HOUSTON, Oct. 5, 2005 (PRIMEZONE) -- OMDA Oil and Gas, Inc. (Pink Sheets:OMOG), an oil and gas production company, through its Chairman, Adam Barnett, announces an update on its Young Oil Project. The operator has informed the company that the Gernt Estates number 16, the second of three recently drilled wells, has been tested and dually completed in the Fort Payne and Monteagle formations. These are the traditional zones in the area. As with the Gernt number 15 announced last week, this well is also being stubbed into the transport line and is expected to begin production by the end of this week. This well, unlike the Gernt number 15, is wet with oil mist. This oil mist indicates that conventional open flow testing would not give meaningful results. This well; however, does have considerably more shut-in pressure than the number 15 well. It also possesses similar thickness to the Monteagle and Fort Payne formations. The number 16 re-pressurizes faster than the number 15; therefore Young is confident that it will exceed initial recovery rates of the number 15 after the well is cleaned-up and in production for a few weeks. For the sake of clarity, the company states that the oil in this well is only a small mist. This is of little concern, due the fact that this is a natural gas well and not an oil well. OMDA expects to be able to announce the actual production levels from this well after it has flowed for a few weeks.
A short video of this well can be viewed on the company's website at http://www.omogoil.com/investori.html . You may view this video by clicking on the "Young Oil Venture Video" link.
As in the case of the number 15 well, engineering reports estimate ultimate recoverable reserves of 250 million cf from each well. Natural gas wells in this area tend to be very long lived with some producing over 20 years. If the well just maintains this level and does not show an increase, OMOG should receive its initial investment back on its 20% interest (15% net) in approximately eight months with an additional five to seven times return on investment over the life of the well. These estimates are based on current natural gas prices.
As mentioned in our Sept. 30th announcement, this is the second of three gas wells. All three have now been drilled to total depth in this initial program with Young. This well contains a large section of natural gas bearing shale. As mentioned in the number 15 release, completions in the shale require a more aggressive "fracing" technique. This technique carries an additional cost beyond the original "turnkey" arrangement. Young and others have only recently begun experimenting with shale completions in other area wells, but they have reported very encouraging preliminary results. Due to the large thickness of the shale, it is very likely that a completion attempt will be made on this well; however, no firm decision has been made at this time. The last of the three wells is set for acidizing this week and should be tested next week. Results will be announced as soon as they are available.
Adam Barnett, Chairman, stated, "I am happy to see that we are now getting such favorable results from our Young Oil project. This is truly an exciting time in the history of OMDA, especially with natural gas prices continuing to rise. I am most pleased with these well's prospective rate of production. With just one well having the ability to cover our initial investment, I feel that the Young Oil Project holds vast potential for our company and our shareholders. I am anxious for the well to be connected to the transport line and to begin production this week. I believe this will signify OMDA's transformation from just a holding company with land-leases to a company with viable producing wells. It has been a long haul for our shareholders with many frustrating delays and I appreciate their patience. I am eager to share all updates with our investors and will continue to announce them through press releases and our weekly newsletters."
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.