FOREST HILLS, NY -- (Marketwire) -- 12/21/11 -- Native American Energy Group, Inc. (OTCQB: NAGP) (PINKSHEETS: NAGP), an independent energy resource development and management company, is pleased to provide the following operational update on its recently announced five-well workover program of the Company's lease holdings located in the Williston Basin in northeastern Montana:
Wright 5-35 Well
In early December, NAGP completed the initial workover of the Wright 5-35 well, located on the Company's 160-acre lease in McCone County, Montana. Further, field crews successfully upgraded the electrical systems which power the surface equipment, replaced the pad under the pumpjack and winterized the well site. Following the completion, which included the application of highly advanced multi-lateral jetting technology, the Wright well is now in commercial production and currently generating approximately 24 barrels of 36 degree API Gravity Oil per day. The production on the Wright 5-35 prior to originally being shut-in during 1995 was nine barrels of oil per day (BPOE). Well testing during the completion stage exhibited an oil cut (difference between oil and water) ranging from 25% to 50%. Based on the well test which included swab testing, NAGP believes the production will slowly increase as the well stabilizes.
Beery 2-24 and Beery 22-24 Wells
Both Beery 2-24 and Beery 22-24 are situated on NAGP's 320 acre lease in north McCone County, and located in an oil and gas field originally discovered by Shell Oil in the early 1950s. Beery 22-24 was first drilled and completed in 1953 and is the only original well drilled by Shell that remains in the field today. This well was the second largest producer in the East Richey Field, producing 2300 BPOE during its active production life. Beery 2-24 was originally drilled and completed by Dick Shackelford and Edward Beery in 1980 and initially produced 24 BOPD. The Beery property produced approximately 350,000 barrels of the two million barrels of cumulative oil produced in the entire field.
NAGP is currently engaged in the workover, lateral jetting and winterization of the Beery 2-24 and has recently installed a new heater treater at the tank battery location. Since the jetting of the initial short laterals combined with a proprietary chemical blend, the down-hole pressures have increased significantly and the well has been flowing in excess of five barrels of oil and a significant amount of gas every morning when the well is bled off for daily operations. The swab tests indicate a consistent 50% oil cut from total fluids. Due to these characteristics of the well, NAGP is modifying its completion plan for the well to include lengthening of current laterals and/or the application of an engineered acid treatment specific for this well.
Notwithstanding harsh weather conditions that may inhibit NAGP's ongoing field operations, the workover of the second well, the Beery 22-24, is expected to commence in January.
After jetting the laterals in the Ratcliffe formation, almost immediately, approximately 60 barrels of oil flowed back into the pits on location which indicated that NAGP definitely stimulated the pay zone. Swab testing showed a 30% oil cut from total fluids. The well was brought online for production in November at which time it exhibited strong oil production -- during the initial 18 hours the well was in production, it produced approximately 80 barrels of oil. However, a packer installed to close off a casing leak from a water zone above the oil zone lost integrity and allowed water to migrate into the wellbore which overpowered the pay zone. Consequently, NAGP plans to re-enter the well during the early spring of 2012 and recomplete the well by applying a cement squeeze into the casing to close off the water zone.
The workover of the Cox well was completed in late September and the well was brought online after delivery and installation of a heater treater. During the well workover process, a casing bit scraper was run down-hole on several occasions to clean out the casing as part of the rework process. Although the scraper run was successful, a tight spot was repeatedly encountered at 5820 feet in the Kibby section of the Mississippian which is a known water producer. After the well was completed, with good results in the Mission Canyon section at about 6400 feet, approximately 500 feet below the Kibby section, an increase in water production, not consistent with the well test results, was experienced. After monitoring the water production for three weeks, it was determined that the water was coming from the Kibby zone. At that time, the well was shut-in.
Consequently, NAGP plans to re-enter the well during the early spring of 2012 and recomplete it by implementing a casing patch operation.
Commenting on the Company's field operations, Doyle (Tony) Johnson, Chief Geologist & Petroleum Engineer at NAGP, stated, 'Although we're re-entering mature wells ranging from 30 to 50 years old, the application of new technologies to these wells is reaching out further into these pay zones to access more of the oil in the reservoirs than the original completions in the past. Having been a part of many EOR projects during my 38 year career, I am very impressed with the results we are achieving with the various technologies we are applying on these wells, specifically the multi-lateral jetting technology provided by SEMJET International Limited. This hands-on experience has broadened my prospects for viable EOR candidates for future lease acquisitions of the Company.'
To view videos of the workover operations filmed at the well sites, visit NAGP's video gallery at www.nativeamericanenergy.com/media/video-galleryand its YouTube page at www.youtube.com/nativeamericanenergy.
About Native American Energy Group, Inc.
Native American Energy Group, Inc. is a New York-based, energy resource development and management company with three principal projects: development and management of its oil & gas interests and operations in the Williston Basin, Montana; development of coal-bed methane natural gas ('CBM') in the Cook Inlet Basin in Alaska; and planned implementation of vertical-axis wind turbine power generation technology for the production of clean, cost-efficient green energy throughout the USA, including Alaska and on all U.S. Native American tribal lands. The Company uses its web site as a channel of distribution of material company information. Financial and other material information regarding the Company is routinely posted on and accessible at www.nativeamericanenergy.com or via email NAGP@efcg.net.
This release, as well as media publications and videos accessible on our website and YOUTUBE channel referred to in this release, include 'forward-looking statements' as defined by the Securities and Exchange Commission ('SEC'). These forward-looking statements represent the Company's present expectations or beliefs concerning future events. The Company cautions that such statements are necessarily based on certain assumptions which are subject to risks and uncertainties, including, but not limited to, the timing and extent of changes in commodity prices for oil and gas, drilling, development and operating risks, counterparty risk, competition, environmental risks, litigation uncertainties, the availability of drilling rigs, workover rigs and other support services, legislative and/or judicial decisions and other government or Tribal regulations which could cause actual results to differ materially from those indicated herein. Further information on our business, including the risks inherent therein, is included in our filings with the SEC.
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Elite Financial Communications Group, LLC
President and CEO