GENOIL INC. ANNOUNCES APPROVAL OF GRANT OF STOCK OPTIONS AND SHARES FOR DEBT APPLICATION

TSXV SYMBOL: GNO
OTCBB SYMBOL: GNOLF.OB

Calgary, Alberta, Canada: Genoil Inc. (the “Corporation”) reports that the board of directors of the Corporation (the “Board”) has completed a review of compensation levels for the Corporation’s directors, officers, employees and consultants and has consequently approved the grant of incentive stock options to and the establishment of base compensation levels for such individuals for 2007.

Subject to receipt of all necessary shareholders approvals, the Board has approved the grant of an aggregate of 8,968,750 options to acquire common shares of the Corporation at an exercise price of $0.45, being the closing price of the Corporation’s shares on the TSX Venture Exchange on the date preceding the date Board approval for the grant was made. Of the 8,968,750 options approved for grant 640,000 have been approved for grant to the Corporation’s employees and consultants with an additional 1,493,750 options having been approved for grant to the Corporation’s executive officers and outside directors in recognition of their efforts during 2006. Additionally, of the 8,968,750 options approved for grant 2,335,000 have been approved for grant to the Corporation’s employees and consultants with an additional 2,000,000 being approved for grant to officers of the Corporation, as an inducement for their continued efforts and as part of their compensation for 2007. 25% of the options described above vest immediately with an additional 25% to vest annually on January 31st. Lastly, 2,500,000 of the 8,968,750 options approved for grant have been approved for grant to the Corporation’s Chairman and Chief Executive Officer in lieu of any salary compensation for 2007, all of which such options vest immediately.

The approval of the grant of these options resulted from a recommendation made by the Corporation’s Chairman and Chief Executive Officer with the unanimous approval of the Board. The recommendation was based upon a review of the current, competitive industry conditions and with the objective being the retention of the Corporation’s key individuals. The Corporation’s Compensation Committee had previously commissioned an independent third party compensation expert to report on compensation matters given the current energy industry compensation levels for similar organizations and utilized this report to provide a baseline in making its recommendations regarding appropriate compensation for the Corporation’s Board and Chairman and Chief Executive Officer. The granting of all of the options approved by the Board are conditional upon the receipt of all necessary regulatory and stock exchange approvals and in particular, on the receipt of disinterested shareholder approval for the increase in options grantable under the Corporation’s stock option plan at the Corporation’s next annual and special meeting of shareholders.

As indicated, of the options approved for grant, an aggregate of 2,133,750 are to be granted in recognition of contributions during 2006. Pursuant to the Corporation’s desire to pay top of market compensation in order to retain top level management, the Board took note of the recent volatility in the Corporation’s share price and the effect such volatility has on the traditional incenting role played by the granting of stock options. Following an analysis of the exercise prices of options previously granted by the Corporation the Board, based on the recommendations of senior management, determined that certain of the Corporation’s employees, consultants and officers were not currently being provided with an equity incentive in accordance with the Corporation’s compensation philosophy. As a result of this analysis and based on a review of the role played by, and past performance of, such employees, consultants and officers the Board approved the granting of these 2,133,750 options, subject to shareholder approval, to provide such individuals with further incentive to serve and promote the interests of the Corporation.

The Corporation also reports that the outside directors of the Corporation have agreed to enter into debt cancellation agreements with the Corporation whereby such directors have agreed to forgive an aggregate $223,000 owing to them by the Corporation for unpaid directors fees in exchange for the issuance of approximately 660,741 common shares of the Corporation at a deemed price of $0.3375 per share. The shares to be issued in connection with the settlement of these debts are subject to a four month hold period from their date of issuance and are subject to receipt of all necessary regulatory approvals.

Genoil is a technology development company providing solutions to the oil and gas industry through the use of proprietary technologies. The Genoil Hydroconversion Upgrader is designed to economically convert heavy crude oil into more valuable light synthetic crude, high in yields of transport fuels, while significantly reducing the sulfur, nitrogen and other contaminants in the oil.

Genoil’s shares are listed on the TSX Venture Exchange under the symbol GNO, as well as on the OTC Bulletin Board under GNOLF.OB.

For more information on Genoil Inc. visit www.genoil.net
David Lifschultz
Chairman and CEO
(212) 688-8868
(914) 393-5800

ADVISORY: The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.