DENVER, Oct. 30, 2006 (PRIMEZONE) -- Mammoth Energy Group Inc. (Pink Sheets:MMTH) announced today that its wholly owned subsidiary, KMV Consulting, has doubled its acreage under lease in its shallow gas project in Rogers County, Oklahoma.
When the property was acquired by KMV Consulting in May 2006, there were 1,075 net acres under lease and 9 producing wells. Over the last three months, KMV Consulting has worked to secure an additional 1,476 acres, putting the total at over 2,551 net acres. This acreage is sufficient to support approximately 80 wells. With the three recently completed wells, the total producing well count is now 15 wells, with several more scheduled to be drilled before year-end.
KMV has a 49.5% net revenue interest in this acreage and intends to lease a target of about 5,000 total acres. This project has tremendous upside since it is located on a shallow, blanket gas field where nearly every well drilled produces as it evidenced by the company's 100% success rate thus far through 15 wells.
KMV's recent joint venture with Allied Energy Group, Inc. (Pink Sheets:AGGI) for $1.5 million has provided the basis for expanding the project. The funding will be sufficient to put between 25 and 30 wells on-line, at which point cash flow can fund the addition of new wells every month.
"The first step in this project after acquiring it was to refurbish existing wells, replace broken and failing equipment, and improve operating efficiencies," said Christopher Miller, Mammoth's Chief Executive Officer. "Before we could start leasing people, the second step was to show that we are proactively developing this area. So, we put 5 new wells on-line. People in this area have been leased by oil and gas companies since the early 1900s, and can be skeptical about a company's intent. Therefore, after accomplishing these two things, our team went to work and in just a couple of months more than doubled the project scope. It's a great start to what we believe will be a steady growth project."
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.
Cautionary Note: Certain statements in this release and the attached corporate profile that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as "anticipate," "believe," "expect," "future," "may," "will," "would," "should," "plan," "projected," "intend," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to the Company's ability to: (i) obtain sufficient capital or a strategic business arrangement to fund its expansion plans; (ii) build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors.