TEXOIL, INC.

NEWS RELEASE FOR IMMEDIATE

RELEASE

COMPANY CONTACT 110 Cypress Station Drive

Frank A. Lodzinski Suite No. 220

Chief Executive Officer Houston, Texas 77090

(281) 537-9920

(281) 537-8324 - Fax

TEXOIL, INC., ANNOUNCES PENDING ISSUANCE OF

SERIES A CONVERTIBLE PREFERRED STOCK IN THE AGGREGATE AMOUNT

OF $22.0 MILLION

HOUSTON, TEXAS, October 12, 1999 - Texoil, Inc., (NASDAQ Small Cap: ATXLI@, Boston Stock Exchange: ATXL@) announced that the Company entered into a Series A Preferred Stock Purchase Agreement today with Quantum Energy Partners, L.P. ("Quantum@), affiliates of EnCap Investments L.L.C. ("EnCap@), the V&C Energy Limited Partnership (AV&C@) and certain other individual investors. First Union Securities, Inc., arranged the transaction and acted as financial advisor to Texoil. The Company intends to issue 2,750,000 shares of Series A Convertible Preferred Stock ("Preferred Stock@) at $8.00 per share. The total consideration of $22.0 million will be used to implement the Company=s capital development program, retire subordinated notes, reduce bank indebtedness and for general corporate purposes. The dividend rate is 9% per annum, payable in additional shares of preferred stock or in cash. The Preferred Stock may be converted at any time at the election of the holders, and is automatically convertible after December 31, 2002, based on the achievement of certain net asset and per share values. Each share of preferred stock is convertible into two shares of common stock, at a $4.00 per share conversion price. The conversion price is subject to certain anti-dilution adjustments. Investors have been granted certain registration rights and protective covenants and have certain rights to elect members to the Company=s Board of Directors. Quantum is the lead investor and will acquire 1,875,000 shares for $15.0 million. Quantum was not previously affiliated with the Company. Other investors include current officers, directors and shareholders of the Company who are participating on the same terms as Quantum. Closing, which is contingent upon shareholder approval, is expected to occur in November 1999. The Company=s Board of Directors unanimously approved the offering and recommends that shareholders vote for the issuance. Officers and directors and certain other significant shareholders are expected to vote for the issuance. Additional details are available by contacting Mr. Frank A. Lodzinski, Jerry M. Crews or Ralph D. Hollingshead at Texoil=s corporate offices. Additional details of the transaction will also be available by reference to Form 8-K and a proxy statement expected to be filed with the Securities and Exchange Commission within the next several days.

Mr. Frank A. Lodzinski, the Company=s President and Chief Executive Officer stated, "The issuance of the convertible preferred stock will allow the Company to fully implement its capital development program, refinance its subordinated debt and reduce its bank debt. We welcome Quantum Energy Partners, L.P. to our investor group and thank them for their participation. We also thank those shareholders, officers and directors who elected to participate in the offering, for their continued support and confidence in our management team and business strategy. With the closing of this financing transaction, we have accomplished our goals for 1999 and further positioned the Company to continue its profitable growth. The management and Board of Directors of Texoil are clearly focused on increasing shareholder value.@

Texoil, Inc. (www.texoil.com), an independent energy Company, acquires and develops oil and gas reserves through an active and diversified program that includes purchases of reserves, re-engineering, development and exploration activities, currently focused in Texas, South Louisiana and the Texas Gulf Coast. On December 31, 1997, the Company acquired Cliffwood Oil & Gas Corp., in a reverse merger which resulted in a comprehensive change of management and business strategy and substantially improved the Company=s overall financial resources.

Forward-Looking Information

This release contains "forward-looking statements@ within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 23E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this report, are forward-looking statements regarding the Company=s business strategy, plans, objectives and beliefs of management for future operations. Although the Company believes the expectations and beliefs reflected in forward-looking statements included in this release are reasonable, it can give no assurance that such expectations will prove to have been correct. Forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ from those envisioned by such forward-looking statements.