Canyon Creek Encounters High Pressure Gas in Inez Field

Canyon Creek Oil & Gas Inc. and USProduction & Exploration, LLC. (USPX), a privately held Company) has changed over to a heavy oil-based mud to keep high pressure gas from entering the #1 Roberts Gas Well, located in the Inez Gas Field, Victoria County, Texas. Canyon Creek encountered high gas pressure immediately after the work-over operation began on December 23, 2005.

"Although this high gas pressure makes the job somewhat more difficult, it is a very promising indication of the production we can expect from this well," said Don Orr, Canyon Creek President. "We estimate that the gas pressure is as high or higher today than it was when the well was first completed."

The #1 Roberts Unit was completed in February 1990 in the Yegua sand "B" stringer at 8498 to 8510 feet. Completion forms filed with the Railroad Commission of Texas at that time indicated the well was flowing 2,668 mcfgpd on an 8/64" choke with 4,727 psi flowing tubing pressure. The well was then re-completed in the Yegua "C" stringer at 8530-34 feet. The Yegua "C" stringer produced 593,000 mcfg and 16,000 barrels of condensate prior to another casing collapse.

Once the oil-based mud was circulating properly in the well and the gas influx under control, Canyon Creek removed the 2-3/8" tubing from the well. Canyon Creek purchased high grade 2-7/8" tubing to complete the well. The Company contracted with Smith International to set the whipstock at 7,193' and milling tools were used to cut a window in the 5" casing. Sidetrack operations are currently underway below 7,200' and will continue until the Yegua Sands are encountered at 8,500'.

"With this pressure and the better, larger tubing, we project production in excess of that previously reported," continued Orr. "This well will be one of Canyon Creek's top natural gas producers."

An in-house study estimates the reserves remaining total 4.3 billion cubic feet of gas and 105,000 barrels of condensate. To date, UPDA has invested in excess of $1.2 million in Canyon Creek and, upon completion, will have invested more than $700,000.00 in this single well.


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