November 11, 2008
Mammoth Energy Group Announces Results of First Well in Pawnee County, OK
Mammoth Energy Group, Inc. (PINKSHEETS: MMTE) announced the results today from the first well in its 8 well project located near the Arkansas River in Pawnee County, Oklahoma. This first well was drilled to a depth of 1688' and had commercially viable amounts of oil in the Layton from 1542' to 1551'. The well was acidized and treated before being completed for production in this interval.
Due to a backlog in availability for work over units, it took several weeks to get the well serviced and completed. Once completed, there was also a delay in getting electricity run to the leasehold with the utility being behind due to sending service capacity to assist with recovery efforts from Hurricane Ike.
While waiting for electric to be run to the well, the operator installed a gas driven motor that has been running off of the natural gas coming from the Layton in this well. In its first full 24 hours of production, the well produced 26 barrels of oil. In the next 12 hours of production, the well produced 16 barrels of oil before the gas motor went out. When the motor was replaced and the well was turned back on, it was discovered that sand from the frac job had leaked back into the well bore and was inhibiting fluid recovery.
The well was cleaned out and put back on pump at the beginning of the month. It took a couple of days to pump the water out that was used to wash the sand of out of the well. However, the well is now consistently producing between 17 and 22 barrels of oil per day. The operator for the project believes that the well can do even better after a more powerful electric motor is installed, enabling the well to generate a larger stroke and thereby lift more oil out from the well.
"This well is an off-set to a well that had initial production of about 40 barrels of oil per day (BOPD) from this same reservoir (Layton) and is 60 acres away from a well that came in over 200 BOPD," said Joe Overcash, President of Mammoth Energy Corp. "Every one involved in this project feels that it is very possible to reach production rates in the 40-80 BOPD range once the electric is set and a more powerful motor can be installed. Overall, we are very pleased with the results from this first well."
The second, third and fourth wells that were drilled in this project are in production at this time. Mammoth's management expects to have results from these wells very soon.
"Our strategy is to look at projects where we can put a smaller amount of capital at risk to obtain results before committing more to the development of a project," added Overcash. "This project has done just that. We were able to test some shallow formations through our relationship with the operator who allowed us to get our feet wet before jumping in so to speak."
Wells three and four that have been successfully drilled tested deeper formations and management believes that those reservoirs appear to be good zones as well.
"By following this strategy, we believe we have been able to mitigate our risks while discovering what we have in this project," continued Overcash. "We now know that this lease has the potential to generate excellent production levels at depths that require much less capital than what we see in many other projects where a well can cost in the millions of dollars to drill and complete."
About Mammoth Energy Group, Inc.
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 Pawnee County properties in Oklahoma.
More information is available at the company's website at www.mammothenergygroup.net
Cautionary note: This report contains forward-looking statements, particularly those regarding cash flow, capital expenditures and investment plans. Resource estimates, unless specifically noted, are considered speculative. By their nature, forward-looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to US investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.
Contact: M & M Investor Relations Dominic Martinez 866-508-2092 http://www.mandminvestorrelations.com Mail to: [email protected] Mail to: [email protected]
SOURCE: Mammoth Energy Group, Inc.