Chancellor Group Inc (CHAG)

[husker]

Monday March 26, 9:05 am Eastern Time
Press Release
SOURCE: Chancellor Group Inc.
Chancellor Group Set to Begin Production at Kansas Oil and Gas Field
Company Also Reveals Merger Discussions And Option Negotiations on Texas Oil Field
LOS ANGELES, March 26 /PRNewswire/ -- Chancellor Group, (OTC Bulletin Board: CHAG - news) said it should receive clearance from county authorities today on completed electrical work at its Shinkle Field oil and gas property in Greenwood County, Kansas, and begin production immediately afterward.

Ashraf Khan, company chairman and chief executive officer, said the company also plans to drill more new wells than originally announced and pick up adjacent property in the near future.

The company had earlier said that in full production it expected to produce more than 2,400 barrels of light crude oil a day from more than 10 existing reopened wells and 20 new infill wells as well as more than 10 million cubic feet of natural gas per day.

The company said it expects to reveal tomorrow the final terms of its previously announced $6,000,000 equity financing.

Khan said the company is exploring merger opportunities with two publicly- held companies, one listed on NASDAQ and the other on the American Stock Exchange. He said a more definitive announcement about a potential merger could be made within a week.

The company is also negotiating an option to acquire a 60% interest in a proved producing oil property in King County, Texas. The company would earn its interest on a well-by-well basis at $120,000 a well for up to 63 wells. Drilling and production could begin within 90 days. The property has a production history of some 7,000,000 barrels of light sweet crude oil from shallow depths and potential net recoverable reserves to Chancellor Group's interest of more than 26 million barrels of light, sweet crude oil.

Chancellor Group Inc., currently has 28 million shares of primary common stock issued and outstanding and 36 million shares fully diluted.


Chancellor Group web site: http://www.chancellorgroupinc.com
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