Fellows Energy Inks Deal on Gordon Creek CBM Project

Fellows Energy Ltd. has signed a letter of intent agreement to acquire the 5,242 acre Gordon Creek project from The Houston Exploration Company of Houston, Texas. The Gordon Creek project is in an area of known coal resources in Carbon County in eastern Utah near other operating coal bed methane projects. Fellows believes that the area will have similar potential to the Drunkard's Wash project, which Fellows' project personnel successfully drilled previously for River Gas Corporation. Fellows will immediately evaluate further the potential of the project and prepare for drill permitting.

The letter of intent agreement was negotiated with the assistance of Thomasson Partner Associates, Inc. of Denver, Colorado ("TPA") as part of Fellows' continuing program of acquiring quality projects. Under an exploration funding agreement recently announced by Fellows with TPA, TPA will present to Fellows additional oil, gas and coal bed methane projects for evaluation by Fellows technical personnel. The exploration funding agreement calls for TPA to present to Fellows an average of eight (8) projects per year with an area of interest of from 10,000 to 80,000 acres per project. Each project presented must represent a reasonable potential of at least two hundred (200) billion cubic feet of natural gas reserves (200 BCF) or twenty (20) million barrels of oil reserves (20 MMBO). Fellows will have the right under the agreement to acquire a 50% interest in each project presented, with the other 50% to be offered to a major industry partner.

The Gordon Creek acquisition will add to the projects already acquired by Fellows, including the 25,000 acre Johns Valley Project, the 10,678 acre Carter Creek Project and the 19,290 acre Weston County Project.

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