Hemi Energy Group Announces Collins Hemi 1 Well Results
July 31 2008 - 9:51AM
Business Wire
Hemi Energy Group, Inc. (Pink Sheets: HMGP) is pleased to announce
exceptional results from the drilling and completion of the Collins
Hemi 1 well. President and CEO Keith A. Anderson is quoted as
saying, "During drilling of this well I felt this was going to be
an exceptionally strong well as the drill cutting were bleeding oil
from the samples." Mr. Anderson continued, "The open hole log suite
confirmed a Squirrel payzone that we are producing is about 13 feet
thick and with top 10 feet clean sands with excellent porosity and
good resistivity showing through that interval with oil saturations
of 55% or greater. This was the main reason we waited so long until
the weather and ground conditions cleared so that we would not have
accessibility issues with this well, which is comparable to many
Texas type oil and gas wells. The well is currently flowing natural
gas, gas condensate and oil and is not being pumped yet. At one
point we were venting significant volume of natural gas,
potentially valued over $ 5,000 per day in management's opinion. In
addition to the multiple payzones referred to in previous press
releases, we also have discovered a yet-to-be-named 12-feet-thick
payzone at approximately 600 feet deep in this well, which also
contained exceptional saturations of oil. The oil well on the
Collins lease has 4 to 5 times the pounds per square inch (PSI) of
an average shallow oil well in southeast Kansas that generally has
less than 500 PSI borehole pressure. We have 100% working interest
and 80% net revenue interest in the Collins lease that is not
considered a mature field and has had no prior oil production." The
Company has confirmed results that very important natural gas
dissolved in water solution drive is present in this well.
Therefore longer production and a slower decline curve will be much
better than wells that were drilled on our mature leases that have
lost most of this drive. This well will have a much longer lasting
production at a higher rate because of this presence of this drive
per the experience of service experts in Kansas. The current well
results indicate we have found one of the strongest areas in this
developing trend. With the natural gas cap in place, excessively
strong reservoir pressure and very good oil shows in the formation.
Due to the results of the Hemi Collins 1 well and quality of the
formation, the Company will focus on the leases it has in the
immediate area, crews are now staking new drill sites and intend to
drill in the area of the Collins lease as we have leases on both
sides of the creek. The new Weseloh well is producing oil but needs
additional completion techniques to be performed before the Company
can determine its best rate of production. An oil bbl count per day
is not available yet because the exceptionally strong Hemi Collins
1 well requires more completion techniques and specialty equipment
which is not normally required for shallow oil wells in Kansas.
Even with the needed delays and additional cost, Hemi still has
more than sufficient funds on hand to complete these new wells and
all the supplies and equipment necessary for oil production from
these wells. Craig L. Trieber, chief operating officer, for
environmental and safety reasons, ordered new equipment necessary
for this type of well. This new oil well on the Collins lease
validates what the company has thought all along about the Cherry
Creek and East Owl Creek oil trends. Hemi's very artificially low
market cap is substantially below book value and even below
tangible asset values based on conservative oil and gas industry
standards, especially when ongoing due diligence on lease values in
2 states and also North Dakota's leases are factored in. Hemi has
been cash flow positive for all of 2008 and continues to be cash
flow positive and meeting all normal operating expenses from oil
production. In addition to its budgeted funds, Hemi is also tanking
extra oil for several months more than is necessary for normal
operations. Hemi Energy Group is an independent crude oil and
natural gas producer employing a unique business model capitalizing
on technological advances to exploit mature fields with millions of
barrels of proven oil remaining in the ground. Using attractive
lease/royalty packages Hemi has secured, in its history tens of
thousands of acres of productive domestic projects. "Safe Harbor"
Statement under the Private Securities Litigation Reform Act of
1995 Statements in this press release relating to plans,
strategies, economic performance and trends, projections of results
of specific activities or investments, and other statements that
are not descriptions of historical facts may be forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
information is inherently subject to risks and uncertainties, and
actual results could differ materially from those currently
anticipated due to a number of factors, which include, but are not
limited to, risk factors inherent in doing business.
Forward-looking statements may be identified by terms such as
"may," "will," "should," "could," "expects," "plans," "intends,"
"anticipates," "believes," "estimates," "predicts," "forecasts,"
"potential," or "continue," or similar terms or the negative of
these terms. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
The Company has no obligation to update these forward-looking
statements. For additional information please go to
http://hemienergy.com.
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