LOL. What's going on, futr? From the BIGN board, my friend! As for what's going on with this company, this PR from November sums it up beautifully (except now the reserves are over 10B, up from the 7+B in this PR):
Fellows Successfully Completes Workover Operations at the Carbon County Project
Proven Reserves Estimated Over 7BCF
Fellows Energy Ltd. (OTCBB: FLWE) ("Fellows"), an oil and gas company focused on exploration and production of natural gas and oil in the Rocky Mountain Region, announced today that the Company, along with its 50% joint venture partner Thunderbird Resource Corp, has successfully completed a substantial portion of the second phase of its workover operations on its Carbon County project. Fellows' preliminary work on the GCS 1A-18-14-8 and the GCS 1-19-14-8 wells, which began in early May and continued through early July, doubled production from approximately 20 million cubic feet per month at the time of the acquisition in March to 40 million cubic feet per month beginning in July. With this second phase of workovers now nearly completed, it is estimated that field production could increase in excess of 60 million cubic feet per month.
As a result of the success of the workovers and the consistency of the production achieved since Fellows assumed operations in March 2006, preliminary reserve report estimates by the independent engineering firm of MHA & Associates have assigned a total of 7.46 billion cubic feet of gas to proven reserve categories. Proven reserves are made up of PDP (proven developed producing), PDNP (proven developed non-producing) and PUD (proven undeveloped) categories. This represents more than a 250% increase over the reserves in the proven category at the time of the acquisition of the project in March 2006. Proven reserves plus probable and possible reserves are estimated to be in excess of 20 billion cubic feet.
The second phase of the workovers consisted primarily of making permanent the modifications and work on the rods, pump and tubing previously performed on the GCS 1-19-14-8 well, as well as treatment of the upper water zones to block water entry, lowering bridge plugs to allow production from the lower gas zones, and lowering pumps to enable more effective water removal in three of the existing producing wells. The water shutoff treatment and other work on the GCS 1-19-14-8 well were successful, and water production from the well has been slowed considerably. Gas production from the well has increased to five times previous levels, and the recently-completed work has maintained those levels. Fellows has operated the wells consistently, with the exception of occasional mechanical difficulties relating to the inadequate equipment sizing and engineering design of the wells as originally installed by the previous operator, demonstrating their reliability and capacity at the higher production level, and elevating the reserves to the proven category, as stated above.
A portion of the second phase of the workovers remains to be completed, namely the removal of the bridge plug in the GCS 1-19-14-8 well, and the addition of supplemental water treatment facilities to increase productivity through water reduction. Following the completion of the workovers, Fellows plans to mobilize the recently sourced drilling rig previously working on the Drunkards Wash project to drill and complete two new wells now being permitted on project acreage for a total of six producing wells. Although Fellows submitted all required information to the regulatory agencies necessary to obtain final permit approval for the next two wells, regulatory delays in processing the permits were incurred when the Utah Department of Wildlife Resources made a last-minute request to relocate access corridors to help protect habitat. This delay has necessitated postponing the drilling of the new wells until Spring 2007. Production from the new wells is expected to add an additional 60 million cubic feet per month to production, for a total field production at that time of 120 million. Up to an additional 18 new well sites on 160-acre spacing will be evaluated for later drilling following the completion of the two planned wells.
The Carbon County project comprises 5,953 gross acres (4,879 net to Fellows and joint venture partners) with production derived from the Ferron sandstone, the same formation from which the adjoining Drunkards Wash field operated by Conoco/Phillips derives its production. The project also includes an associated gas gathering system and a six mile pipeline and compression facility. Gas is marketed into the transmission pipeline operated by Questar Gas Resources, which crosses the project acreage.
Sproule & Associates of Denver, Colorado (some of whose personnel are now are associated with MHA) completed a "Reserve and Economic Evaluation" of the project in October 2005. Sproule reported that production from the four currently producing wells could be significantly enhanced through operating improvements and that the four shut-in wells could also have potential to be brought into profitable production, similar to those at the adjacent Drunkards Wash field. MHA also concluded that the acreage contains potential for up to an additional 20 wells on 160-acre spacing. Fellows owns rights to adjacent acreage, covering in excess of an additional 5,000 acres, which it believes will also have similar potential.
"We are pleased to have such a substantial increase in proven reserves as a result of our consistent operations," said George Young, President of Fellows Energy. "Although we are disappointed with the permit delays for the new wells, the valuation that comes with the increased level of proven reserves will help us in our capital formation to restructure our balance sheet. With ongoing consistency in our operations over the winter and new drilling in the spring, we expect to increase cash flow and prove up the $65 million valuation determined in the MHA report."
About Fellows Energy Ltd.
Fellows an early stage oil and gas company led by an experienced management team focused on exploration and production of natural gas and oil in the Rocky Mountain Region using traditional and new technologies. For additional information please go to www.fellowsenergy.com.
Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission ("SEC") 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.
This press release may contain forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. There are many factors that could cause our expectations and beliefs about our plans to acquire additional exploration or production properties, our plans to drill or our drilling results to fail to materialize: competition for new acquisitions; availability of capital; unfavorable geologic conditions; the complexity of coal bed methane exploration and production; and prevailing prices for natural gas and general regional economic conditions. Fellows assumes no obligation to update the information contained in this press release.
Source: Market Wire (November 21, 2006 - 11:22 AM EST)
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