UnionTown to Purchase Ks. Natural Gas Property

UnionTown has signed a purchase agreement with JayHawk for the purchase of a coal seam natural gas property called the Uniontown Project located in Bourbon County, Kansas.

The property is located in the vast Cherokee Basin, which straddles Kansas, Missouri, Arkansas and Oklahoma. The property size is about 45,000 gross acres.

The Cherokee Basin is an intercratonic depression located in southeastern Kansas, southwestern Missouri and northeastern Oklahoma that has been producing gas for over 80 years from carbonaceous shales and coals. In the past fifteen years there has been a systematic exploitation of these unconventional reservoirs in the basin. New techniques are constantly being employed that work specifically in some parts of the basin but not in others including hydrofracturing. The coals are generally less than two feet thick and carbonaceous shales of the Cherokee Group generally average four feet thick. The productive coals and carbonaceous shales are found from 200 to 2,500 feet and the coals have ASTM rank of high volatile A.

Reported gas content in the coals varies from 5 to 450 scf per ton. Gas quality varies from 96 to 98%% methane, 1% to 3%+ ethane +, 0.5&+ CO2 to 92% methane, a few percent nitrogen, and CO2 with BTU contents varying from 850 to 1050. Water rates vary from a few barrels to over 1000 barrels a day. Initial completion practices began with single-zone completions until 2002, when the State of Kansas vacated the rules preventing commingling several zones in the same well specifically being produced for coalbed methane and shale.

The closing of the transaction contemplated by the agreement will occur no later than December 15th, 2010.