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Fellows Energy Continues Workover Operations on the Carbon County Project

Posted on: Wednesday, 17 May 2006, 12:02 CDT

Fellows Energy Ltd. (OTCBB:FLWE) ("Fellows") provided an update today on its workover operations on the Carbon County project, along with its joint venture partner, MBA Resource Corp. Fellows performed preliminary work in early May on well GCS 1A-18-14-8, including reconfiguration of water disposal, pumping and other operating parameters. Temporary increases of gas production up to a tenfold increase resulted, with continuing increases of three to five times previous production being sustained to date. Under an agreement with Wildcat Energy Services of Blanding, Utah, a workover rig was brought to the site and has successfully completed the first phase of a rework on the well, and Fellows anticipates the workover to be completed on May 18. Additional reconfiguration of the water and gas systems will then be performed by Fellows, after the rig moves to the next well, to test the increased production potential.

The rig will be moved on or about May 18 to conduct a workover on the GCS 1-19-14-8 well, scheduled to be completed on May 21. Fellows will thereafter move a generator set to the site and reconfigure the water and gas systems to begin testing the productive capacity resulting from the workover.

Previous work on a third well performed by Fellows, consisting of preliminary replumbing and reconfiguring of the water and gas systems has increased gas production by 50% to date. As stated in previous announcements, Fellows management hopes that these reworking programs will increase gas production of the field. The reworking programs will be performed in anticipation of the drilling program planned for the undeveloped acreage, which will consist of up to 20 wells on the project acreage.

Fellows and MBA have approved a preliminary budget of $215,000 for the workover program for the first two wells described above.

The Carbon County project comprises 5,953 gross acres (4,879 net acres) with three gas wells currently producing approximately 20 million cubic feet ("mmcf") of natural gas per month as well as five shut-in wells, three of which are previous producers. Current production is derived from the Ferron sandstone. The Carbon County acquisition also includes an associated gas gathering system and a 6-mile pipeline and compression facility. Gas is marketed into the transmission pipeline operated by Questar Gas Resources, which crosses the project acreage.

George Young, President of Fellows Energy, stated: "We are pleased that our preliminary work has shown increased potential for the Carbon County production, and that the workover rig has performed efficiently on our first workover. We hope to establish significant production from the shut-in wells and reestablish production levels previously experienced in the producing wells. Our aim is to establish cash flows from production in both our Carbon County and Creston projects, with a balance between oil and gas."

Sproule & Associates of Denver, Colorado, completed a "Reserve and Economic Evaluation" of the project in October 2005. Sproule reported that production from the three currently producing wells can be significantly enhanced through operating improvements and that the five shut-in wells also have potential to be brought into profitable production. Sproule also concluded that the acreage contains potential for up to an additional 20 wells on 160-acre spacing, with total proven, probable and possible reserves of 20 billion cubic feet ("Bcf"). Fellows believes from its own analysis and from the Sproule evaluation that it can increase current production in the three producing wells and initiate profitable production in the five shut-in wells. Fellows also believes that some of the 20 additional well sites can be drilled and produce gas from the Ferron formation (sandstone and coals) in excess of the production rates currently experienced in the existing wells.

About Fellows

Fellows combines a seasoned management team with exploration targets focusing on coal bed methane, shallow gas and oil and gas potential.

Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as probable, possible and potential, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 10-KSB, File No. 0-33321, available from us at 370 Interlocken Boulevard, Suite 400, Broomfield, Colorado 80021. You can also obtain this form from the SEC by calling 800-SEC-0330.

Examples of such disclosures would be statements regarding "probable,""possible," or "recoverable" reserves, among others.

Management hopes these transactions will bring additional value to the shareholders of Fellows Energy. There is no guarantee that the projects that Fellows has recently acquired will increase the value of its shares of common stock, or that Fellows will acquire rights to explore and operate any other such projects, or that in the event that it acquires rights to explore and operate other such projects, that these actions will be successful or increase the value of Fellows' common stock.

This press release may contain forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. There are many factors that could cause our expectations and beliefs about our plans to acquire additional exploration or production properties, our plans to drill or our drilling results to fail to materialize: competition for new acquisitions; availability of capital; unfavorable geologic conditions; the complexity of coal bed methane exploration and production; and prevailing prices for natural gas and general regional economic conditions. Fellows assumes no obligation to update the information contained in this press release.

Source: Business Wire

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