Message #5 From:
NewsBot Date: October 18, 2005 03:50:00 AM
FLWE News Fellows Energy Ltd. Provides Corporate Update; Carbon County Project Acquisition Nears Completion; Acquisition to Increase Production Substantially
BROOMFIELD, Colo.--(BUSINESS WIRE)--Oct. 18, 2005--Fellows Energy Ltd. (OTCBB: FLWE) ("Fellows") announced today the following update on its exploration and acquisition activities.
Carbon County Project
As announced on September 12, 2005, Fellows is in the process of acquiring a gas field in Carbon County, Utah currently producing approximately 30 million cubic feet of natural gas per month. The field comprises 5,953 gross acres (4,879 net acres) with three gas wells currently producing and has an additional six wells drilled that are presently shut-in. Production is derived from the Ferron Sandstone formation, and 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 is completing technical and legal due diligence, and anticipates closing the acquisition by the end of October. A favorable engineering study has been completed by Sproule & Associates verifying the proven, developed producing reserves and undeveloped reserves.
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.
Overthrust Project
Fellows has progressed in the geologic evaluation of many of the potentially productive coal seams, and has delineated a number of areas for further work. Previous drilling activities have also identified a reservoir quality sand which Fellows believes has significant potential for conventional gas production if present in a favorable structural position. Fellows will now review seismic data covering the area to evaluate the conventional gas potential simultaneously with its ongoing activities to pursue the coal bed methane potential of the project. After evaluating the seismic data and further evaluation of the logs from previous drilling, Fellows will design and implement the next drilling phase to target both conventional and coal bed methane gas.
Kirby and Castle Rock Projects
Operations continue on the dewatering and discharge of water from the first 16 wells drilled on the Kirby project. The construction of the pipeline to service the project is nearing completion. The water treatment plant is completed and under operation. Fellows believes that production is imminent from the first 16 wells, while drilling of the next 48 wells on Kirby is underway, and the drilling of the first 48 wells on Castle Rock is pending permitting.
Bacaroo Project
Leasing and seismic evaluation activities continue. One entire target area is now under lease, and two additional areas are now undergoing leasing. Fellows will perform additional geologic evaluation and permitting work in preparation for drilling in early 2006.
Carter Creek Project
Work continues to identify additional areas for leasing and drillsite delineation. Fellows will continue its evaluation and preparation for drilling the fractured shales. It is likely that horizontal drilling methods will be identified as an effective technique to tap into the potential of this field.
Platte Project
Fellows has commenced geochemical and biochemical analyses of various structures in the Platte project in preparation for target delineation.
Other Projects
Fellows continues with its work and evaluation of the Gordon Creek and Weston County projects with its joint venture partner, JMG Exploration, Inc. Fellows also has begun the detailed evaluation of the Badger project, and has a number of additional targets for acquisition, including targets currently in production.
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.
