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PEMC Announces Farmout Agreement With Questar Exploration
| Source: Pacific Energy & Mining Company
RENO, NV--(Marketwire - July 15, 2008) - Pacific Energy & Mining Co. (PINKSHEETS : PEMC )
announces its farmout agreement with Questar Exploration and Production
Company , a subsidiary of Questar Corp. traded on the New York Stock
Exchange (Questar). Pursuant to the terms of the agreement, Questar will
initially re-enter its well located in Section 22 to define the reservoir.
Based upon the results of the test well, Questar has the option to drill a
new well with a horizontal component of approximately 2,500 feet in section
21, Township 7S, Range 21E, Uintah County, Utah. The well is to test the
H4a zone of the Greenriver formation at Brennan Bottoms Oil Field. This
acreage is a lease that Pacific has a 7% working interest.
The acreage of the Farmout Agreement will be incorporated into an
approximately 8,000-acre Exploration Unit which will be operated by
Questar. The details of the operating Unit will be finalized after the
reservoir is defined by the test wells and existing well data. To date,
Questar has successfully re-entered and drilled horizontally in its
existing wells at the Brennan Bottoms Unit. Well production rates have
ranged from 120 to 200 bbls of oil per day with minimal water production.
Based upon the results, Pacific Energy will also evaluate the drilling of
horizontal wells to develop the H4A zone in its acreage in the northern
portion of Brennan Bottoms Field, which will not be included in the Unit.
This acreage consists of approximately 1,800 acres.
Well costs are estimated at approximately $2.2 million dollars for a
horizontal well. The formation depth is approximately 6,800 feet.
Pacific Energy estimates that approximately 8 wells will be required to
develop the field.
Pacific Energy is still in negotiations with suitors for the sale of the
company or certain assets including an oil and gas company that is listed
on a major international stock exchange.
About Pacific Energy & Mining:
Pacific Energy is a diversified company that operates oil and gas leases
throughout Utah. It also has non-operated interests in Utah and Oklahoma
and owns a 7% working interest in Brennan Bottoms. The Company is in the
process of unitizing the field with offset leaseholders, the largest of
which is Questar Company. Additionally the Company owns a 16.67% interest
in Mar/Reg Investments, a General Partnership, through which it holds
working interest in oil wells in Altamont Bluebell Oil Field in Utah.
The Company would also like to welcome all shareholders to visit our
website at www.pemc.us for detailed information.
Disclaimer
The foregoing contains forward-looking information within the meaning of
The Private Securities Litigation Act of 1995. Such forward-looking
statements involve certain risks and uncertainties. The actual results may
differ materially from such forward-looking statements. The company does
not undertake to publicly update or revise its forward-looking statements
even if experience or further changes make it clear that any projected
results (expressed or implied) will not be realized.