December 31, 2008 18:00 ET

Victory Energy Provides Update on Natural Gas Drilling and Production

CARSON CITY, NV--(Marketwire - December 31, 2008) - Victory Energy Corporation (OTCBB: VYEY), a developmental stage petroleum company primarily dedicated to energy-related opportunities, today provided an update on drilling and production progress at its Canyon Sandstone natural gas field in the Texas Permian Basin.

Jon Fullenkamp, President of Victory Energy Corporation, stated, "We are pleased with the progress of our nine producing Canyon Sandstone gas wells. All are producing natural gas in accordance with historical information from the gas field. While the initial outcome at our first deep Strawn well was not as anticipated, we will continue the drilling as a large horizontal well. We have successfully negotiated with our drilling contractor who has conceded to work within our agreement."

The first deep Strawn well (V154-6) was drilled to approximately 12,000 feet in depth when the drill string was lost in the well bore, requiring the well to be plugged back to the Canyon Sandstone formation at approximately 5,200 feet. Based on this development and the site's broad 40 acre spacing, the decision has been made to complete (V154-6) as a large horizontal well. The drilling contractor has discounted the horizontal drilling fee by approximately 50% of the cost of a standard horizontal well and has agreed to drill a replacement deep Strawn well during 2009 at no additional cost to Victory Energy.

The second deep Strawn well (V-127) is an immediate offset to the first deep well. The Corporation anticipates similar strong natural gas shows from this well in the Strawn formation at approximately 12,500 feet. The drilling rig to take the well to the target depth of 12,500 feet is due to arrive on location before the end of the first quarter of 2009.

The horizontal laterals to be drilled in two other wells (V153-8 and V115-7) targeting the Canyon Sandstone formation at approximately 5,200 feet, will commence as rig availability permits. The Corporation is actively seeking a qualified horizontal drilling expert to be on location during execution of the lateral drill.

About Victory Energy Corporation:

Victory Energy Corporation (www.victoryenergyoilandgas.com) is a publicly traded, developmental stage petroleum company primarily dedicated to energy-related opportunities. The Company goal is to evaluate profitable options, develop a solid foundation through leadership and sound business acumen, and acquire producing wells as well as other potentially profitable prospects within the Oil & Gas Industry.

Certain statements contained herein are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in filings made by the Company with the Securities and Exchange Commission. The Company's filings may be accessed at the SEC's EDGAR system at www.sec.gov. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company cautions readers not to place reliance on such statements.