HOUSTON, Oct. 24, 2006 (PRIMEZONE) -- Northamerican Energy Group Corporation (Pink Sheets:NNYG) announced today that it has executed an exclusive option with Penergy, of Midland, Texas, to purchase the leases on 1,920 acres encompassing the South Leonard (Queen/Penrose) and Rhodes (Yates/Seven Rivers) Fields in Lea County, New Mexico.
These leases have 30 existing wells originally drilled by Tenneco into shallow (under 3000') reservoirs, with just one of the existing wells currently operating out of the Yates formation; however many of the remaining 29 wells that were temporarily shut in can easily be reworked, at nominal cost, to bring them back on line with anticipated production of 5-10 Blpd of oil, and 50-100 Mcfd of natural gas.
The 3-D Seismic, and geological surveys, of both these leases, and in adjacent leases east, and northeast of these leases show good promise and potential in the Devonian (9200') and EllenBurger (11,700') zones, as verified by initial natural gas potential of 1555 Mcfpd, 1668 Mcfpd and 4249 Mcfpd in the offsetting wells, as shown in the production reports of the east coast petroleum producer that drilled them.
"Northamerican Energy is, and will plan on, holding discussions with major drilling, and oil and gas firms, to assist Northamerican's efforts to properly capitalize upon the opportunity these leases provide, as Northamerican continues its quest to expand Northamerican's base of operations," stated Jon Ginder, Northamerican Energy's Chairman and CEO.
Northamerican Energy Group, Corporation has developed a proven growth strategy of identification, acquisition, and development of domestic hydrocarbon reserves. The Company concentrates on acquiring prospects, which largely are, and have, proven oil and gas production, which have been operating for many, many years. By acquiring working interests in proven low-risk fields the Company minimizes the risk by not "wildcatting or drilling dry-holes," and incurring any expense of building major infrastructure to get the product to market. Finally, the Company's low-cost operations and low overhead structure allows the Company to maximize the income and revenue from each production lease.
Safe Harbor Provisions
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties including, but not limited to, the impact of competitive products, the ability to meet customer demand, the ability to manage growth, acquisitions of technology, equipment, or human resources, the effect of economic and business conditions, and the ability to attract and retain skilled personnel. The Company is not obligated to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.