Fellows Energy Mobilizes Workover Rig to Commence Drilling on the Carbon County Project
Tuesday April 11, 9:12 am ET
BROOMFIELD, Colo.--(BUSINESS WIRE)--April 11, 2006--Fellows Energy Ltd. (OTCBB:FLWE - News; "Fellows") announced today that it has begun mobilization activities to move a workover rig in position to commence workover operations on the Carbon County project, along with its joint venture partner, MBA Resource Corp. Fellows has entered into an agreement with Wildcat Energy Services of Blanding, Utah to mobilize a workover rig from Parachute, Colorado to its Carbon County project near Price, Utah. Fellows will begin reworking the first in a two well workover program as soon as the workover rig can be moved onto location and "rigged up". As stated in a previous announcement, Fellows management hopes that this work will increase gas production of the field dramatically
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Fellows and MBA are completing plans for the initial reworking program and a preliminary budget of $215,000 has been formulated for the first two wells to be reworked, one producing well and one shut-in well.
The Carbon County project comprises 5,953 gross acres (4,879 net acres) with three gas wells currently producing approximately 20 million cubic feet ("mmcf") of natural gas per month as well as five shut in wells, 3 of which are previous producers. Current production is derived from the Ferron sandstone. The Carbon County acquisition also includes an associated gas gathering system and a 6 mile pipeline and compression facility. Gas is marketed into the transmission pipeline operated by Questar Gas Resources which crosses the project acreage.
George Young, President of Fellows Energy, stated that "we intend to move quickly to attempt to establish significant production from the shut-in wells and reestablish production levels previously experienced in the producing wells. Our aim is to bring about the potential indicated by the Sproule report, and along with our recently-established production in the Creston project, achieve continuous cash flows for the Company in a balance between oil and gas revenues."
Sproule & Associates of Denver, Colorado completed a "Reserve and Economic Evaluation" of the project in October 2005. Sproule reported that production from the three currently producing wells can be significantly enhanced through operating improvements and that the five shut in wells also have potential to be brought into profitable production. Sproule also concluded that the acreage contains potential for up to an additional 20 wells on 160-acre spacing, with total proven, probable and possible reserves of 20 billion cubic feet ("Bcf"). Fellows believes from its own analysis and from the Sproule evaluation that it can increase current production in the three producing wells and initiate profitable production in the five shut-in wells. Fellows also believes that some of the 20 additional well sites can be drilled and produce gas from the Ferron formation (sandstone and coals) in excess of the production rates currently experienced in the existing wells.
About Fellows
Fellows combines a seasoned management team with exploration targets focusing on coal bed methane, shallow gas and oil and gas potential.
Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as probable, possible and potential, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 10-KSB, File No. 0-33321, available from us at 370 Interlocken Boulevard, Suite 400 Broomfield, Colorado 80021. You can also obtain this form from the SEC by calling 1-800-SEC-0330.
Examples of such disclosures would be statements regarding "probable," "possible," or "recoverable" reserves among others.
Management hopes these transactions will bring additional value to the shareholders of Fellows Energy. There is no guarantee that the projects that Fellows has recently acquired will increase the value of its shares of common stock, or that Fellows will acquire rights to explore and operate any other such projects, or that in the event that it acquires rights to explore and operate other such projects, that these actions will be successful or increase the value of Fellows' common stock.
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