HOUSTON, TEXAS, August 8,2000 - Texoil, Inc., (NASDAQ, Small Cap: TXLI) today announced operational highlights for the second quarter of 2000.  Texoil also increased current estimates of production for fiscal year 2000 to 1.2 million barrels of oil and 5.4 Bcf of natural gas.

DRILLING AND DEVELOPMENT ACTIVITIES

Mid-Ridge Prospect, Lafayette Parish, Louisiana:   The Harry Stagg #1 discovery well was drilled to a total depth of 13,715 feet and logged 173 net feet of Marg-Tex gas/condensate pay.  The well has been successfully completed and tested at a rate of 12.3 million cubic feet of natural gas per day (MMcfpd) and 592 Bbls of condensate per day (BCPD) through a one-quarter inch choke with 8,338 pounds of flowing tubing pressure. Production is expected to commence in approximately 30 days.  Actual production rates could exceed test rates, based on engineering data and analogous wells in the area.  The well qualifies for a five-year severance tax abatement.  Texoil has a 10% working interest, with an additional 10% working interest earned at well payout.  The well is expected to payout in approximately three months from the commencement of production.  The prospect was generated by a joint venture between Texoil, Bechtel Exploration Company and Pintail Petroleum, Inc.  Other working interest owners include Samedan Oil Corporation, the operator, and Andex Resources, L.L.C.

Lapice Field, St. James Parish, Louisiana:  Texoil drilled the Paul F. O’Brien  Jr. #1 well to a depth of 8,050 feet and logged 53 net feet of oil pay in six zones.  The well has been completed and perforated in the deepest zone and is producing 55 Bbls of oil per day (BOPD).  Texoil intends to perforate the main sand body and expects the well to flow at approximately 200 BOPD.  Texoil is the operator and has a 40% working interest before payout and a 47.5% interest after payout.  The prospect was generated by a joint venture between Texoil, Bechtel Exploration Company and Pintail Petroleum, Inc.

S. Kasper, Dewitt County, Texas:  Texoil has successfully recompleted the Kuester #2 at a rate of 1,500 Mcfpd.  Texoil is the operator and has a 100% working interest before payout and 91.6% thereafter.  

Vaquillas Ranch, Webb County, Texas:  The Bonebrake #3 and #5 wells  have been recompleted increasing field production to over 1,500 Mcfpd.  Texoil’s original rate at purchase of the field was 500 Mcfpd.  Texoil is the operator with a 76% working interest.

Yorktown, Dewitt County, Texas:  The Kulawick #3 well was successfully recompleted and is flowing approximately 1,400 Mcfpd and 15 BCPD.  Texoil is the operator with a 100% working interest.

ACQUISITIONS

Texoil acquired a 100% working interest in the Ben Bolt field located in Jim Wells County, Texas. The acquisition includes approximately 4,600 mineral acres and a 23 square mile 3-D seismic survey.  As of June  30, 2000, Texoil estimates that the acquired properties had total net proved reserves of  13.3 Bcf and 287,000 Bbls with a discounted present value of $16.7  million, based on the NYMEX three year pricing strip, adjusted for differentials and  held flat thereafter.   Current production is approximately 1,300 Mcfpd.  Approximately 41% of the reserves are classified as proved developed producing.  Texoil has identified numerous behind pipe recompletion opportunities.

Production:  Texoil expects to report second quarter production of 1,325 MMcf and 296 MBbls, up 26% and 69%, respectively, over the second quarter of 1999.  On a year-to-date basis, production totaled 2,665 MMcf and 597 MBbls, up 36% and 74%, respectively.  Accordingly, Texoil is increasing its fiscal year 2000 estimates to 1.2 million barrels of oil and 5.4 Bcf of natural gas, exclusive of additional acquisition and development activities.

Mr. Frank A. Lodzinski, Texoil’s Chief Executive Officer stated, “As of June 30, 2000, production rates are up significantly over comparable periods of the prior year.  Recent acquisition, development and exploration activities are expected to result in increased third quarter production.  As a result of performance through June 30, 2000, we are increasing our production estimates for the fiscal year 2000 (ending 12/31/00) to 1.2 million barrels and 5.4 Bcf, representing an increase of 10% and 15%, respectively, over estimates released earlier this year and up 57% and 28%, respectively, over fiscal year 1999.  Additional acquisitions and planned development activities could result in further increases.”

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, which are currently focused in Texas, South Louisiana and the Texas Gulf Coast.   

Forward-Looking Information

This news release includes "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 included in this news release other than those of historical fact are forward-looking statements.  Although the Company believes the expectations 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.