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OMDA Oil and Gas, Inc.
Reports on Finalization of Panola County Lease Acquisition
Tuesday November 23, 4:30 pm ET
HOUSTON---(BUSINESS WIRE)--Nov. 23, 2004--OMDA Oil and Gas,
Inc., (OTC.PK:OMOG),
in conjunction with its Subsidiary, Texas OMDA Drilling &
Operating Inc., an oil and gas production company, through
its chairman, Adam Barnett, today announced the finalization
of the agreement to acquire the Fredericksburg/Goodland Lime
oil & gas prospect mentioned in a press release dated
Sept. 7, 2004. The prospect is made up of 1116 contiguous
acres situated in the Jane Tharp, A-665, Wm. H. Lacy, A-404,
and Bailey Anderson Surveys, A-24, all in Panola County, Texas.
Terms of the final agreement varied slightly for the original
LOI that was announced on that date. The total acreage was
reduced slightly from 1134 to 1116 Acres, but OMOG's undivided
working interest was increased from 70% to 75%. S & H
Resources, Inc., assignor of the leases, will be the operator
and will be "carried" for the remaining 25% interest
through completion on the first three wells of the potential
8 to 10 well prospect, with both parties carrying their respective
costs of subsequent wells past the first three. Estimated
cost through completion of a "horizontal" well on
this prospect is expected to cost between $750,000 and $800,000.
OMDA intends to use primarily third party Joint Venture or
Partnership financing for drilling of the first three wells
to limit the company's risk. The first well will be commenced
upon notice from the operator that all permits have been obtained
and drilling crews are available. OMDA has not been given
a definitive "spud" date as heavy drilling activity
has created a scarcity of drilling crews with extensive horizontal
drilling expertise, but drilling is expected to commence early
in the first calendar quarter of 2005. Further updates as
to the start of drilling will be made when the company is
notified by the operator.
ADVERTISEMENT
As was mentioned in the Sept. 7th release, "From 1970,
51 vertical wells were drilled on the prospect without a dry
hole. But subsequently, the wells were plugged due to production
declines and low prices." OMDA and S&H agree that
utilizing a "horizontal" drilling program using
"new" wells rather than re-completions through existing
wells would best exploit the remaining reserves in the field
. The Company's decision was augmented by studying a petroleum
engineering evaluation from an unrelated independent third
party Petroleum Engineer dated Nov. 11, 2004, who estimates
the remaining oil "in place" on this prospect to
approximate 9 million barrels remaining of an original 9.6
million barrels on the leases, with estimated gross recoverable
reserves of between 2.25 and 3.6 million barrels of oil and
gas equivalents when combining primary natural, pump jack
and secondary production. Additional confirmation as to the
prudence of a horizontal plan with new wells rather than re-entries
was attained by evaluating engineering and production results
of three recent Fredericksburg wells to the Southeast in the
Bridges Field in Shelby County. These very successful wells
came in with initial production rates of 130 barrels/day to
400 barrels/day, with two being re-entries and one a new well.
While too distant to directly correlate to success in our
field, they have shown us the following: 1) The Fredericksburg,
due to vertical fracturing, low permeability and good porosity
is in fact an excellent candidate for horizontal drilling.
And 2) The prudence of drilling new wells over re-entries
are shown by higher sustained production in a shorter period
of time in the "new" well as compared to irregular
production in the two re-entry wells.
Adam Barnett, Chairman, stated, "Needless to say, I
am quite enthusiastic about this deal, the first new major
project initiated since I have taken control of the company,
and certainly the largest project ever undertaken by OMDA..
While, as in any drilling venture, there is no assurance that
the company will be successful in its search for Oil &
Gas, the risk/reward we see should weigh the odds more heavily
in our favor, particularly when the high current prices of
Oil and Gas are factored. Hopefully this will be just the
first of many to come".
This release includes forward-looking statements made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 that involve risks and uncertainties including,
but not limited to, the impact of competitive products, the
ability to meet customer demand, the ability to manage growth,
acquisitions of technology, equipment, or human resources,
the effect of economic and business conditions, and the ability
to attract and retain skilled personnel. The Company is not
obligated to revise or update any forward-looking statements
in order to reflect events or circumstances that may arise
after the date of this release.
About OMDA Oil and Gas, Inc.
OMDA Oil and Gas, Inc and it's wholly owned subsidiary's,
OMDA Oil & Gas Management, Inc and Texas OMDA Drilling
& Operating, Inc are in the business of oil and gas production
and lease acquisition. Currently the Company owns average
participation interests approaching 47%, in 355 producing
and non-producing oil and gas wells in Louisiana and Texas.
Contact:
OMDA Oil and Gas, Inc.
Adam Barnett, 305-609-2345
omoilandgas@aol.com
www.omogoil.com
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