"Eastern Consolidated Oil and Gas Inc. has just completed a seventy two hour blow-down test on this well and the results reveal an open flow from this well of 472,000 cu. Ft. per day (472 MCF)," Guthrie stated. "The results of this test are just outstanding and very encouraging for a well in this formation. We have several more wells scheduled to be drilled in this area, seven of which are direct offset locations to this well. Devonian Shale wells have historically been long-term gas production wells. Many Devonian Shale wells have experienced commercial gas production in excess of 50 years," David Guthrie, President and CEO stated.
"This Morgan County gas field will be served by Jefferson Gas LLC. Jefferson is presently in the process of upgrading its pipeline and compressors for this service area. ECOG has been advised that the pipeline upgrade will be completed by April 1, 2005. Jefferson conveyed to ECOG that Jefferson will be in position to deliver ECOG's gas from the Morgan County gas field upon completion of the Jefferson Gas pipeline upgrade," Guthrie stated.
"The market for this gas presently exceeds $7.00 per MCF and is predicted to remain strong. ECOG's plans to aggressively continue gas-well development in this area," Guthrie stated.
"Natural gas production and coal production are consistent with CEI's goal of becoming a reliable, multi-fuel supplier of energy. The recent Devonian Shale gas-well success in Morgan County contributes greatly toward this goal," Guthrie said.
CEI recently signed a $73,000,000 (seventy three million dollar) three-year coal supply contract with American Electric Power. This contract allows Eastern Consolidated Energy Inc., a wholly owned subsidiary of CEI, to deliver 40,000 tons of coal per month to the AEP Kentucky Power Generating Station at Louisa, KY over a 36-month period.
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