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Natural Gas Systems, Inc. Announces Development Drilling Success

Posted on: Wednesday, 28 December 2005, 09:00 CST

HOUSTON, Dec. 28 /PRNewswire-FirstCall/ -- Natural Gas Systems, Inc. (BULLETIN BOARD: NGSY) ("NGS" or the "Company") today announced that it has successfully drilled during 2005 the first four wells in its seven well development drilling program in the Delhi Field in Louisiana. Three of the wells have been completed to date and the fourth is currently being completed, all in reservoirs between 3,000' and 3,300' in depth. The Company expects to complete the first phase of development drilling in early 2006.

The combined current gross productive rate of the first three wells is approximately 170 barrels of oil and 200 thousand cubic feet of natural gas per day (136 barrels and 160 thousand cubic feet of gas net to the Company's interest). At current oil and gas prices, the new production is expected to increase the Company's net revenues by $280,000 per month, or $3.3 million on an annualized basis, more than doubling the $181,000 monthly average revenues reported for the three months ended September 30, 2005. At these rates, the wells will pay out their capital cost in a little more than two months.

Robert Herlin, President of NGS, reported, "This incremental production reflects only the first three of the drilling locations identified from our 2005 study of a quarter of the 13,626 acre Delhi Field. The production results to date exceed the expectations reflected in our proved reserves report, and we are continuing our geological work to identify additional drilling locations. We believe that our development activities to date are just beginning to tap the potential oil and gas resources remaining in our Delhi Field."

As to specific results, the Delhi Unit 87-3 was completed as a flowing oil well in the Upper Barrier Sand within the Delhi Holt Bryant Unit at an estimated sustained rate of 112 barrels of oil and 40 thousand cubic feet of gas per day on a 10/64" choke. The Delhi Unit 92-2 was completed in the gas cap transition zone of a Lane Sand reservoir at an initial production rate of 500,000 cubic feet of gas per day; however, geologic mapping of the reservoir suggests that the well will transition to oil production. The Delhi Unit 70-4 was completed as a pumping well in the Murphy Sand reservoir at an approximate initial rate of 60 barrels of oil and 20 thousand cubic feet of gas. The fourth well drilled, the Delhi Unit 225-2, is being completed in a substantial Holt Sand reservoir that appears by downhole logs to be water-free and oil productive.

NGS (http://www.natgas.us/ ) acquires and develops oil and gas resources and applies conventional and specialized technology to accelerate production and develop incremental reserves. NGS owns 100% of the working interest in the 13,636 acre Delhi Field in northeastern Louisiana that has produced over 200 million barrels of oil since its discovery in 1945, according to the Company's independent engineers. NGS also owns a 100% working interest in, and is actively renovating and redeveloping, portions of the Tullos Urania and nearby fields in north central Louisiana. Additionally, the Company is developing two projects in central Texas.

Safe Harbor Statement

All statements contained in this press release regarding potential results and future plans and objectives of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update or review any forward-looking statement, whether as a result of new information, future events, or otherwise. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, those factors that are disclosed under the heading "Risk Factors" and elsewhere in our documents filed from time to time with the United States Securities and Exchange Commission and other regulatory authorities. Statements regarding our ability to successfully apply technology applications in the re- development of oil and gas fields, future production volumes, success in our drilling and development activity, prices, future revenues and income and cash flows and other statements that are not historical facts contain predictions, estimates and other forward-looking statements. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved and these statements will prove to be accurate. Important factors could cause actual results to differ materially from those included in the forward-looking statements.

For additional information contact: Investor Contact: John Liviakis, Liviakis Financial Communications, Inc. (415) 389-4670 NGS Contact: Sterling McDonald, Chief Financial Officer (713) 935-0122

Natural Gas Systems, Inc.

CONTACT: investors, John Liviakis of Liviakis Financial Communications,Inc., +1-415-389-4670, for Natural Gas Systems, Inc.; or Sterling McDonald,Chief Financial Officer of Natural Gas Systems, Inc., +1-713-935-0122

Web site: http://www.natgas.us/

Source: PRNewswire-FirstCall

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