Oil and Gas Main (fka OGM)

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Terax Energy Provides Barnett Shale Operational Update
Wednesday June 21, 3:00 am ET


DALLAS, June 21 /PRNewswire-FirstCall/ -- Terax Energy Inc. (OTC Bulletin Board: TERX - News) began completion of its third well, the Mitchell #3-H, on May 22, 2006, with a four-stage fracture stimulation of the Barnett Shale formation. In early June, the well began flowing back approximately 55 bbls of frac water per hour, which has since decreased to approximately 44 bbls per hour.
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The Mitchell #3-H well's natural gas production rate has been steadily increasing and is currently at approximately 650 mcf per day on a 32/64 choke. The well has a casing pressure of approximately 780 psi and a flowing tubing pressure of approximately 400 psi.

The fracture stimulation for the Mitchell #4-H well is scheduled for July 5, 2006. Terax is currently working to secure frac dates for wells #5-H and #6-H.

The Mitchell #2-H well -- which began completion operations on May 8, 2006, with a five-stage fracture stimulation of the Barnett Shale formation -- began the flow back of frac water on May 22, 2006, at approximately 42 bbls water per hour, which has now decreased to approximately 20 bbls per hour.

The Mitchell #2-H well's natural gas production rate has reached up to 640 mcf per day and 40 bbls of 41 gravity oil per day and is currently producing approximately 350 mcf and 20 bbls of oil per day on a 34/64 choke. The well has a casing pressure of approximately 600 psi and a flowing tubing pressure of approximately 250 psi.

Terax has determined that the Mitchell #1-H well has a bacteria problem and plans to begin chemical treatments this week. Terax has opted for a treatment procedure which will keep the well producing. Terax does not know how much, if any, the bacteria problem has affected production from the #1-H well, which is currently producing about 3 bbls of frac water per hour and approximately 135 mcf per day on 34/64 choke. Terax will continue to monitor the well during the treatment procedure for any changes or improvements in well patterns. The well currently has a casing pressure of approximately 280 psi and a flowing tubing pressure of approximately 78 psi.

"We are encouraged by the production numbers of our first three wells in the Barnett Shale," said Lawrence Finn, president, chief executive officer and chief financial officer of Terax. "Specifically, the #2-H and #3-H wells have indicated positive natural gas production rates, especially the #3-H, which has significantly higher pressure than the other wells. We look forward to the fracture stimulation of the #4-H well in early July and to continuing our drilling operations in the Barnett Shale formation."

Terax has completed the extension of its gathering system, laying four additional miles of eight-inch pipeline, to connect compressor station "B," which will service the Mitchell #3-H through #6-H wells. The Mitchell #3-H and #4-H wells are connected to this compressor station, and Terax is currently completing the flow lines for the #5-H and #6-H wells.

About Terax Energy

Terax Energy Inc. (OTC Bulletin Board: TERX - News) is an independent gas exploration, development and production company, headquartered in Dallas. The sole focus for Terax is the optimal exploitation and development of approximately 27,500 gross acres in two mostly contiguous blocks, consisting of prospective Barnett Shale development acreage located in Erath and Comanche Counties, Texas. For more information, visit http://www.teraxenergy.com .