Rio Vista Energy Partners L.P. Subsidiaries Enter Into Definitive Agreements to Acquire Interests in Oil Producing Properties and Associated Pipeline Gathering Systems in Oklahoma

Business Wire, Oct 29, 2007

Letter of Intent Signed with Senior Secured Lender for Credit Facility of up to $30 Million in Connection with the Oklahoma Properties

Acquisitions Expected to Close In November 2007; Operations Expected to be Included in Rio Vista's Fourth Quarter Results

BROWNSVILLE, Texas -- Rio Vista Energy Partners L.P. (NASDAQ: RVEP), or "Rio Vista", an energy master limited partnership, announced today that its wholly-owned subsidiaries, Rio Vista Penny LLC and Rio Vista GO LLC, have entered into three separate definitive agreements to acquire assets and/or equity including certain leasehold interests of oil and gas producing properties (the "Properties") and associated pipeline gathering systems from three privately held companies (the "Companies") based in East Central Oklahoma which have geographically contiguous operations. The individual transactions are expected to close on or before November 19, 2007. In connection with the above agreements, Rio Vista has also entered into a letter of intent with a senior secured lender for the issuance of a replacement credit facility. The financial operations of the Properties are expected to be included in Rio Vista's consolidated fourth quarter results. In connection with the Oklahoma agreements, Rio Vista has recently filed with the Securities and Exchange Commission a Current Report on Form 8-K which more fully outlines the terms of the agreements and the letter of intent.

The Properties located in East-Central Oklahoma are situated in McIntosh, Haskell and Pittsburg Counties. The leases to be acquired comprise approximately 22,000 gross HBP (held by production) acres, a 25-mile pipeline that gathers natural gas from several Properties located in Haskell and Pittsburg Counties and a 40-mile pipeline that receives natural gas from leases in the Texanna area north of Lake Eufaula and delivers to the ONG-R-900 intrastate pipeline in McIntosh County. The Companies collectively control a majority interest in a total of 93 operated wells and 16 non-operated wells primarily from Booch sand, Hartshorne Coal Bed Methane, George's Fork and Spiro wells. One of the Companies is presently involved in the development of the shallow reserve targets. There are an additional 114 identified drilling locations in the upper formations with upside potential. Rio Vista's subsidiaries intend to explore the additional upside opportunities that exist in the deeper formations located on the Properties such as the Caney Shale and Woodford Shale. Based on recently completed engineering reports of the leased interests being acquired, the Properties have estimated natural gas reserves of 60.5 million MCF, of which approximately 9.1 million MCF and 51.4 million MCF are estimated to be comprised of proved developed reserves and proved undeveloped reserves, respectively.

Under the terms of the definitive agreements, the aggregate purchase price payable by Rio Vista Penny and Rio Vista GO in all three transactions is approximately $29.0 million, comprised of the assumption of senior secured debt of approximately $17.1 million (including accrued interest of approximately $0.6 million), assumption of $0.5 million of third party obligations and payment of $11.4 million to the Companies, paid as follows: the issuance of approximately $1.5 million of Rio Vista common units, the issuance of a short-term convertible note of $0.5 million to one of the Companies and $9.4 million in cash. Approximately $3.0 million of the funding for the cash payment to one of the Companies is to be funded through an additional loan made to Rio Vista at closing by the senior secured lender.

In connection with the agreements, Rio Vista Penny and Rio Vista GO have already paid to two of the Companies approximately $2.3 million in non-refundable deposits which are to be credited against the cash portion of the purchase price required at closing. The closing of the transactions are subject to completion of satisfactory due diligence by Rio Vista Penny and Rio Vista GO, execution of definitive agreements with the senior secured lender and other customary closing conditions.

About Rio Vista Energy Partners L.P.

Rio Vista is a master limited partnership focused on acquiring and developing oil and gas exploration, production and transportation assets. It currently owns certain liquefied petroleum gas assets, including pipelines running from a terminal facility in Brownsville, Texas to a terminal facility in Matamoros, Mexico owned by Rio Vista. Rio Vista is also engaged in liquid bulk storage, transloading and transportation of chemicals and petroleum products through its assets and operations in Hopewell, Virginia. Rio Vista seeks to grow through the acquisition of qualified oil and gas assets. Penn Octane Corporation (OTCBB: POCC) is the general partner of Rio Vista.

Forward-Looking Statements

Certain of the statements in this news release are forward-looking statements, including statements regarding the potential acquisition of the Properties in East Central Oklahoma, the potential replacement credit facility for the Properties, future production of oil and gas resulting from such acquisitions, estimated natural gas reserves of the Properties, capital risks of expanding production, possible acquisition of other qualified oil and gas assets, and prospects for the LPG transportation business and the bulk liquid business. Although these statements reflect Rio Vista's beliefs, they are subject to uncertainties and risks that could cause actual results to differ materially from expectations. If conditions to closing are not satisfied, Rio Vista's subsidiaries may be unable to complete the planned acquisitions or the replacement credit facility, other acquisitions of qualified oil and gas assets or other transactions. Even if completed, these acquisitions or transactions may not prove successful, may substantially increase Rio Vista's and its subsidiaries' indebtedness and contingent liabilities, and may present integration difficulties. Continuation and expansion of production may require unforeseen capital investment. Future production may be lower than anticipated. Actual natural gas reserves may prove lower than estimated. If Rio Vista does not have sufficient capital resources for acquisitions or opportunities for expansion, Rio Vista's growth will be limited. If Rio Vista does not receive sufficient revenues from the use of its assets, Rio Vista would suffer material adverse consequences to its business and will not have sufficient available cash to pay minimum quarterly distributions. In addition, Rio Vista's credit facilities may restrict the amount of cash available for distributions. Rio Vista may not distribute sufficient cash to meet the tax obligations of unitholders, which are dependent on the specific tax circumstances of each unitholder. Additional information regarding risks affecting Rio Vista's business may be found in Rio Vista's reports on Form 8-K, Form 10-Q and Form 10-K and its registration statement on Form 10 and Penn Octane Corporation's reports on Form 8-K, Form 10-Q and Form 10-K filed with the Securities and Exchange Commission.