Petrol Oil and Gas, Inc. (OTCBB:POIG) announced today that gas production from the Burlington area of its Coal Creek project began flowing into the Enbridge Interstate pipeline on April 4, 2006. The entire Coal Creek Project includes roughly 92,000 gross acres located in SE Kansas and is divided into three areas; Burlington, Waverly and Lebo. The Burlington area is the first of these new areas to begin production and includes:
-- About 15,000 gross mineral acres in SW Coffey County, Kansas.
-- 24 initial production wells with coal bed methane (CBM) and other natural gas
production
-- 5-6 miles of gas gathering lines and gas processing infrastructure
-- 2 salt water disposal (SWD) wells
-- Enough acreage for a 100 well development plan based on 160 acre well spacing.
"Everyone at Petrol was elated last week when we ceremoniously inaugurated gas production from our Coal Creek Project with a bit of pomp and circumstance," said Paul Branagan, Petrol's President and CEO. "The Burlington area is the first of our three Coal Creek areas to begin production with the initial 24 production wells showing gas production of approximately 300 Mcfd. This initial production rate is very encouraging given the CBM dewatering process has only just begun. Furthermore, our field operations team has been working extraordinary hours to insure that our Waverly area will be ready for production by early May."
During the first week of November 2005, Petrol closed escrow on the first $10,000,000 tranche of a $50,000,000 debt facility from Laurus Master Funds, Ltd. and promptly began developing the 15,000 gross acre Burlington area and the 40,000 gross acre Waverly area. Each area is designed to be fully self contained prospects including production wells, SWD wells with gas gathering and gas processing infrastructure.
The Coal Creek development plan is based upon drilling and completing some 540 wells over a two to three year period along with miles of gas gathering pipelines and infrastructure to process, transport and sell gas in mid-west markets. To better manage the development of this large acreage position and take advantage of the three interstate pipelines that cross its leases, Petrol divided the project into three fully self contained areas; Burlington, Waverly and Lebo.
Petrol holds a 100% working interest (WI) and an average 80% Net Revenue Interest (NRI) in Coal Creek's entire 92,000 gross acres covering coal bed methane (CBM) and other oil and gas reserves located in eastern Kansas and western Missouri.
About Petrol Oil and Gas, Inc.
Petrol Oil and Gas, Inc. is an oil and gas exploration and development company currently involved in the development of natural gas from leases encompassing approximately 165,000 gross acres in Kansas and Missouri. Its common stock is traded on the OTC Bulletin Board under the symbol "POIG".
Forward-Looking Statement: The statements in this press release regarding the initial production from the Burlington Area, the actual number of wells in this area, newly drilled wells, amount of gas production being derived from the wells, continued drilling efforts, actual and anticipated market conditions, the actual size of and success of the Coal Creek development program, the ability of Petrol to add to its proven reserves, any implied or perceived benefits from the Company's CBM assets, and any other effects resulting from any of the above are forward-looking statements. Such statements involve risks and uncertainties, including, but not limited to, the continued production of gas at historical rates, availability of funds under the Laurus facility, sufficient additional funding to complete the Coal Creek Project, costs of operations, delays, and any other difficulties related to producing minerals such as oil or gas, Petrol's continued maintenance of its properties, price of oil or gas, marketing and sales of produced minerals, risks and effects of legal and administrative proceedings and governmental regulation, future financial and operational results, competition, general economic conditions, and the ability to manage and continue growth.
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements Petrol makes in this news release include market conditions and those set forth in reports or documents Petrol files from time to time with the SEC. Petrol undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. |
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