Fellows Continues Operations on its Overthrust Project

Rich County, Utah
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Fellows Energy has commenced coring operations on its Crane 6-7 Well on its newly optioned Overthrust Project. Coring will initially cover the forty-foot-thick Spring Valley coal seam and strata immediately above and below that seam, from approximately 2100 feet down hole to approximately 2300 feet, and will be followed by coring of the Bear River coal seam with an estimated thickness of 115, beginning at an approximate depth of 3,200 feet. The rig will retrieve wire line cores of the coal and complete the well to its estimated depth of 5,000 feet. The core analysis, combined with information from three wells previously drilled by Quaneco, LLC in the vicinity will provide the basis for formulation of total gas in place estimates. Previous work by Quaneco yielded values of gas content per ton of coal and gas pressures which compare favorably with the average values of other successful producing coal bed methane fields.

Higher up in the hole, Fellows encountered additional coal seams that correspond to seams in other wells in the region, which exhibited good gas shows. Work on the well has proceeded smoothly with no operational problems in the field. Fellows anticipates that the well and the coring data will be completed on schedule. The characterization of the reservoir from the coring tests being performed by Fellows will allow for detailed pre-completion stimulation studies to be performed in order to increase the chances for successful completion and production of methane.

Fellows recently entered into a Purchase and Option Agreement with Quaneco, L.L.C., an Oklahoma limited liability company, to acquire a 65% working interest in the Overthrust Project, comprising over 183,000 acres of oil, gas and coal bed methane leases in northeastern Utah and southwestern Wyoming. Fellows will test the three identified coal seams that run through much of the area. Quaneco previously drilled seven exploratory wells that identified multiple coal seams of Tertiary and Cretaceous age that appear to be prospective for coal bed methane. Some of these coals are of similar age and depositional condition to other productive coal bed methane fields.

Management hopes these transactions will bring additional value to the shareholders of Fellows Energy. There is no guarantee that the agreement with Quaneco or the leases that Fellows has recently acquired will increase the value of its shares of common stock, or that Fellows will acquire rights to explore and operate any other such projects, or that in the event that it acquires rights to explore and operate other such projects, that these actions will be successful or increase the value of Fellows' common stock.

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