DALLAS, April 21, 2003 (PRIMEZONE) -- Powder River Basin Gas Corp. (OTCBB:PRVB) has entered into agreements to purchase up to 8,000 acres owned or controlled by ammonite energy of Midland, Texas.
Included in the acreage position are multiple beneficial leases. These leases are state, federal and fee ownerships, as well as three farm out agreements from separate entities that are all in Converse County, Wyoming. On the property to date, Ammonite has drilled (but not yet completed) eight coal bed methane wells along with one state-monitoring well. At present the wells are drilled on 80-acre spacing, although according to Ammonite records, they have permits to drill on 40-acre spacing. The wells will be completed by Powder River Basin Gas Corp. after the closing occurs. The coal seam is called "The School Coal" in which this particular coal is below surface between 350 to 500 feet deep. All wells will need to be dewatered before going on line.
One benefit of the contract is that Ammonite has done a majority of the work to drill up this acreage. There have been up to 125 well permits for the acreage with some active permits and some that have expired. All "water surveys" and preliminary work for all regulatory agencies have been filed and approved.
"This is an enormous boost to Powder River; it is almost impossible to find acreage in this position to go out and drill over 100 wells. This could be a 'company maker,' being that the average well will produce between 75-100 mcf of gas per day. With today's prices and the net revenue interests that Powder River Basin Gas Corp. (OTCBB:PRVB) will own in the leases, it could be a huge cash generator," stated Powder River Basin Gas Corp. CEO Greg Smith.
"After the first 20 wells are drilled and hooked up to the pipeline, the company can drill the rest of the wells out of cash flow. The other key factor is the Thunder Creek Pipeline that runs through the center of this acreage. Although Powder River Basin has not yet spoken to Thundercreek to date, Powder River does feel that there should be no obstacles to hooking up to the Thunder Creek Pipeline. At this time, PRVB is negotiating with two separate operators to partner up on this play. It is such a large position that it would be difficult for us to take the whole thing, but with that said, being such prime acreage we don't feel it will be a problem finding the right partner to develop this lease."
About Powder River Basin Gas Corp.
Powder River Basin Gas Corp. is an exploration, development and production company historically engaged in the evaluation and development of coal-bed methane ("CBM") reserves as well as shallow oil reserves within the Powder River Basin in Wyoming. The Company's current focus is to find undervalued proven properties in the Rocky Mountains, New Mexico and West Texas with long life reserves and price stability.
This press release may contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those, described herein. Although the Company believes that the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct.