Natural Gas Systems Says First Four Wells in Delhi Field Successful

Natural Gas Systems reports that it has successfully drilled during 2005 the first four wells in its seven well development drilling program in the Delhi Field in Louisiana. Three of the wells have been completed to date and the fourth is currently being completed, all in reservoirs between 3,000' and 3,300' in depth. The Company expects to complete the first phase of development drilling in early 2006.

The combined current gross productive rate of the first three wells is approximately 170 barrels of oil and 200 thousand cubic feet of natural gas per day (136 barrels and 160 thousand cubic feet of gas net to the Company's interest). At current oil and gas prices, the new production is expected to increase the Company's net revenues by $280,000 per month, or $3.3 million on an annualized basis, more than doubling the $181,000 monthly average revenues reported for the three months ended September 30, 2005. At these rates, the wells will pay out their capital cost in a little more than two months.

Robert Herlin, President of NGS, reported, "This incremental production reflects only the first three of the drilling locations identified from our 2005 study of a quarter of the 13,626 acre Delhi Field. The production results to date exceed the expectations reflected in our proved reserves report, and we are continuing our geological work to identify additional drilling locations. We believe that our development activities to date are just beginning to tap the potential oil and gas resources remaining in our Delhi Field."

As to specific results, the Delhi Unit 87-3 was completed as a flowing oil well in the Upper Barrier Sand within the Delhi Holt Bryant Unit at an estimated sustained rate of 112 barrels of oil and 40 thousand cubic feet of gas per day on a 10/64" choke. The Delhi Unit 92-2 was completed in the gas cap transition zone of a Lane Sand reservoir at an initial production rate of 500,000 cubic feet of gas per day; however, geologic mapping of the reservoir suggests that the well will transition to oil production. The Delhi Unit 70-4 was completed as a pumping well in the Murphy Sand reservoir at an approximate initial rate of 60 barrels of oil and 20 thousand cubic feet of gas. The fourth well drilled, the Delhi Unit 225-2, is being completed in a substantial Holt Sand reservoir that appears by downhole logs to be water-free and oil productive.

NGS acquires and develops oil and gas resources and applies conventional and specialized technology to accelerate production and develop incremental reserves. NGS owns 100% of the working interest in the 13,636 acre Delhi Field in northeastern Louisiana that has produced over 200 million barrels of oil since its discovery in 1945, according to the Company's independent engineers. NGS also owns a 100% working interest in, and is actively renovating and redeveloping, portions of the Tullos Urania and nearby fields in north central Louisiana. Additionally, the Company is developing two projects in central Texas.
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