HOUSTON, Jan. 22, 2008 (PRIME NEWSWIRE) -- Index Oil and Gas, Inc. (OTCBB:IXOG) ("Index" or the "Company") today announced an Operations Update, including initial results for the Company's higher impact portfolio.
Nine months into Index's 2008 Fiscal Year (ending March 31, 2008), the Company has completed the drilling phase of six of its seven targeted wells for the Fiscal Year. Of those completed, four have been successful, one is currently testing and one has been suspended. The wells that have completed the drilling phase are as follows:
* Shadyside, the largest prospect to date, has been hooked up and flowing to sales, as announced January 11, 2008. * Cason, a medium impact well, is producing. * Outlar, a high impact well, is producing. * Cow Trap (Ducroz), a low-risk production well, is awaiting hook up. * HNH Gas Unit 1, in the Supple Jack Creek (West 1) prospect, is currently testing. * Ilse is suspended.
As targeted at the start of the Fiscal Year, the Company is also participating in follow-on wells. Cason 2 in the Fern Lake prospect is now being completed and tested. Cason 3 is expected to be drilled shortly. Follow-on wells in other high-impact prospects are also anticipated.
Management believes these successes will have a significant positive impact on the Company's reserves, production and revenue for the final quarter of the 2008 Fiscal Year (as trailing metrics). In addition, toward the end of the first quarter of the 2008 calendar year, Index expects to see the start of drilling operations of Alligator Bayou, a prospect substantially larger than any preceding prospect in the Company's portfolio.
Lyndon West, CEO of Index Oil and Gas, said, "As a policy, Index does not publish internal figures but waits until third-party audited numbers become available. Nonetheless, the data and initial flow rates strongly suggest that we will see the anticipated growth in the Company's performance documented in the trailing metrics.
"Alligator Bayou, of course, will add measurably to the business in a success case. We present the following summary of operations to keep current and potential investors informed of our progress."
More information is provided on the Company website, http://www.indexoil.com, which has been updated today to include an investor presentation.
SUMMARY OF OPERATIONS
Summary of Current Status and Results:
The following is a summary of the status and initial results of the wells in Index's FY 2008 portfolio:
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Prospect Status NRI% Test results Recent
(Approx)* Production
(Approx)***
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Fern Lake Producing 18.36 1.2 mmcfpd 0.55 mmcfpd
(Cason 1) (13.77)%
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Shadyside** Producing 21.15 3.0 mmcfpd & 1.6mmcfpd &
(19.04)% 200 bcpd 134 bcpd
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West Wharton Producing 8.20 1.6 mmcfpd & 3.2mmcfpd &
(Outlar) (7.03)% 75 bcpd 190 bcpd
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Cow Trap Awaiting 5.25% 4.0 mmcfpd****
(Ducroz) hook up
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Supple Completing 14.45 Pending
Jack and (14.02)%
Creek awaiting
(HNH Gas testing
Unit 1)
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New Taiton Suspended 7.30 Wilcox C
(Ilse) (6.00)% non productive.
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* NRI = net revenue interest - figures shown in brackets are After
Pay Out (APO)
** Shadyside equity increased post drilling and pre-completion
*** Recent production is indicative and does vary
**** Initial production anticipated to be lower
The status of additional wells is as follows:
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Prospect Status NRI% (Approx) Comments
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Cason 2 Completing 18.36 (13.77)% Ongoing
and testing
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Cason 3 Awaiting 18.36 (13.77)% Expected mid Jan
spud
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Alligator Awaiting 3.5% Expected end Q1 08
Bayou Spud
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Index also announced on November 5, 2007 that drilling operations are continuing in Kansas, where the Company announced a 14-well program on October 11, 2007. To date, Index has participated in six wells, of which three are now on production and three have been plugged and abandoned. Further activity is anticipated. Index has, depending on well location, between 2.64% and 4.15% NRI (approx).
