NGAS Resources (NGAS)

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Press Release Source: NGAS Resources, Inc.


NGAS Resources Provides Horizontal Drilling Update
Wednesday May 21, 6:55 am ET
-- Production in Line with Expectations
-- 20 Horizontal Wells Planned in 2008


LEXINGTON, Ky.--(BUSINESS WIRE)--NGAS Resources, Inc. (Nasdaq: NGAS - News) today provided an update on the five horizontal wells it has drilled to date in its core Leatherwood field.
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As previously disclosed, natural gas production from the first horizontal well averaged 367 thousand cubic feet per day (Mcf/d) for the first 30 days. The second and third wells have now been on line for over 30 days, with average production rates of 405 Mcf/d and 421 Mcf/d, respectively. The company retained 62.5 percent working interest in the first two wells and 50 percent in the third well.

The Company’s fourth horizontal well in Leatherwood was recently completed and put on line. Its fifth well is being fraced and will go on line in early June. The Company retained all of the working interest in the fourth well and has an 87.5 percent working interest in the fifth well. Each well has a single lateral leg up to 3,500 feet through the lower Huron section of the Devonian shale.

William S. Daugherty, President and CEO of NGAS Resources commented, “Production results from these wells are in line with our expectations. As a result, we plan to drill at least 20 horizontal wells in our Leatherwood field this year.” Mr. Daugherty added, “The success we are having in Leatherwood with our horizontal drilling to the Devonian shale, which is present throughout our Appalachian acreage, has the potential to provide the catalyst for significant growth in our production and reserves over the long term.”