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NGAS and Seminole to Build Appalachian Processing Plant and New Albany Shale Treatment Facility

Posted on: Tuesday, 9 October 2007, 12:00 CDT

NGAS Resources, Inc. (Nasdaq:NGAS) and Seminole Gas Company, LLC, have announced plans for the joint construction and co-ownership of a natural gas processing plant near Rogersville, Tenn., and a separate natural gas treatment facility in northern Christian County, Ky.

The Rogersville processing plant will be located near an interconnection with the East Tennessee Natural Gas, LLC (ETN) interstate pipeline system. The plant will extract natural gas liquids from gas production serviced by the NGAS gathering system.

"This plant will significantly enhance our company's ongoing development and growth plans in southern Appalachia, while also increasing supply options and reliability to ETN shippers and customers," commented William S. Daugherty, President and CEO of NGAS Resources. "We look forward to the relationship with Seminole and to leveraging their expertise in processing and treating facilities."

On-site construction of the Rogersville plant is expected to start in the next few weeks upon receipt of necessary permits, with a scheduled completion date near year-end. Designed for scalable capacity, the plant can initially process up to 25,000 Mcf per day, which can be increased to accommodate forecasted production growth and relief of constrained regional supplies. When completed, the plant will be operated and managed by Seminole Energy Services, LLC and co-owned by NGAS' operating subsidiary, Daugherty Petroleum, Inc.

"We are excited to have the opportunity to work with NGAS on this project," remarked Robert B. Rosene, Jr., President of Seminole Energy Services, the parent of Seminole Gas Company. "It is Seminole's goal to become a leading provider of midstream services in the Appalachian Basin, as well as to extend our retail and wholesale natural gas marketing services to customers in the Mid-Atlantic and Northeast. The Rogersville processing plant is an important step for us in executing that strategy."

In addition to the Rogersville processing plant, NGAS and Seminole Gas Company will soon begin construction of a natural gas treatment facility to service the New Albany shale development project being conducted by NGAS in northern Christian County, Ky. The facility will include a nitrogen reduction unit and will be co-owned by subsidiaries of NGAS and Seminole. The treatment facility is also planned for completion near year-end.

About Seminole Gas Company

Privately held, Tulsa-based Seminole Gas Company provides midstream services in Oklahoma, Kansas and Texas. Seminole Energy Services (www.seminoleenergy.com) and its subsidiary, Seminole Gas Company, provides "wellhead-to-burnertip" natural gas midstream and marketing services to end users and producers throughout the central United States. In Illinois and Michigan, Seminole operates under its affiliate brands, Vanguard Energy Services and Lakeshore Energy Services, respectively. Seminole's customer base today numbers over 50,000 customers with average daily sales of 600,000 Mcf.

About NGAS Resources

NGAS Resources is an independent exploration and production company focused on unconventional natural gas basins in the United States that support repeatable drilling opportunities, principally in the southern portion of the Appalachian basin. Additional information about NGAS, including its periodic reports filed with the United States Securities and Exchange Commission, can be accessed on its website at www.ngas.com.

Forward-Looking Statement

This release includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act relating to anticipated operating performance and prospects. Actual performance and prospects may differ materially from anticipated results due to regulatory conditions and other risks, uncertainties and circumstances partly or totally outside the control of NGAS and Seminole.

Source: Business Wire

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