Initial Flow Rates and Pressures from the Exploratory Well Reveals Encouraging Results for Natural Gas and Helium Reserves Inside the Hugoton Gas Field in Haskell and Finney Counties, Kansas Covered by our Participation Agreement.
Lenexa, KS, Aug. 17, 2022 (GLOBE NEWSWIRE) -- American Noble Gas, Inc. (OTC-QB: IFNY) (“AMGAS” or the “Company”) today announced that helium and natural gas sales have begun from its initial exploratory well relative to AMGAS’s participation in its previously announced farm-out agreement (the “Hugoton Farm-out Venture”) to develop oil and gas and brine interests in the Hugoton Gas Field in Haskell and Finney Counties Kansas. The initial well was successfully connected to the gathering system, on August 11, 2022, which marked the beginning of the flow of natural gas and helium for commercial sales. The success of our initial well under our exploration program may indicate the discovery of remaining reserves within the Hugoton Gas Field, which could reinvigorate the Hugoton Gas Field, the largest conventional onshore natural gas and helium field in North America.
The initial well in which AMGAS has acquired a 40% participation together with three other venture partners is producing from a single zone and, as previously disclosed, may indicate the existence of remaining gas resources not fully understood before. The initial flow rate ranged from 150 - 185 Mcfpd with initial shut-in pressure of 85 PSIA. This initial production flow and pressure data is very encouraging especially when compared to other wells in the area. For perspective, nearby wells typically have shut-in pressure of less than 15 PSIA. The initial well is flowing at pressures of approximately 8 times the flowing pressure of offset wells.
AMGAS is working with its Hugoton Farm-out Venture partners to analyze the information obtained from the successful initial exploratory well drilling and completion to determine the timing and location of the drilling of its next exploratory well.
The Farmout Agreement covers drilling and completion of up to 50 wells, including the first exploratory well drilled and completed in August 2022. The Hugoton JV utilizes existing infrastructure assets, including water disposal, existing brine stream, gas gathering and helium processing, as part of the Farmout Agreement. The Farmout Agreement provides the JV with rights to take in-kind, and market its share of helium. Hugoton JV will be able to market and sell the helium produced, at prevailing market prices, by taking its helium in-kind.
AMGAS will apprise shareholders of the Hugoton Venture’s plans relative to the timing and location for the drilling of the next exploratory well. We will also continue to provide investors with appropriate production rates and the natural gas and helium percentages relative to the first exploratory well.
Management commentary:
Stanton E. Ross, Chairman and Chief Executive Officer of AMGAS remarked that “the Hugoton Farm-out Venture of which we are a 40% participant, exploratory drilling program has started off very well with the drilling and completion of its initial well. The initial flow rates and pressures indicate that the theories that became the foundation for much of our business plan are beginning to be proven out. The Hugoton Gas Field has previously been considered a depleted conventional gas field but our initial exploratory well results may serve to reinvigorate the entire Hugoton Gas Field. The Hugoton Farm-Out Venture sees the logic of its unconventional theories and the potential impact it may have, in particular the helium reserves that the field may still contain.”. Added Ross: "The Hugoton Farm-Out Venture has the contractual rights to explore and develop natural gas, helium and other noble gases as well as brine minerals contained inside the Hugoton Gas Field in Haskell and Finney Counties, Kansas. Concluded Ross: “This Hugoton Gas Feld project on top of our GMDOC Investment and Central Kansas Uplift play that are developing conventional oil and gas production are very exciting. Management will continue to keep our stockholders apprised of these important developments throughout our portfolio of plays.”
About the Hugoton Gas Field:
The Hugoton Gas Field is a prolific natural gas and helium gas field located in the States of Kansas, Oklahoma, and Texas. Its name is derived from the town of Hugoton Kansas near which the Hugoton Field was first discovered. Natural gas in the Hugoton gas field was first discovered in 1919 near Liberal, Kansas at a depth of 2,919 feet below surface but was shut-in for three years because it did not find oil. In 1922 the well was completed as a gas well, but there was little demand for natural gas in the area and it was years before another gas well was drilled in the field.
In 1927, gas was discovered at about 2,600 feet below the surface southwest of Hugoton, Kansas which is now considered the center of the Hugoton Field. By the end of 1928, five wells had been drilled in the field and the first pipeline was transporting gas to local markets.
