Message #6 From:
NewsBot Date: October 25, 2005 07:42:00 AM
FLWE News Fellows Energy Ltd. To Generate Immediate Production From Well Recompletion Program in the Uintah Basin
BROOMFIELD, Colo.--(BUSINESS WIRE)--Oct. 25, 2005--Fellows Energy Ltd. (OTCBB: FLWE) ("Fellows") announced today that it has entered into a participation agreement with Mountain Oil and Gas, Inc., Creston Resources Ltd, and Homeland Gas and Oil Ltd. (collectively "Creston"), and is completing arrangements with private investors, whereby Fellows will supply operating expertise and program supervision to earn working interests in up to 45 producing oil wells in the Uintah Basin of Utah. Fellows will immediately commence a rework program to re-complete previously completed zones and extend behind pipe reserves in the wells, located primarily in the prolific Altamont-Bluebell Field, which has produced over 350 million barrels of oil equivalent. Creston will retain the current or historical production while Fellows and the private investors will earn a variable percentage of the production increase resulting from the reworking operations. Work is scheduled to begin on the first four wells immediately, maintaining continuous operations until all wells have been brought to full potential.
Under the participation agreement, Fellows will begin reworking wells as necessary to revitalize production across the 9,000 acres that pertain to the wells. Due to the over-pressured, fractured nature of reservoir in the field, as well as the large vertical extent of potential pay zones, many of the wells have formation damage resulting from high drilling mud weights and cementing operations. These conditions have left many zones unable to produce to their potential. Fellows will employ a variety of conventional and innovative proprietary techniques to reduce the effects of formation damage and increase oil and gas recovery.
The Uintah Basin of Utah is currently one of the most active oil and gas producing areas in the onshore United States. The majority of activity in the basin is focused on the Wasatch and Green River formations, which are the primary producing formations in the Altamont-Bluebell Field. Fellows believes that the large areal extent, both horizontal and vertical, of hydrocarbon occurrence in the Uintah Basin makes for a lower risk project than exploration in unproven areas. Fellows expects that the reworking project will provide near-term cash flow to enable continuing work and development of its large, coal bed methane projects in other areas.
Fellows previously entered into activity in the Uintah Basin on its Gordon Creek Project. In addition, 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. A favorable engineering study has been completed by Sproule & Associates verifying the proven, developed producing reserves and undeveloped reserves.
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.
