DENVER, Sept. 28, 2006 (PRIMEZONE) -- Mammoth Energy Group Inc. (Pink Sheets:MMTH) announced today that its wholly owned subsidiary, ProTerra Oil & Gas Exploration, Inc., has secured leases in Montana, Kansas, and Colorado that increase its total net acreage under lease to about 13,000 net acres. Included in this acreage are about nine prospects in Kansas, two of which were successfully drilled and completed in August and September.
A third offsetting well to these two wells is scheduled to be drilled in the next five months. These wells in Kansas target the Arbuckle and Kansas City/Lansing formations. Both formations have historically been favored oil and gas producing formations in Kansas. Arbuckle production is considered the best and primary target in the newly leased areas by ProTerra, owing to thickness of pay and quality of porosity and permeability.
"According to a Kansas Geological Survey conducted by the University of Kansas, producing Arbuckle fields often produce between 80,000 to 240,000 barrels," said Christopher Miller, Mammoth's CEO. "This report shows that Arbuckle wells commonly have initial production of between 75-100 BOPD and settle around 40 BOPD after the first year or two. Based upon our success in these two initial wells, we feel we have an excellent opportunity to increase our production by testing wells in this area that show the same characteristics as these first two."
The remaining wells in Kansas are abandoned wells or small producing wells that ProTerra intends to treat with a polymer gel treatment, which reduces water flow and allows more oil to flow. In an average scenario in polymer treatments, a well producing between 2 to 5 barrels of oil per day (BOPD) is treated. After treatment, the well typically has initial production of between 30 and 50 BOPD before settling down at around 15 to 20 BOPD.
"We are currently working to secure about 10 to 15 wells that we can treat," added Miller. "These are low risk strategies to quickly get production under our belts in a very cost effective manner. We hope to have our first treatment done in late November 2006."
About ProTerra Oil & Gas Exploration, Inc.
ProTerra is concentrating on three low risk strategies that round out steady accumulation of production and growth of monthly cash flow. First, it is developing low risk wells that are in or near existing oil fields where recoverable oil is in smaller amounts but is not as risky or expensive to drill. Secondly, it is working to acquire existing production that is undervalued and where infill drilling can increase reserves dramatically. Lastly, it is currently working on leasing acreage in "hot areas" that are in the path of current industry trends where major activity is occurring.
More information is available at the company's website at www.mammothenergygroup.com.
Cautionary note: This report contains forward looking statements, particularly those regarding cash flow, capital expenditures and investment plans. Resource estimates, unless specifically noted, are considered speculative. By their nature, forward looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to U.S. investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.