Petrol Oil and Gas Provides Update on Neodesha Production and Development Activities
Monday July 31, 8:00 am ET
OVERLAND PARK, Kan.--(BUSINESS WIRE)--July 31, 2006--Petrol Oil and Gas, Inc. (OTCBB: POIG - News) today provided an update on activities at its Petrol-Neodesha coalbed methane ("CBM") project, which is located in Wilson and Neosho counties in southeastern Kansas.
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Since January 1, 2006, Petrol has completed six new multi-zone production wells on its Petrol-Neodesha ("Neodesha") properties, with a 100% success rate. Currently these six new wells are producing approximately 240 thousand cubic feet of gas per day (Mcfd). Overall Petrol-Neodesha production has increased from 2,598 Mcfd on January 1, 2006 to a current rate of 2,860 Mcfd. In addition, Petrol has drilled five successful multi-zone wells that are awaiting completion. Drill stem tests on these five wells ranged from a low of 40 Mcfd to a high of 415 Mcfd. Petrol plans to drill and complete approximately 14 additional Neodesha wells during the balance of 2006, for a total of approximately 25 new wells in the project for the full year.
Petrol-Neodesha currently includes 95 wells on its 10,000 gross acres that are producing approximately 2,860 Mcfd Petrol has hedged approximately 2,000 Mcfd through March 2007 at an average price of $8.80 per Mcfd, with the remainder of the Neodesha production sold at market price.
"In May 2006, we implemented advanced stimulation methodologies and re-completion techniques at the Neodesha project," stated Paul Branagan, Chief Executive Officer of Petrol. "We have begun acquiring and analyzing real-time data during our fracture stimulation treatments. Once management has a sufficient data set, we will utilize state-of-the-art fracture modeling to assist production engineers in defining the extent that hydraulic fractures penetrate and stay within the production zones. The program is designed to improve our overall understanding of the effectiveness of multi-zone stimulations and their ability to enhance production and reduce stimulation costs."
Petrol has also targeted a number of wells that are currently producing from only one zone, such as the Mulky-Summit, for re-completion. The objective of this re-completion program is to access and, where applicable, tap into and produce other gas-bearing zones that were bypassed when the previous owners drilled the wells. Petrol believes that potentially significant untapped quantities of gas (i.e., 'bypassed gas') may be located behind pipe, and that such gas can contribute to Petrol's overall production and reserve base.
"We believe that we can expand the number of producing gas wells in the Neodesha project significantly over the next several years," continued Branagan. "Because the coals in Neodesha have been partially 'dewatered' by offset wells, gas production from new CBM wells begins within days of completion. In contrast, the coals in our new Coal Creek project, about 55 miles to the north, are in the very early-stages of de-watering and thus substantive gas production is delayed between 6 to 9 months. We are continuing an aggressive development program in the Coal Creek project to supplement production from our Neodesha Project."
Petrol has retained Pinnacle Technologies of Houston and Pentagon Technical Services of Denver to provide technical consulting and field support on specific fracturing/chemical strategies to optimize its completion techniques, reduce operational costs and improve production at its Neodesha and Coal Creed project areas.
About Petrol Oil and Gas, Inc.
Petrol Oil and Gas, Inc. is an oil and gas exploration and development company currently involved in the development of oil and natural gas from leases encompassing approximately 165,000 gross acres in Kansas and Missouri. Its common stock is traded on the OTC Bulletin Board under the symbol "POIG."
Forward-Looking Statement: The statements in this press release regarding the Petrol-Neodesha Project, the number of new and completed wells in this area, new well success rates, Petrol-Neodesha operations, the Coal Creek Project, the amount of gas production being derived from the wells, amount of gas hedged, any implied or perceived benefits from Petrol's CBM assets, and any other effects resulting from any of the above are forward-looking statements. Such statements involve risks and uncertainties, including, but not limited to, actual amount of gas production at the Petrol-Neodesha Project, the continued production of gas at historical rates, the actual de-watering delay and anticipated ongoing delays at Coal Creek Project, sufficient additional funding to complete the Coal Creek Project, costs of operations, delays, and any other difficulties related to producing minerals such as oil or gas, Petrol's continued maintenance of its properties, price of oil or gas, marketing and sales of produced minerals, risks and effects of legal and administrative proceedings and governmental regulation, future financial and operational results, competition, general economic conditions, and the ability to manage and continue growth.
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements Petrol makes in this news release include market conditions and those set forth in reports or documents Petrol files from time to time with the SEC. Petrol undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Contact:
Petrol Oil and Gas, Inc.
Investor Information, 702-454-7318
www.petroloilandgas.com
or
CEOcast, Inc. for Petrol Oil and Gas
Andrew Hellman, 212-732-4300 x 225
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