Message #9 From:
NewsBot Date: January 30, 2008 07:55:33 AM
American Oil and Gas Provides Drilling and Completion Updates
DENVER, Jan. 14 /PRNewswire-FirstCall/ -- American Oil & Gas, Inc.
(Amex: AEZ) provides the following operational update:
Fetter Project
Hageman 16-34HR well: The Hageman well has recently reached total depth
in the targeted Frontier formation and the drilling rig has been removed from
the well site. Sidetracking operations in the Frontier, undertaken to
maximize the intersection of naturally occurring fracture systems, resulted in
three horizontal laterals totaling over 5,200 cumulative feet of lateral well
bore, all of which was drilled in zone and will be opened up for production.
Completion activities are underway and after completion, the well is expected
to be immediately placed on production.
Wallis 6-23 well: The Wallis well has recently been drilled to a total
depth of 13,000 feet. The drilling rig has been removed from the well site
and completion operations have commenced. The Wallis well is the first
vertical well to be drilled by American and partners in the Fetter project and
is designed to test multiple prospective formations utilizing multi-stage frac
technology. To date, the well has been completed and fracture stimulated in
the Dakota formation, the deepest formation of interest in the well. As
planned, the Dakota has been temporarily isolated below a cast iron bridge
plug allowing completion operations to move up hole. Additional formations,
including the Frontier, are prospective in the well. Upon completion and
preliminary evaluation of these formations, the Dakota and our other zones of
interest will be commingled, tested, and placed on production.
Sims 15-26H well: The 1,165 foot horizontal lateral, drilled into the
targeted Frontier formation has recently been artificially fracture
stimulated, cleaned up and returned to production at rates during the prior 25
producing days ranging from approximately 650 thousand cubic feet of natural
gas equivalent per day to 7.2 million cubic feet of natural gas equivalent per
day. The average production over this time period was approximately 1.7
million cubic feet of natural gas and 82 barrels of oil per day. Rates have
fluctuated as natural gas production from the well has been affected by the
relatively high oil to gas ratios currently being experienced, which is the
subject of ongoing engineering, reservoir and production optimization
analysis. Because of the high BTU content and the favorable high liquid
content of the natural gas that is separate from the oil production
(approximately three gallons per mcf), we received a price at the wellhead for
November natural gas sales of $6.75 per mcf.
The Wallis 6-23, Sims 15-26H and Hageman 16-34HR wells are being funded by
Red Technology Alliance ('RTA') and project managed by Halliburton Energy
Services, Inc. ('Halliburton'). American is being carried through the tanks
in this phase of the drilling program for a 23.125% working interest in each
of the three wells, and currently owns a 92.5% working interest in the
approximate 52,000 net (58,000 gross) acre Fetter acreage position. Upon
completion of this initial drilling program, RTA will earn a 25% working
interest in the undrilled acreage, American will retain a 69.375% working
interest and privately held North Finn LLC will retain the remaining 5.625%
working interest.
West Douglas Project
State Deep 7-16 well: Completion operations are currently underway in the
Mowry formation, the primary objective in the State Deep 7-16 well. Test
results from deeper formations yielded minor quantities of oil and natural
gas, and information obtained from these deeper formations will assist with
future drilling plans in the project area. The State Deep 7-16 well location
was chosen to maximize the potential of the Mowry, however completion and
testing programs are also planned for several prospective formations above the
Mowry in the coming weeks.
Pursuant to the agreement with RTA, 100% of the cost to drill and complete
the State Deep 7-16 well is being funded by RTA. American owns a 45% carried
working interest in this test well and will retain a 45% working interest in
the approximate 47,000 net (55,000 gross) acre West Douglas project area.
Halliburton is project manager.
Pat O'Brien, CEO of American commented, 'We are currently active on a
number of wells in our Douglas and West Douglas project areas and are very
pleased with the progress that is being made. RTA is expending the time,
money and manpower necessary to gain as much geological and reservoir
information as possible from the numerous formations these large acreage
positions hold. This time and money will greatly optimize drilling and
completion procedures in future wells. Of particular significance in the
current program is the production history we are now getting from the Sims
well, and will soon receive from the Hageman and Wallis wells, that will allow
us to compare the economic and reserve recovery potential from a single zone
horizontal well to that of vertical well with multiple formation completions.
We look forward to providing additional updates as more information becomes
available.'
Krejci Project
Krejci Family Trust 32-1H Well: Drilling operations at the Krejci project
have recently recommenced with the Krejci Family Trust 32-1H well following an
extensive evaluation and study of the various drilling and completion methods
used on prior wells. This well is currently at a measured depth of
approximately 7,700 feet. Casing has been run through the turn and drilling
is currently underway in the horizontal lateral section in the targeted Mowry
formation. American owns a 45% working interest in the Krejci Family Trust
32-1H well and in the approximate 127,000 net (132,000 gross) acre Krejci
project.
Goliath Project
Solberg 32-2 Well: In November, 2007, the Solberg 32-2 well tested at a
restricted flow rate of approximately 2.1 million cubic feet of natural gas
and 408 barrels of condensate per day (over 750 barrels of oil equivalent per
day) from one interval within the Red River formation. Additional potentially
productive intervals within the Red River formation could be tested and if
productive, produced at a later date. The Solberg 32-2 well is currently
shut-in and waiting on completion of a nearby natural gas processing plant and
a pipeline that will connect the well, both of which are expected to be
completed and operational before the end of the first calendar quarter of
2008.
American and other joint interest owners in the Goliath project have
recently completed a 10.5 square mile 3-D seismic program in the area around
the Solberg 32-2 well and are currently processing and interpreting the data.
Information obtained from this seismic program will assist in the selection of
additional Red River offset locations to the Solberg 32-2 well, and may
identify additional Red River targets in this trend.
The Solberg 32-2 well is located within American's approximate 89,000
gross acre Goliath project in Williams County, North Dakota. American owns a
non-operated 11.9% working interest (a net revenue interest of approximately
9.5%) in the Solberg 32-2 well. American's working interest in future wells
will vary, and could be as high as 50%.
American Oil & Gas, Inc. is an independent oil and natural gas company
engaged in exploration, development and production of hydrocarbon reserves
primarily in the Rocky Mountain region. Additional information about American
Oil & Gas, Inc. can be found at the Company's website:
http://www.americanog.com.
This release and the Company's website referenced in this release contain
forward-looking statements regarding American Oil & Gas, Inc.'s future plans
and expected performance that are based on assumptions the Company believes to
be reasonable. A number of risks and uncertainties could cause actual results
to differ materially from these statements, including, without limitation, the
success rate of drilling efforts and the timeliness of development activities,
the Company's dependence on future drilling success, fluctuations in oil and
gas prices, and other risk factors described from time to time in the
Company's reports filed with the SEC. In addition, the Company operates in an
industry sector where securities values are highly volatile and may be
influenced by economic and other factors beyond the Company's control. The
Company undertakes no obligation to publicly update these forward-looking
statements to reflect events or circumstances that occur after the issuance of
this press release or to reflect any change in the Company's expectations with
regard to these forward-looking statements or the occurrence of any
unanticipated events. This press release may include the opinions of American
Oil & Gas, Inc. and does not necessarily include the views of any other person
or entity.
Contact: Andrew Calerich, President Neal Feagans, Investor Relations 303.991.0173 Fax: 303.595.0709 Feagans Consulting, Inc 1050 17th Street, 303.449.1184 Suite 2400 -- Denver, CO 80265
