Treaty Energy Corporation Signs Letter of Intent with U.S. Fuels, Inc. on West Texas Exploration Agreement

NEW ORLEANS, May 9, 2013

The eventual transaction to result from this LOI is an "Exploration Agreement" which is to be finalized before July 31, 2013, relating to five (5) West Texas leases covering approximately 1,830 acres.  To view details on the binding Letter of Intent, please visit the following link: http://www.treatyenergy.com/sites/default/files/TECO_US_FUELS_LOI.pdf.

Treaty Energy is currently drilling two wells on the 40 acre Mitchell Lease in Taylor County, Texas which is included in this agreement.  The other four Texas leases are as follows:

• Knott Lease – 40 Acres in Taylor County
• Stroebel Lease – 700 Acres in Eastland County
• Standard Lease – 400 Acres in Taylor County
• Bridges Lease – 650 Acres in Stephens County

Andrew V. Reid, Chairman and CEO of Treaty Energy Corporation, stated, "Treaty will pursue drilling and rework opportunities that offer greater initial production and better ROI in the future, rather than reworking and operating stripper wells. Going forward, Treaty intends to concentrate on prime leases with future wells, similar to the two Mitchell wells that are currently being drilled and completed."

Mr. Reid further stated, "Treaty has funding in place to drill a number of additional wells without needing to seek additional funding for new drilling projects.  Management is confident that as production comes online from these initial new wells, drilling of additional wells will occur at a reasonable pace and will likely be funded through expected positive cash flows."

Since mid-Q1 2013, Treaty Energy has evaluated their existing lease inventory and has initiated plans to sell selected non-productive or underperforming leases to individuals or companies that are focused on small stripper wells and who are dedicated to servicing this type of lease.

With the execution of this agreement, Treaty Energy will have the capability to drill dozens of new wells in West Texas on these new leases.  The new wells will be state-of-the-art in nature and hold much more promise and longevity for Treaty Energy and its shareholders. Implementing this new strategy will help Treaty to achieve the goals set by management.