Fellows Energy Purchases Carbon County Project Wednesday March 15, 9:47 am ET
BROOMFIELD, Colo.--(BUSINESS WIRE)--March 15, 2006--Fellows Energy Ltd. (OTCBB: FLWE - News; "Fellows") announced today that it has closed the acquisition of the Carbon County Project together with its new joint venture partner, MBA Resource Corp. ("MBA") effective March 13, 2006.
ADVERTISEMENT Carbon County comprises 5,953 gross acres (4,879 net acres) with three gas wells currently producing approximately 20 million cubic feet ("Mcf") of natural gas per month as well as five shut in wells, 3 of which are previous producers. Current production is derived from the Ferron sandstone. The Carbon County acquisition also includes an associated gas gathering system and a 6-mile pipeline and compression facility. Gas is marketed into the transmission pipeline operated by Questar Gas Resources, which crosses the project acreage.
George Young, President of Fellows Energy, stated that "the purchase of the Carbon County project represents a rare opportunity to acquire both existing production and the infrastructure necessary to generate immediate cash flow. Much of Carbon County's 6,000 gross acres are immediately adjacent to our 5,000 gross acre Gordon Creek project. Both Carbon County and Gordon Creek are contiguous with Drunkards Wash, the very successful field operated today by Conoco-Phillips. Notably, no wells at Carbon Country have yet been completed in the Ferron coals which have produced natural gas at Drunkards Wash."
Fellows and MBA are completing plans for the initial reworking program and a preliminary budget of $215,000 has been formulated for the first two wells to be reworked, one producing well and one shut-in well.
Sproule & Associates of Denver, Colorado, completed a "Reserve and Economic Evaluation" of the project in October 2005. Sproule reported that production from the three currently producing wells can be significantly enhanced through operating improvements and that the five shut in wells also have potential to be brought into profitable production. Sproule also concluded that the acreage contains potential for up to an additional 20 wells on 160-acre spacing, with total proven, probable and possible reserves of 20 billion cubic feet ("Bcf"). Fellows believes from its own analysis and from the Sproule evaluation that it can increase current production in the three producing wells and initiate profitable production in the five shut-in wells. Fellows also believes that some of the 20 additional well sites can be drilled and produce gas from the Ferron formation (sandstone and coals) in excess of the production rates currently experienced in the existing wells.
About Fellows
Fellows combines a seasoned management team with exploration targets focusing on coal bed methane, shallow gas and oil and gas potential.
Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as probable, possible and potential, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 10-KSB, File No. 0-33321, available from us at 370 Interlocken Boulevard, Suite 400 Broomfield, Colorado 80021. You can also obtain this form from the SEC by calling 1-800-SEC-0330.
Examples of such disclosures would be statements regarding "probable," "possible," or "recoverable" reserves among others.
Management hopes these transactions will bring additional value to the shareholders of Fellows Energy. There is no guarantee that the projects 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 or production 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.
Contact:
Fellows Energy Ltd. George S. Young, 303-926-4415 or Shane Reeves, 303-926-4415
Source: Fellows Energy Ltd.
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