Micron Enviro Systems Acquires Stake in Manahuilla Creek

Micron Enviro Systems has acquired a working interest in the Manahuilla Creek prospect in Goliad County, Texas.

A 6,700-foot test well will be located on approximately 1,265 acres of oil and gas leases covering the expanded Yegua trend. The Middle Eocene sands of the expanded Yegua trend of the onshore Gulf Coast basin have been a prolific over-pressured gas-condensate producer with total gas production to date exceeding 800 billion cubic feet with an estimated trend recovery close to 2 trillion cubic feet of gas. The first well is scheduled to commence on or about March 15, 2004 barring any unforeseen issues. Bernie McDougall, President of MSEV stated, "This is a tremendous opportunity for MSEV to become involved in a project with such tremendous upside. We are looking forward to drilling in such a prolific oil and gas region. This prospect has substantial potential and we look forward to attempting to fully exploit this world-class oil and gas area. This now gives MSEV three separate drill programs in the state of Texas alone. We are anticipating that MSEV could be either drilling or fracing up to 5 wells in the next two months alone. When you consider the historically high prices of oil and gas, this could be a tremendously lucrative time for MSEV if all the wells are commercially successful."

Several fairly prolific fields have been discovered and exploited in Goliad County, the two most recent being the Jobar and Perdido Creek fields located approximately five miles north. The Jobar field is located in a normal pressured Yegua sequence with bottom-hole pressures of 2,600 pounds per square inch at 5,400 feet. The Perdido Creek field is down dip and geopressured, having bottom-hole pressures of 3,600 pounds per square inch at 5,600 feet with recoverable reserves of 1.1 million cubic feet per ac.feet and a condensate content of 30 barrels per million cubic feet. Initial production rates are approximately two million cubic feet per day.

Both fields above were discovered by drilling 2-D seismic amplitude anomalies, which produced oil, gas and condensates in various proportions. Reservoirs are discontinuous small fluvial sand bars and channel deposits of the Yegua formation. Comparative 2-D data have identified similar amplitude anomalies within the Yegua sands on the Manahuilla Creek prospect which are much more extensive and contiguous. Geological interpretation indicates the sands were deposited as extensive deltaic sands at the edge of the ocean basin. As such, these deltaic sands are much more widespread and stratigraphically lower than the smaller discontinuous river deposits to the north.

MSEV has been advised that Flatrock Energy Partners LP is the operator of record. Flatrock is a full-service oil and gas-consulting firm based in San Antonio, Texas.

MSEV has been notified by the operator of the Martex Prospect in Jack County Texas that they expect to frac and/or drill up to 4 wells in the next six weeks. There have been slight delays in the Wimberley #5 and the Kinder #1 to this point, but the operator feels that barring any unforeseen issues both of these wells will be worked on by next week.

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