LAS VEGAS, July 17, 2006 (PRIMEZONE) -- KOKO Petroleum, Inc. (Pink Sheets:KKPT) is pleased to announce that it has participated in the drilling of the first Barnett Shale Horizontal well -- the Inglish No. 1H. Drilling commenced on June 30, 2006 and as of this date, 7,500 vertical feet have been drilled. KOKO has acquired a 1 percent working interest. This well is located in the Barnett Shale play of the Fort Worth Basin, Texas and is operated by Rife Operating, Inc. The total vertical depth of the well will be approximately 8,000' and the lateral portion of the well will extend for approximately 2,000'.
Vertical wells in this area have performed from good to moderate. The horizontals that have been drilled, most recently by Encana, have had outstanding results. According to published TRC data, Encana's foreman 2H has produced approximately 35,000 barrels of oil in three months. The foreman well is in close proximity to the Inglish 1H.
"Horizontal wells access more of the 'pay zone' via the extension of the lateral resulting in higher production. Although these wells are more expensive, the incremental costs are offset by the anticipated significant increase in oil and gas produced," says Ted Kozub, KOKO's CEO. "We will still have to complete the well with the same high-pressure, slick water frac as we do with the vertical wells as the lateral does not completely alleviate the permeability problems associated with natural shale plays; it does, however, expose the well bore to more pay and increases in production can be significant."
The well is expected to be completed by the first part of August 2006.
The current Barnett Shale oil and natural gas development in North Texas is the most active play in the United States. The Newark East Field (Barnett Shale) is the largest natural gas field in Texas, and Texas produces 25% of the USA's natural gas. The Newark Field produced 368 billion cubic feet of gas in 2005 and 1.3 trillion cubic feet since 1999.
KOKO is in the process of an SB-2 application and the company intends to become fully reporting.
Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Technical complications which may arise could prevent the prompt implementation of any strategically significant plan(s) outlined above.