Energas Begins Bluegrass Drilling Program

Energas Resources reports that the Bluegrass Drilling Program has commenced in eastern Kentucky. Drilling of the first well, the Bluegrass A1, began last week and should reach total depth this week. Energas and Double G Energy, Inc. amended the original drilling agreement in order to drill each well deeper to approximately 1,100 feet. Energas and Double G Energy decided to drill deeper because of unexpected oil and gas bearing zones discovered in the Energas well #13.

This drilling agreement allows for Energas and Double G Energy, Inc. to drill up to 200 wells within the Company's Pulaski County leases in eastern Kentucky. Phase I of the program is for 55 wells to be drilled and completed in 2004. Double G will fund the drilling program carrying Energas for it's part with a payout arrangement from production. Energas, through it's wholly owned subsidiary TGC, Inc., will be the operator in the field.

Additionally, a second compressor station is being built, to enhance the first compressor station, and plans are being made to construct a third compressor station and new sales pipeline in order to increase the sales capacity of natural gas in the Pulaski field. Also, Energas is making plans to deepen the first 11 wells drilled by the Company in the Pulaski field as well as deepening several of the original 29 acquired wells in this area to look for the zones discovered in well #13.

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