HOUSTON, Sept. 7, 2005 (PRIMEZONE) -- OMDA Oil and Gas, Inc. (Pink Sheets:OMOG), an oil and gas production company announces, as anticipated in yesterday's newsletter, that the service and completion rig and crew have now arrived on location at the Young Oil Project in Tennessee. This rig and crew will begin operations this week on the first three drilled and logged gas wells. Results from analysis of "cuttings" during drilling and subsequent electronic logging have indicated commercial quantities of natural gas in up to three zones in two of the wells and two zones in the third well. The common zones in all three are the Fort Payne and the Monteagle. The logs indicate that there is a combined excess of 40 feet of primary pay thickness in each well. Completion attempts in these two zones will be conducted in the traditional manner, which will involve cleaning and stimulating the wells with acid, testing the wells, and ultimately tying them into the recently completed area pipeline. Additionally, two of the wells show large sections of a natural gas-bearing shale. This type of shale would historically indicate a "tight" non-commercial zone; however, due to high natural gas prices, these types of zones have recently proven successful and have been commercially exploited using relatively expensive modern "fracing" techniques. Once the Fort Payne and Monteagle are fully tested, the partners are considering completion attempts in the immensely thick shale layer of the wells.
It is currently anticipated that the rig and crew will stimulate and attempt completion in the two primary zones of each of the three wells. This process will be completed over the next week to 10 days. As each well is completed, results will be published either in the company's weekly newsletter or by press release. More information about the 46,000-acre Young Oil Project including pictures and videos can be found on the Company website in both the "Projects" and "Investor Information" sections. The web address is http://www.omogoil.com.
The company also announces a preliminary joint venture update. The company is actively pursuing additional joint venture opportunities with several oil and gas companies in the United States and Canada. OMDA Oil and Gas has spent the past several months in meetings and negotiations bringing these potential partnerships to near fruition. These joint ventures will include partnerships in producing and non-producing wells. OMDA will also have right of first refusal on some of these companies' top prospects, as well as any subsequent acreage that may be added at a later date.
Adam Barnett, chairman of OMDA Oil and Gas, stated, "With the completion rigs at the Young Oil well sites and with the huge potential of our other projects, I could not be more excited about OMDA's future. I believe that some of OMDA's most exciting current projects center around their heavy natural gas exposure. These include the above-mentioned Young Oil Project, as well as our extremely exciting Patroon prospect. Patroon's third party Reservoir Engineering Reserve reports indicate that 80 percent% of the massive potentially recoverable reserves are gas. We are scheduled to begin drilling the Patroon project over the next few weeks. Natural gas prospects have been considered almost the industry's 'step child' in regards to investor thinking. This attitude is rapidly changing; however, as importing natural gas from places such as the Mid-East grows more and more expensive. It is also important to understand the potential of gas prices in the face of impending shortages due to the fact that there is no natural gas equivalent of the 'Strategic Petroleum Reserve.' These price rises can currently be witnessed by the recent anomaly of a reversal of BTU equivalent pricing of natural gas versus oil. Oil has historically traded as high as a 30 percent premium to natural gas using the traditional 6,000 BTU of gas to one barrel of oil formula. At the current pricing of $12 per thousand BTU (or MCF approximate equivalent), gas is now valued at $72 per barrel of oil equivalent."
Barnett went on to say, "As I have stated many times, we can not become complacent. We must always explore other deals and investigate possible joint ventures. The management teams of the prospective joint ventures mentioned above have already shown bold interest in working with OMDA on some of our current projects. We are also enthusiastic about participating in these companies' endeavors, which could include several producing wells in the Texas area." Barnett added, "I believe the time-line for the launch of at least one of these joint ventures could be as soon as late next month. We are currently performing the necessary due diligence concerning their current and future projects, while allowing them to fully understand the vast opportunity here at OMDA. We are very excited about diversifying our revenue streams and harvesting these untapped oil and gas opportunities. Even though these partnerships are in the preliminary stages, I felt it important to share their progress with our shareholders. It is important to understand that OMDA is consistently searching for beneficial and profitable projects, and we believe that these opportunities, combined with our own projects, will make the next few months the most exciting and productive in the company's history."
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 percent in 355 producing and non-producing oil and gas wells in Louisiana and Texas. The company also owns 100 percent gross interest in an undeveloped 1,116 acre, horizontal play in the Panola Field, Panola County, Texas. Current projects include a 15 percent working interest in an 800+ acre play in Shelby County, Texas and a carried back-in working interest of at least 7.5 percent up to 37.5 percent in a 12 well workover play in the Concorde Dome Field in Andersen County, Texas. OMDA is also in a partnership agreement with Young Oil Corp, the largest oil and gas producer in Tennessee on 46,000 acres in North Central Tennessee, with an initial 20 percent 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.