Fellows Energy Sets Closing of March 9 for Purchase of the Carbon County Project
Wednesday March 1, 9:59 am ET
BROOMFIELD, Colo.--(BUSINESS WIRE)--March 1, 2006--Fellows Energy Ltd. (OTCBB: FLWE - News; "Fellows") announced today that it has set the date of March 9, 2006 with the seller to close the purchase of the Carbon County project, which includes three producing gas wells, currently producing a total of 25 - 30 million cubic feet of natural gas per month. The project also consists of five shut-in wells, together with an associated gas gathering system and 6 mile pipeline and a gas gathering company and associated system located in Central Utah. Fellows is completing a comprehensive title due diligence and other pre-closing diligence review matters and closing documentation for the purchase of the 5,953-acre project. Gas is marketed into the adjacent pipeline operated by Questar Gas Resources. The acquisition price and terms have been held confidential pending closing.
ADVERTISEMENT
Production is derived from the Ferron Sandstone formation, a source of substantial production in the adjacent Drunkard's Wash field operated by Conoco/Phillips. The Drunkards Wash field was originally developed by River Gas Corporation. Fellows' Vice President of Operations, Steven Prince, previously served as Operations Manager on the Drunkard's Wash project for River Gas Corporation during much of the period in which that field was developed, and was involved in the drilling, completion, and production operations for over 200 wells in that field.
A favorable reservoir engineering study has been completed by Sproule & Associates of Denver, Colorado. Sproule reported that production from the existing three producing wells can likely be significantly enhanced through operating improvements and that the five shut in wells also have potential to be brought into production. Sproule also concluded that the acreage contains potential for an additional 20 producing wells on 160-acre spacing, and total proven, probable and possible reserves of 20 billion cubic feet.
Fellows believes from its analysis that it can significantly increase current production in the three producing wells and initiate profitable production in the five shut-in wells. Fellows also believes that the 20 additional well sites can be drilled and produce gas from the Ferron formation in excess of the production rates currently experienced in the existing wells.
AI
