Saxon Oil Signs Letter of Intent to Acquire Oil Production

    DALLAS, August 2 /CNW/ - Saxon Oil Company Ltd. ("Saxon") (TSX
Letter of Intent (LOI) to acquire working interests in 17 oil and gas leases
with 21 producing wells operated by Castle Resources Inc. of Schoenchen,
Kansas, for $2,170,004 USD in cash. The purchase is conditional on a due
diligence review to be completed by Aug 24 and is subject to completion of a
formal purchase and sale agreement within 30 days of the LOI. The acquisition
is scheduled to close on August 30, 2007.

    Located in north central Kansas, these wells typically produce from the
Lansing-Kansas City or Arbuckle formations at depths ranging from 3,100 to
4,400 feet. Saxon, which will acquire working interests varying from 59% to
89% in these wells, will act as operator for all 17 leases. Based on the wells
actual production history, as reported by the Kansas Corporate Commission in
April 2007, these wells averaged 94 barrels of oil per day (BOPD). The net
production to Saxon's proposed interest was 58 BOPD.

    This acquisition is considered a related-party transaction because family
members of Richard G. Green, CEO and President of Saxon Oil Company, own some
of the interests being acquired. Mr. Green also owns working interests in a
number of these wells but did not sell and did not participate in the
negotiations for these wells. As requested by Saxon's management and board of
directors, a third-party evaluation of the reserves was performed by LaRoche
Petroleum Consultants, Dallas, Texas, prior to negotiation of this

    "This acquisition is important to Saxon's growth strategy for several
reasons," commented Steven D. Moore, CFO of Saxon Oil, who is handling
negotiations on behalf of the Company. "First, these producing oil assets
increase our reserves base and monthly cash flow. Second, before this
acquisition Saxon's production was primarily natural gas; because the wells to
be acquired are all oil producing wells, our portfolio of production will
become more evenly balanced between oil and gas. And third, the acreage
acquired with these leases provide Saxon with a number of exploration and
development drilling opportunities."

    Saxon views Kansas is an attractive growth area. Saxon will continue to
look for assets in Kansas that compliment its existing assets and implement
its growth strategy. Historically, Kansas ranks fifth among states in the
United States in cumulative production with over 30 trillion cubic feet of gas
(Tcf) and over 6.6 billion barrels of oil produced to date. Still, significant
oil and gas reserves remain throughout central Kansas. In addition, central
Kansas holds some of the largest reserves of helium in the world, a quickly
depleting commodity that currently sells for more than $70 per thousand cubic

    About Saxon Oil Company Ltd:

    Saxon Oil Company is a Tier One Texas-based Canadian company, trading on
the TSX Venture Exchange under the symbol SXN. The Company is an independent
oil and gas company engaged in the acquisition, development and production of
oil and natural gas reserves. The Company seeks to deliver strong shareholder
returns through an effective exploration and development program that
incorporates sound business practices with the latest oil field technologies.
The goal is to participate whenever possible with quality partners with
specialized local expertise in project areas rather than prospects. This
strategy should steadily increase proven reserves of oil and natural gas -
which, in turn, will lead to enhanced cash flows and earnings per share.

    This press release includes certain "Forward-Looking Statements" within
the meaning of section 21E of the United States Securities Exchange Act of
1934, as amended. All statements, other than statements of historical fact,
included herein, including without limitation, statements regarding plans for
completion, production potential, other targeted areas and expansion and
development plans and objectives of Saxon Oil Company Ltd. are forward-looking
statements that involve various risks and uncertainties. There can be no
assurance that such statements will prove to be accurate and actual results
and future events could differ materially from those anticipated in such

    The TSX Venture Exchange does not accept responsibility for the adequacy
and accuracy of this release.

For further information:

For further information: Saxon Oil Company Ltd. Patrice Nazareno,

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