HOUSTON, Sept. 23, 2008 (GLOBE NEWSWIRE) -- Baseline Oil & Gas Corp. (Baseline, or the "Company") (OTCBB:BOGA) announced today that the Company sustained no damage in either of its oil and gas fields from Hurricane Ike. The Eliasville field in north Texas was not in the storm's path and was never shut-in. All of Baseline's wells in the Blessing field in Matagorda County, Texas were shut-in for a week, as the third party natural gas sales line serving the field was temporarily off-line due to the hurricane. Blessing field is now producing at pre-storm rates of 4,000 to 5,000 mcfpd (gross) and all wells are back on line.
Operations -- Blessing Field, south Texas
All of Baseline's wells in the Blessing field, located in Matagorda County, Texas, were shut-in on September 11, 2008, as the third party sales pipeline was idled in preparation for Hurricane Ike. Baseline's 100%-owned gas wells and facilities were not damaged by the hurricane and on September 18th, the pipeline company allowed the Company to start producing its natural gas wells again, initially at reduced rates. All wells are now back on line and producing at pre-storm gross rates of a combined 4,000 to 5,000 mcfpd of natural gas and 225 to 250 bopd of condensate.
In addition, just prior to the hurricane, Baseline suspended its rig operations in Blessing Field. The Company was completing its new well, Southeast Blessing No. 3, working over an existing well and drilling a new well, Blessing Unit No. 2-3. All rig operations were resumed on Tuesday, September 16th, with the Company continuing its development plan of finishing four workovers and well completions during the remainder of 2008, and drilling two new wells.
Currently the Company is drilling the Blessing Unit No. 2-3 and has just reached the total targeted depth of 12,000 feet, with logging to follow this week. Well completion operations will ensue over the next four weeks. This well is offset to the East Blessing No. 4 well, which was drilled and completed in the second quarter of this year, and which has been one of the best producing wells in the field. The Company plans to move the drilling rig to another location immediately following the completion of the current well to drill its final Blessing well of the year.
Operations -- Eliasville Field, north Texas
In the Eliasville field of Stephens County, Texas, the Company has drilled and completed 7 wells and is drilling the 8th well of its 2008 drilling program. Baseline has increased gross daily production to nearly 735 bopd, the highest production level achieved in this field for a number of years. The Company plans to drill and complete 8 more wells during 2008. The Eliasville field is a mature oil field currently under waterflood on the east and central 3000 acres, and the current drilling is taking place within the existing waterflood. The Company's development plans include additional drilling on 10 acre spacing within the existing waterflood acreage, and also the expansion of the waterflood to the western 2200 acres.
Overall, the Company had planned to spend approximately $20 million in capital development expenditures during 2008. Baseline is on target to implement these plans and to significantly increase oil and gas production in its two Texas fields.
In the New Albany Shale area of southern Indiana, Baseline is planning to complete and test certain existing wells and install a gas gathering system as its next step. It is waiting on its partners to agree to specific development plans so that this natural gas resource play can be further evaluated.
Houston Office Operations
The Company's offices in Houston were not damaged during Hurricane Ike and were closed for four business days during and right after the storm. Baseline is pleased to report that none of its employees or their families were injured as a result of the storm. The business and administrative tasks of the Company are now proceeding as normal.
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning estimates of expected results from drilling exploratory and development wells and associated costs, statements relating to estimates of, and increases in, production, cash flows and values, statements relating to the continued advancement of Baseline Oil & Gas Corp's projects and other statements which are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although Baseline Oil & Gas Corp. believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that the Company's projects will experience technological and mechanical problems, that geological conditions in the reservoir may not result in commercial levels of oil and gas production, that changes in product prices could occur, and other risks may be realized as disclosed in Baseline's Annual report on Form 10-KSB filed with the U.S. Securities and Exchange Commission.