HOUSTON, Aug. 26, 2005 (PRIMEZONE) -- OMDA Oil and Gas, Inc. (Pink Sheets:OMOG), an oil and gas production company, through its Chairman, Adam Barnett, presents the latest drilling and prospect update to shareholders and potential shareholders. Additionally, the company announces the full implementation of its shareholder awareness program. This program includes quarterly letters from the Chairman, drilling project updates, legal updates with filings and other information regarding the multi-million-dollar lawsuit against prior management, as well as a weekly newsletter keeping shareholders and others current on all important matters. These weekly newsletters include timely information regarding shareholder questions, drilling updates, and stock information. Every issue also publishes the total outstanding shares of the company stock and the name and phone number of the transfer agent. The Company encourages all shareholders and prospective shareholders to visit the company website to view the archives of all past letters, issues and filings. The Company also encourages all interested parties to subscribe to the company's e-mail alerts at http://www.omogoil.com .
Adam Barnett, Chairman of OMDA Oil & Gas, stated, "With oil now reaching record highs of over $67 a barrel, natural gas exceeding $10 per thousand cubic foot, and competition for prime drilling acreage at record levels, I believe that OMDA Oil and Gas is in an excellent position to fully capitalize on the situation. To give a clear report on the state of the company, I offer the following updates."
Drilling Update and Prospects
OMDA is extremely confident, as can be seen by documentation on the legal link of the company's website, that it will prevail in its litigation against the company's former officers and directors. A successful legal battle could add in excess of 350 primarily stripper type wells and as much as $36 million in damages. We have already begun to reap rewards from these legal pursuits as exemplified by our recovery of the Concord Dome Project. Even without these legal proceedings, OMDA's past financing and investment activities has positioned the company ahead of many other emerging exploration and production entities. Many of these other companies do not have the funding or resources that we currently possess even though they may have higher market caps.
One of the major challenges facing emerging producers today is the need to acquire a diversified portfolio of prime drilling prospects even though the cost of these prospects continues to skyrocket. While other small independent oil companies are focused on small projects with single well participation, OMDA currently owns and/or participates in the following:
1) A Joint Venture with Young Oil (YJV), the largest producer in Tennessee. Over the past few weeks, the YJV appears to have discovered three multi-zone natural gas wells. These wells have been drilled, logged and temporarily shut in while awaiting an acidizing and testing crew early next week. Flow results will be reported at that time. A gas pipeline for these wells was completed last week and upon successful completion, sales will begin immediately. OMDA has a fully paid 20% interest in these three wells, and has a right of first refusal to participate in all future wells in Young's 46,000-acre lease inventory.
2) Patroon Prospect, Shelby County TX. OMDA has a paid up 15% turnkey interest in this 800-acre Joint Venture with Texas Land & Production Company (TLP). This exciting lower risk 6,000 ft wildcat well is an offset to a 1946 Humble Oil wildcat that was tested in two Mooringsport zones. The lower zone at 5272'-5290' tested at 1,758 mcf/d and 135 barrels of oil per day. Since the nearest gas line was a hundred miles away at that time, this zone was never produced. The next Mooringsport up the hole at 5,164'-5192' tested at 1,204 mcf/d and 109 bopd and was completed and produced for approximately 18 months, totaling around 15,000 barrels of oil while flaring the gas. The well was subsequently abandoned due to the very low price of oil and lack of gas value in 1950. TLP acquired this acreage in 1999 when the price of oil was around $20 bbl and gas prices were around $2.00 mcf. Drilling at that time was almost non-existent in this now hot area. Should the well be successful, an additional 8-9 wells could be drilled on the existing acreage. TLP has informed us that they are negotiating for an acreage swap to double the size of this lease to 1,600 acres. A Third party Petroleum Reservoir Engineering report by TEC estimates recoverable gas reserves per 80 ac. unit of 1.226 Billion Cubic Feet, and oil of 36,000 barrels. If these estimates prove correct, Future Net Revenues could approach $20 million to the 8/8 ths, per 80 acres. These estimates are based on current oil and gas prices.
The drilling permits on this lease have been pulled and site preparation is now complete. The site was recently approved by the drilling contractor: Fran Drilling, Inc. While spudding of this well was originally intended to be several months ago, high demand for rigs and contractors has caused frustrating delays throughout the industry. We have been assured by the contractor that we are next in the queue after his current drilling project. We expect to see this well spudded in the next few weeks. It will then take two additional weeks to drill and test.
3) Concord Dome. Andersen County TX. This 12-well re-completion play was earned by OMDA as a partial settlement of the above mentioned lawsuit. Depending on the outcome of this lawsuit, OMDA will own a fully carried (paid) interest between a minimum of 7.5% and a maximum of 37.5%. To date, over $1.2 million has been spent by the settling partners. The managing partner has reported to OMDA that he estimates that 1.1 million barrels of recoverable oil is still in place. Also, this settlement gives OMDA a right of first refusal to participate, up to 37.5%, in all new offset locations in addition to the original 12 wells. This right is guaranteed regardless of the outcome of our legal proceedings. Within the next week to ten days, the managing partner will be releasing a full update and anticipated production schedule.
4) Panola Fredericksburg Lease, Panola Count, TX. OMDA currently owns a 100% paying interest and a 75% working interest in this exciting 1,113-acre horizontal Fredericksburg play. This was OMDA's first lease acquisition, which was acquired when oil was at half its current price. Due to the high cost ($8 to $10 million) to develop this play, we have been patiently waiting as its value mounts. Based on outside interest in this play, it is likely that OMDA will farm out this project and retain a carried interest.
Adam Barnett stated, "I want to apologize for the length of this press release, but as you read in our most recent weekly newsletter, I am not one for just putting out insignificant news releases. I felt it was truly important to inform the public of all details regarding our most recent activities." Chairman Barnett went on to say, "I cannot thank our loyal shareholders enough for the patience that they have exhibited during these last two years. Transforming OMDA into a transparent, reputable, and growing company has been a long and arduous task, but I believe we will be rewarded in the future for all this hard work. With the above mentioned paid up projects, effectively no debt, and an excellent chance of a major recovery from our Lawsuit, the future of our company could not be brighter."
About OMDA Oil and Gas, Inc.
OMDA Oil and Gas, Inc and its wholly owned subsidiaries, OMDA Oil & Gas Management, Inc, Texas OMDA Drilling & Operating, Inc., and OMDA Oil & Gas, Inc. (Texas) 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, as well as 100% gross interest in an undeveloped 1,116-acre, horizontal play in the Panola Field, Panola County, Texas. Current projects include a 15% working interest in an 800+ acre play in Shelby County, TX and a Carried back-in working interest of at least 7.5% up to 37.5% in a 12-well workover play in the Concorde Dome Field in Andersen County, TX. The company is also currently partnered with Young Oil Corp., the largest Oil and Gas producer in Tennessee, on 46,000 acres in North Central Tennessee with an initial 20% interest in a six-well program and a first right of refusal on any other prospects on the Young leases.
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, statements relating to the future anticipated direction of the Oil and Gas Industry, plans for expansion, various business development activities, planned capital expenditures, future funding resources, anticipated sales growth and potential contracts. 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.