DENVER, Oct. 10, 2006 (PRIMEZONE) -- Mammoth Energy Group Inc. (Pink Sheets:MMTH) announced today that its wholly owned subsidiary, KMV Consulting, has been appointed as operator on a five well drilling program just west of its project in Rogers County, Oklahoma.
The drilling program is a partnership between Allied Energy Group, Inc. (Pink Sheets:AGGI) and Mandalay Energy Resources. They are drilling for natural gas that is found in a blanket Excello shale/coal bed methane seam that covers this area of Rogers County. The first well is commencing today and KMV anticipates that the first three wells will be drilled within two weeks. Pipeline access runs parallel to the lease, which means it should only take about 30 days to get any completed wells on-line and producing gas.
As operator in this 5 well drilling program, KMV has a 15% net revenue interest. Historically, wells that have been drilled contiguous to the planned drilling locations have produced oil and natural gas. Companies in the area, including two large independent, publicly traded oil and gas companies, have drilled over 300 wells with completion rates exceeding 98%.
Recently, KMV continued its 100% success rate to date by completing three more wells on its project that lies east and slightly north from this location. One of the recently completed wells had oil shows and is being tested for commercially viable amounts of oil along with the gas. Once these three wells are on-line, KMV will have a total of 15 producing gas wells with production averaging just under 700,000 cubic feet per day, which at current market prices is about $3,600 per day before line charges, royalties, taxes and operating expenses.
"This area is excellent for low risk drilling and steady accumulation of production," said Christopher Miller, Mammoth's Chief Executive Officer. "We are excited to participate in this venture with Allied and believe that being selected as operator shows that the market has confidence in our plan of operations in this area. I think this area will provide a foundation for growth in cash flow for both of our companies and I look forward to working with Allied."
About KMV Consulting, Inc.
KMV, as a wholly owned subsidiary of Mammoth Energy Group, Inc., is focused on developing shallow gas projects in northeastern Oklahoma due to the low risk, blanket characteristics in the area that make it possible to drill and produce a well nearly every time. It is currently focused on developing its Rogers County, OK project into a property with between 5,000 and 8,000 total net acres leased, where it can embark on a drilling program aimed at getting 150 to 200 wells on-line. With rigs readily available and shallow wells that can be drilled quickly, this project is positioned to grow consistently each month as new wells are brought on-line.
More information is available at the company's website at www.mammothenergygroup.com.
About Allied Energy Group, Inc.
Allied Energy Group, Inc. is an independent energy development firm primarily engaged in the exploration, development, and production of oil and natural gas in the continental United States. The company employs geologists, petroleum engineers, seismic specialists, and financial analysts whose combined industry experience is essential to the success of each project. Allied Energy Group's strategic focus is the development of oil and natural gas reserves. As the fuel of choice to meet the growing demand for a clean-burning domestically produced fuel, the company firmly believes its natural gas exploration strategy should provide substantial growth to the company for the years to come.
More information is available at the company's website at www.alliedenergy.com.
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