas to establish our new business entity, Treaty Energy Drilling, LLC, effective April 29, 2011. The drilling rig that was acquired by the Company on April 20th is now listed as an asset of this new company. In addition, this rig which is under contract currently has been drilling for the previous two weeks for independent oil companies. There exist currently six to eight more wells to be drilled under the contracts that were acquired along with this rig purchase. During this transition period all profits received from the drilling services will be escrowed into a separate account and transferred to Treaty Energy's account once the final payment on the rig is made to the seller.'

Mr. York added, 'Treaty Energy Drilling, LLC will continue forward, drilling independent wells and generating revenue. As soon as Treaty Energy and C & C Petroleum become fully integrated into the RRC system, Treaty Energy Drilling will fulfill contracts and begin drilling wells for Treaty's newly acquired oil leases in Texas.'

Mr. York added further, 'Our new drilling company will be acquiring a second drilling rig immediately to perform all drilling operations that will be required in Belize.'

Andrew V. Reid, CEO of Treaty, stated, 'We have made the decision to create our own drilling company, Treaty Energy Drilling, LLC, that will drill and develop all our wells in Belize, and we are in negotiations to acquire the appropriate rig for this task. This will allow Treaty Belize Energy Limited, our Belizean operating company, to control the daily logistics and timeframes, to be more efficient and to have better quality control of the day to day operations that can not be supplied as effectively by outsourcing to a drilling contractor.'

The Company indicated that all necessary contractor services have been addressed and are available to Treaty in Belize, to include: oil well cement companies, acid wash/frac companies, perfing companies, and pulling swabbing services, etc.

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