Digital Gas, Inc.(fka DIGGQ)

[Buckey]

2005-12-09 20:37 ET - News Release



NEW YORK -- (Business Wire) -- Dec. 9, 2005

Digital Gas, Inc. (OTC Pink Sheets:DIGG) announced today
that it has signed an agreement to partner with a private US-based
company (PRIVATCO) that owns the exclusive rights to a high
temperature fuel cell (HTFC) method which is expected to dramatically
reduce the cost for oil and gas recovery from a variety of
unconventional hydrocarbon resources.
¶ The broadly-patented HTFC approach is designed to make it possible
to economically produce oil and gas from unconventional resources,
such as oil shale, tar sands, heavy oil deposits, and coal bed
methane, while producing electricity as a byproduct. Under the terms
of the agreement, Digital Gas intends to make an equity investment in
PRIVATCO, be responsible for drilling contract and funding matters on
PRIVATCO-controlled properties, and will have the right to use the
HTFC method on properties it acquires independent of PRIVATCO, subject
to a royalty payment. Digital Gas expects initial HTFC units to be
operational during 2006.
¶ PRIVATCO is currently accumulating mineral interests in the vast
oil shale reserves within the Green River Formation of Colorado, Utah
and Wyoming. Their proprietary HTFC technology will subsequently be
deployed to produce oil, other hydrocarbon products and electricity
for sale into North American energy markets. PRIVATCO has already
informed Digital Gas that on just one property of less than 2,000
acres that it owns the mineral rights to, 800 million to 1.1 billion
barrels of oil are expected to be recoverable.
¶ The environmental benefits of this breakthrough HTFC method are
compelling when compared to other retorting, strip mining, energy and
water consuming techniques for unconventional oil recovery. By
producing oil and other hydrocarbons from a resource "in-situ",
without significant air emissions or water usage, while simultaneously
producing "green" electricity, this HTFC technology will be well
received by those who seek to balance the growing demand for energy
with environmentally friendly processes.
¶ The contrast between the HTFC and previous geothermic approaches
to unconventional oil production is clear: the Net Energy Ratio (NER),
measuring the energy output in comparison to energy supplied, of the
HTFC approach is superior to other approaches being pursued for
unconventional oil recovery. For example, the estimated NER of the
HTFCs for oil shale production is approximately 7 (i.e., 7 units of
energy are produced for every unit used), whereas the in-situ
production approach currently being investigated by Shell in the
Piceance Creek Basin shale resource is claimed to have an NER of 3.7.
¶ A leading national research laboratory of the U.S. Department of
Energy has reviewed and endorsed PRIVATCO's HTFC approach, and is
following through on its interest by working to form a partnership
with PRIVATCO to develop the commercial versions of the HTFC
technology. In addition, PRIVATCO is currently involved in detailed
discussions with several major energy industry sector companies
interested in using this advanced technology for enhanced oil recovery
for oil shale, oil sands, coal formations, as well as depleted oil
fields.
¶ According to PRIVATCO, their HTFC technology will not only be
developed to liberate oil from shale, a resource estimated to contain
two trillion oil-equivalent barrels in the US alone (equal to about
eighty years of world oil supply at current annual consumption rates),
but can also be developed to allow the major oil-producing companies
to take a second look at properties now considered to be
non-commercial. Depleted oil fields in the US and elsewhere still
contain more than half of the hydrocarbons originally in these fields,
because the residual hydrocarbons are too viscous to extract with
conventional technology.
¶ The HTFC technology can also be developed for application to
accelerate and enhance recovery of coal bed methane, which has
suddenly experienced a spurt in interest and production volume because
of historically high natural gas prices. Digital Gas expects the HTFC
system to dramatically accelerate production for coal bed methane
companies. Since the HTFC produces electricity without any air
emissions, their deployment will create the equivalent of emission
free power plants. The electricity produced by the HTFC wells can be
used to power pumps used in pumping water out of coal bed methane
fields as well as powering compressors required to feed coal bed
methane into feeder pipelines. The fuel cells produce a very pure
carbon dioxide exhaust gas stream that can be either sequestered
underground or harnessed for industrial or agricultural applications,
such as the farming centers to be commercialized by a Digital Gas
subsidiary.
¶ With respect to the Canadian oil & gas market, which Digital Gas
intends to enter, the HTFC system will allow for the commercialization
of oil sands and oil shale formations that have too much overburden
for open pit operations.
¶ Anyone seeking additional information on PRIVATCO and this
breakthrough HTFC technology may submit written requests to Digital
Gas through email at [e-mail].
¶ Persons, companies or banking institutions with shale, tar sand or
coal bed methane properties should also contact [e-mail].
Contacts:

Digital Gas, Inc.
Brian Smith, 732-927-4073
[e-mail]
Source: Digital Gas, Inc.