The Company also provided updated information on wells drilled in Fiscal Year 2007, as follows:
--------------------------------------------------------------------- Well Status June 11 NRI (Approx) Current Status --------------------------------------------------------------------- Schroeder Awaiting Hook up 28.13% Producing --------------------------------------------------------------------- Hawkins Awaiting Hook up 10.01% Producing --------------------------------------------------------------------- Vieman Re-Completing 14.56% Re-Completing ---------------------------------------------------------------------
Reserves:
A new reserves audit will be undertaken at the end of the 2008 Fiscal Year (March 31, 2008). Based on current results, management anticipates that proven reserves at the end of the 2008 Fiscal Year will show a significant increase from the 2007 Fiscal Year.
Follow-on drilling opportunities:
In addition to building on reserves, production and revenue, the 2008 Fiscal Year portfolio was designed to provide the Company with follow-on drilling opportunities within existing projects. The following is a summary of the current view of those opportunities:
Fern Lake (Cason) After drilling, completing and hooking up the Cason 1 well, the Company has participated in Cason 2 and will participate in Cason 3. Following this well, a review will be undertaken of results and costs to date, prior to participating in any further leasing or drilling in the area. Shadyside The Company is considering the potential of both deeper and shallower prospects on current leases. West Wharton (Outlar) The Company anticipates additional wells (potentially up to 4) on current leases and is participating in additional leasing opportunities with the operator. Cow Trap (Ducroz) Index does not anticipate additional drilling opportunities on the current leases. Supple Jack Creek (HNH Gas Unit No. 1) Subject to the results of the current testing program, Index will evaluate additional drilling, particularly in a success case test. The gas unit designated for the well covers 566.59 acres. However, the contract Area of Mutual Interest (AMI) for the overall prospect extends over a much larger area, of which approximately 5,000 gross and net acres are currently under lease. Ilse This well is currently suspended as previously reported and further drilling activity is not anticipated.
Operational Cash Flow:
The higher impact wells drilled in the 2008 Fiscal Year have only recently been hooked up to sales, with additional hook ups planned and anticipated. Consistent with this, production for the quarter ended December 31, 2007 shows a modest increase from previous quarters. Significant revenue increases in cashflow are anticipated for the fourth quarter of the 2008 Fiscal Year, benefiting cashflow from operations. Subject to operational conditions, the Company continues to anticipate becoming cashflow positive at the end of the 2008 Fiscal Year on a go forward basis.
About Index Oil and Gas
Index Oil and Gas, Inc. (OTCBB:IXOG) is a dynamic gas-biased oil and gas exploration and production Company, with onshore activities primarily in Texas, Louisiana, and Kansas and offices in Houston. The Company's goal is to generate increasing reserves and cash flow from a portfolio of moderate and higher risk potential prospects. After successfully focusing on lower risk prospects to build reserves and near term cashflow in Fiscal Year 2007 (ended March 31, 2007), Index has embarked upon a drilling program in Fiscal Year 2008 of a balanced, risk-managed portfolio of prospects designed to generate significantly higher reserves and production. The Company has an enviable drilling record and intends to grow its existing asset base and revenues through further investment in the U.S.
To learn more about Index Oil and Gas, (OTCBB:IXOG) please visit the Company's Web site at www.indexoil.com. To sign up to receive news about the company as it becomes available, please contact Adam Brooks at abrooks@cfsg1.com or at 1-800-625-2236.
The statements in the press release that relate to the Company's expectations with regard to the future impact on the Company's results from acquisitions or actions in development are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements in this document may also contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. Since the information may contain statements that involve risk and uncertainties and are subject to change at any time, the Company's actual results may differ materially from expected results. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements.
Pursuant to a September 1, 2007 agreement, Consulting For Strategic Growth 1, Ltd. ("CFSG1") provides the Company with consulting, business advisory, investor relations, public relations and corporate development service, for which CFSG1 receives cash and/or stock compensation.