It's alive !!!
EBONY GOLD & GAS INC.
4220 Evergreen Avenue
West Vancouver, British Columbia V7V lHl
Telephone: (604) 922-4236 Fax: (604) 922-2935
E-Mail info@ebonygold.com
Internet Address: ebonygold.com
NEW RELEASE
Trading Symbol: EGG.V
Sunday, April 13, 1997
General Overview and Update
The sun is finally shining again in Tennessee after two months of rain,
storms and flooding! During this interruption the Ebony field crew was
prevented from gaining access to the various oil and gas wells awaiting
repair and hookup.
New Compressor
The compressor station was completely redesigned and simplified during this
hiatus and is now fully automatic, thereby removing the need for constant
supervision. A new caterpillar 210-hp three stage Ariel compressor has
been installed and a separator, dehydration unit and all ancillary
equipment have been replaced and upgraded. The sulpha-treat tower has been
realigned to conform to the new configuration. This upgrade will enable
Ebony to produce gas 24 hours a day, which will dramatically increase gas
revenues.
Leasing and Oil Production
A strategic 1,800 acre lease containing a partially developed Knox oil
field has recently been acquired. With title work and division orders
completed, the first of four oil wells has been placed into production at
eight barrels/day. A second oil well on this lease will be reworked and in
production by April 18, 1997 at an anticipated rate of five barrels/day. A
third well on this lease has never produced but contains 1,500 feet of oil
in the wellbore. This well is scheduled for completion by April 23, 1997.
After numerous scheduling problems the Aaron Poston #1 well has finally
been logged and the installation of 4 1/2" casing has contained the water
flowing into the well bore through a breach in the casing. A mis-aligned
casing problem and constant intrusion of material from the Pencil Cave and
Mud Cave formations exacerbated this difficult completion. As the water
was swabbed off, inordinately high gas pressures emanating from the
Murfreesboro formation blew oil above the derrick of the work-over rig. At
least 30 barrels of oil were discharged into the pit during this operation.
This oil well is expected to be Ebony's largest producer of oil and gas to
date from the Murfreesboro and Sunnybrook formations.
The partially acidized Michael Poston #1 oil and gas well is scheduled to
be re-completed by April 30, 1997 and will be produced for a few weeks and
assessed as to whether any further stimulation is required.
The Ebony #7 oil and gas well developed a water problem in February but
flooding prevented any maintenance until now. It is scheduled to be back
on line and producing by May 2, 1997.
Gas Production
Six of Ebony's gas wells are now producing through the new compressor and
are anticipated to produce at least 3 mmcfg per mo. The Simcox gas well
will be on line by April 25 and Ebony #1 and Ebony #4 will be on line by
May 8 after remedial work is completed.
Gas Line
The north east spur of the gas line (approximately six miles) is scheduled
to be partially replaced and re-opened during the month of May. This will
connect the Mitchell and Mullins lease area to the pipeline and facilitate
the re-working and completion of several oil and gas wells in the vicinity.
Several shut-in gas wells will also be placed on line.
Within three weeks of hiring Keith Wolf, Operations Manager, in January
1997, Keith uncovered the underlying problem that has plagued Ebony's gas
production over the last year. When the pipeline was originally installed,
many drains were omitted, at strategic low spots, along its 50-mile length.
The hilly nature of the terrain caused the line to fill with condensation
that severely restricted the gas flow through the line. Now all drains are
installed and flows have returned to normal.
Seismic Program
A seismic program was commenced on the Mitchell lease last week. It will
be completed with results interpreted by early May at which time a drilling
program is scheduled to begin. These results should provide the
information anticipated from the magnetometer program announced last year.
As soon as the seismic crew completes the Mitchell shoot they will start a
program over a portion of the newly acquired lease.
Drilling Company Purchase
The completion of the purchase of Poston & Poston Drilling Co. (excluding
the company shell) announced in a news release dated February 7, 1997 has
been delayed to the end of April and some terms have been renegotiated.
The cash payment of US$350,000 remains the same but the shares to be issued
have been reduced to 200,000. Ed Poston is now in charge of the Drilling
Division of Ebony and subject to regulatory approval, has been granted an
employee option to purchase 100,000 shares of Ebony at $0.70 per share
during the next five years. The purchase agreement is still subject to
regulatory approval and finalization of financing details.
With the management team now in place in Tennessee, the directors are
confident that the ambitious program outlined in this news release will be
achieved on time and within budget allocations.
EBONY GOLD & GAS INC.
James M. Blair
Chairman & C.E.O.
THE VANCOUVER STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OF THIS NEWS RELEASE. |
