WINSTON-SALEM, NC, Jun 18, 2008 (MARKET WIRE via COMTEX) -- Mammoth Energy
Group, Inc. (PINKSHEETS: MMTE) -- Mammoth Energy announced today that its
consultant, American Continental Energy, LLC ("ACE"), has contracted Mandalay
Energy Resources, LLC ("Mandalay") to operate its 3 well drilling project in
Noble County, OK. Mandalay has permitted the three locations in Section 30 of
Township 24 North, Range 1 West. Mammoth's lease assignment will be recorded
this week in the land records of Noble County.
Mandalay operates several fields in Oklahoma and agreed to operate this project
for American Continental Energy. Mandalay has secured a slot on a regional
drilling company's drilling schedule. Unfortunately, the recent inclement
weather in the Midwest has created some delays and has pushed back the drilling
to the end of June 2008. However, Mandalay expects to commence drilling within a
couple of weeks barring no further delays from weather. "There has been record
rainfall in NE Oklahoma this spring and early summer and we are hoping for a
break to get our drilling program started," stated Joe Overcash, CEO. We have
paid the driller, who has bought the drill pipe for the initial project and
continue to look forward to getting these first wells drilled.
"On the other side of Highway 35, Range Exploration out of Oklahoma City has had
tremendous success in this area," said Joe Overcash, CEO. "Based in part upon
Range's success as well as historical data, Mandalay and ACE believe that there
is tremendous potential from deeper zones on this lease. So, our first goal will
be to drill the shallower zones where it is cost effect to drill, complete wells
and quickly get wells into production. Once that is done, we plan to then go
back and test for deeper pay zones."
Wells have been drilled in this area of Kay and Noble Counties since the 1920s.
On this lease and on surrounding acreage, the majority of historically producing
wells were drilled from the 1950s to the early 1980s. One well on Mammoth's
lease was drilled to the Skinner at about 4,100 and had initial production of
1,250,000 cubic feet of gas per day (1,250 MCFD). Contiguous to this, a well was
drilled to the Mississippi at ~4,300' and had initial production of 33 barrels
of oil per day (BOPD) and 725 MCFD.
Based on projections done by the former operator of the property, we estimate
that the three wells combined could generate over $525,000 within 36 months
based on gas production alone. We would hope to double or triple that number if
we find oil along with the gas.
Mammoth Energy Group, Inc.
