POCC
PENN OCTANE CORPORATION
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FOR  IMMEDIATE  RELEASE
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  PENN OCTANE CORPORATION ANNOUNCES RESTRUCTURING OF PROMISSORY NOTES ORIGINALLY
                              DUE DECEMBER 15, 2000


PALM  DESERT,  CA  - FEBRUARY 9, 2001.  Penn Octane Corporation (NASDAQ SmallCap
market:  POCC)  today  reported  that  the Company had successfully restructured
$5,409,000  of  the $5,654,000 in principal amount of its promissory notes which
were  originally  due on December 15, 2000 to provide for a new maturity date of
December  15,  2001  (subject  to  earlier  repayment  under  certain  specified
circumstances).  Those notes which were not restructured have been repaid by the
Company.  In  connection  with  the  restructuring  of the promissory notes, the
Company  is  required  to  pay  additional  interest, issue additional warrants,
provide  collateral  to  secure  the  Company's  repayment obligations under the
restructured  promissory  notes  (including a security interest in substantially
all  of  the  Company's assets, and, until such security interest is granted and
perfected,  a  pledge  by  the Company's President of 2,000,000 shares of common
stock of the Company owned by the President), register the shares to be acquired
upon  exercise of the newly issued warrants under the Securities Act of 1933, as
amended,  and  reduce the exercise prices and extend the expiration dates of the
warrants  that  were issued to the holders of the notes in connection with their
original  issuance.

Contemporaneously  with  the  aforementioned  restructuring,  the  Company  also
completed  a private placement of $991,000 in principal amount of its promissory
notes  on  similar  terms.

Certain of these statements in this news release are forward-looking statements.
While  these  statements  reflect  the  Company's  beliefs,  they are subject to
uncertainties  and  risks  that could cause actual results to differ materially.
                                      # # #

                            Contacts for the Company:
                             Penn Octane Corporation
                         Jerry Richter, President & CEO
                       Ian Bothwell, Vice President & CFO
                                  760.772.9080

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    77-530 Enfield Drive, Bldg. D,    Palm Desert, CA  92211    (760) 772-9080
               Facsimile  (760) 772-8588       pennoctane@aol.com


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