In 2007, the Hugoton gas area produced 358 billion cubic feet of gas, making it the 5th largest source of natural gas in the United States. The Hugoton currently (2022) ranks second in cumulative natural gas production and eighth in estimated total reserves globally.
The natural gas in the Hugoton field of Kansas and Oklahoma, plus the Panhandle Field of Texas, contains unusually high concentrations of helium, from 0.3% to 1.9%. Because of the large-size of these fields, it is recognized to contain the largest reserves of helium in the United States. Helium is separated out as a byproduct from natural gas, from the Hugoton field, the Panhandle field in Texas, the Greenwood field in Kansas, and the Keyes field in Oklahoma.
About American Noble Gas, Inc.:
AMGAS has recently that it has acquired a 60.7143% in GMDOC, LLC which acquired certain oil and gas leases covering approximately 10,000 acres located in Southern Kansas near the Oklahoma border. The GMDOC Leases currently produce approximately 100 barrels of oil per day and 1,200,000 cubic feet of natural gas per day on a gross basis. During 2021 AMGAS acquired current oil & gas production and the mineral rights to approximately 11,000 acres in the Otis/Albert Field located on the Kansas Central Uplift. Prior to the recent acquisitions, AMGAS had been involved in oil and gas exploration, development and production of natural gas and oil in Texas and the Rocky Mountain region of the United States as well as an oil field service company located in Eastern Kansas, Northern Oklahoma, Colorado and Wyoming prior to December 2012. AMGAS was founded in 1987, is headquartered in Lenexa, Kansas and its common stock is listed on the OTC-QB under the symbol "IFNY". The Company's financial statements and additional information are available on the Internet at www.otcmarkets.com.
Forward-Looking Statement:
This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe", "estimate", "project", "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Forward-looking statements in this press release include the following: whether the Company will be successful in exploring for noble gases including developing commercially efficient production of its noble gas reserves, developing the oil & gas reserves of the Oil & Gas Properties; whether the TORP Agreement will provide the desired beneficial engineering and development data to increase production of oil & gas from the Oil & Gas Properties, whether the Company will be successful in workover/stimulation activities of existing producing oil & gas wells that result in increased production of the Properties; whether the Company will be able to execute its exploration and development plans for the Properties, including obtaining the required financing; whether the required financing for the exploration & development of the Properties can be obtained on terms favorable to the Company and its shareholders; the quantity of hydrocarbons beneath the Properties and whether they can be economically extracted; the accuracy of the consultants' preliminary analysis and estimate of the recoverable oil & gas reserves (including noble gas reserves) on the Properties and their underlying assumptions; whether or to what extent the relevant geological zone contains hydrocarbons and/or noble gas; the inability to predict, in advance of drilling and testing, whether any particular prospect will yield oil in sufficient quantities to recover drilling and/or completion costs or to be economically viable; the fact that the process of estimating the quantity of oil in a prospect is complex, requiring the interpretation of available technical data and many assumptions; the potential for significant inaccuracies in such interpretations and assumptions that could materially affect the Company's estimates or those of its consultants; the necessity for estimates to be based upon available geological, geophysical and engineering data that can vary in quality and reliability; the inherent lack of precision in estimates involving the quantity of oil and noble gases in the development project in Kansas as a result of the foregoing; whether the Company will be successful in exploring for the existence of mineral reserves other than oil & gas in commercial quantities including the development of the underlying reserves of such reserves and its ability to find a qualified partner, if necessary, with whom to pursue its exploration and development program on terms and conditions acceptable to the Company; the Company's ability to extract oil and gas from the Properties and the costs and technical and other challenges of extracting oil from the Properties; variations in the prices of oil and gas, unexpected negative geological variances, governmental uncertainties in Kansas; operating risks, delays and problems, the availability of services on acceptable terms, the results of drilling and completions; changes United States regulation respecting oil and gas; and actions by creditors with respect to debt or other financial obligations of the Company; and its ability to resolve its liquidity and capital requirements. Additional information respecting factors that could materially affect the Company and its operations are contained in its annual report on Form 10-K for the year ended December 31, 2021 and its Form 10-Q for the three and six months ended June 30, 2022 as filed with the Securities and Exchange Commission.
For Additional Information, Please Contact:
Stanton E. Ross, CEO, at 816-955-0532
