Message #4 From:
NewsBot Date: September 12, 2005 01:53:00 AM
FLWE News Fellows Energy Ltd. to Purchase Producing Gas Field in Utah; Current Production is 30 Million Cubic Feet of Natural Gas per Month
BROOMFIELD, Colo.--(BUSINESS WIRE)--Sept. 12, 2005--Fellows Energy Ltd. (OTCBB:FLWE) ("Fellows") announced today that it has entered into an agreement to purchase a producing gas field in Carbon County, Utah. The field comprises 5,953 gross acres (4,879 net acres) with three gas wells currently producing approximately 30 million cubic feet of natural gas per month. Production is derived from the Ferron Sandstone formation. The gas is marketed into the adjacent gas pipeline operated by Questar Gas Resources. The field has potential for 20 additional well sites on 160 acre spacing on the undeveloped acreage. The property is adjacent to Fellows' Gordon Creek project and to the very successful Drunkards Wash field originally developed by River Gas Corp.
Fellows will use the experience of its personnel who participated in the development of Drunkards Wash to increase current production and expand production in both the Ferron Sandstone and in the underlying coal bed methane seams that are not currently being exploited by the existing wells. The coal seams include some of the same seams that have been prolific in the Drunkards Wash field. Fellows will immediately undertake to increase production in the existing wells, complete those wells in the coal for their coal bed methane potential, and thereafter drill additional wells on the acreage being acquired.
Terms of the purchase agreement have been held confidential pending closing, scheduled for on or before November 1, 2005. Engineering and reserve studies are currently underway.
"The purchase represents an excellent strategic opportunity in a proven area and will provide immediate production and cash flow," said Fellows President George Young. "We believe we can increase current production and achieve production on the surrounding acreage to generate additional cash flow for the Company. This new project will compliment the interests in over 500,000 acres of exploration projects we already have, and will help propel us forward with our business plans."
The announcement follows recent arrangements to option the Platte and Badger projects, two new shallow gas projects developed by Thomasson Partner Associates, Inc. of Denver, Colorado. Those projects result from years of study and analysis by the professional geologists at Thomasson. Other recent announcements include the restructuring of a joint venture with JMG Exploration, Inc. on the Weston County and Gordon Creek projects and the acquisition of an interest in the Kirby and Castle Rock projects in the Powder River Basin.
About Fellows
Fellows combines a seasoned management team with exploration targets focusing on coal bed methane, shallow gas and low-risk oil and gas potential.
Fellows has interests in over 500,000 acres of oil, gas and coal bed methane rights, including interests in the Weston County and Carter Creek projects in Wyoming, the Gordon Creek and Overthrust projects in Utah, the Kirby and Castle Rock Projects in Montana, and the Bacaroo project in Colorado.
Fellows recently completed its option under an Exploration Services Funding Agreement with Thomasson Partner Associates, Inc. of Denver, Colorado under which it will continue with project evaluation and acquisitions. Fellows has the first right to projects generated by Thomasson for up to a 100% basis on projects selected. Projects recently acquired by Fellows include the Bacaroo, Gordon Creek, Weston County, Platte, Badger and Carter Creek.
The agreement calls for TPA to present to Fellows an average of eight (8) projects per year with an area of interest of 10,000 to 80,000 acres per project with a reasonable potential of at least two hundred (200) billion cubic feet of natural gas reserves (200 BCF) or twenty (20) million barrels of oil reserves (20 MMBO).
As new projects are acquired, Fellows will add diversity to the interests previously optioned.
Management hopes these transactions will bring additional value to the shareholders of Fellows Energy. There is no guarantee that the agreement with TPA or the leases that Fellows has recently acquired will increase the value of its shares of common stock, or that Fellows will acquire rights to explore and operate any other such projects, or that in the event that it acquires rights to explore and operate other such projects, that these actions will be successful or increase the value of Fellows' common stock.
This press release may contain forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. There are many factors that could cause our expectations and beliefs about our plans to acquire additional exploration properties, our plans to drill or our drilling results to fail to materialize: competition for new acquisitions; availability of capital; unfavorable geologic conditions; the complexity of coal bed methane exploration and production; and prevailing prices for natural gas and general regional economic conditions. Fellows assumes no obligation to update the information contained in this press release.
