Creston Resources Begins Production at Uintah Basin Well


Uintah Basin
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Creston Resources has commenced daily production from the four pay horizons in the first well in the joint project with Fellows Energy. Oil and gas production is derived from the Wasatch, Wasatch/Green River Transition, and Lower and Upper Green River formations. The well, which is now in continuous production, has yet to fully stabilize. Initial production has yielded a daily rate of approximately 100 BOE. A variable speed drive is scheduled to be installed this week to increase the artificial lift system capacity which is expected to lower the fluid level which may increase oil and gas production further. This will be followed, if necessary, by a change to a submersible pump to unlock the full potential of the well.

The recompletion consisted of both downhole and surface and tank battery work. Downhole work included removing bridge plugs to reestablish bypassed reserves, new perforations, and stimulation of untapped zones. Surface work included a complete renovation of the tank battery to handle increased production, including a state-of-the-art lift system which increases the fluid pumping capability while reducing electric and maintenance costs.

Gas sales have commenced as the facilities and contracts were already in place. Oil is sold at the wellhead on a demand basis into tanker trucks from holding tanks installed at the site.

Creston Resources, Ltd. is an emerging oil and gas exploration and production company, which is concentrating on the development of its 17,000 held by production (HBP) acres in the prolific Uintah Basin of Utah. Creston, and its wholly owned subsidiary Homeland Gas & Oil, currently produces approximately 190 net barrels of high quality oil (equivalent) per day. The company intends to re-work the lower production wells (including, in some cases, perforating new zones) as expeditiously as possible and put them back online at higher levels, as well as drill new wells on the many offset and infield locations available on its acreage. Most locations offer multiple prospective pay zones, from moderately shallow to moderately deep. Financing will be provided primarily by internal cash flow and joint ventures, although as production revenue increases, the company may qualify for debt financing for its very low risk development wells. Creston will also seek acquisition of projects with production and acreage with proven reserves.

Creston, headquartered in the Uintah Basin city of Roosevelt, Utah, intends to maximize shareholder value and minimize dilution by the use of non-equity financing whenever possible, as noted above.

The Uintah Basin is one of the most petroliferous areas in the country. Oil and gas production in the Uintah Basin began in the late 1940's with major development in the 1960's and expansion in the 1970's and 1980's. Since the 1980's there has been a tremendous surge of exploration and production activity in the basin with literally thousands of wells being drilled and completed. Within the last decade discoveries using the latest oilfield technological advances, including 3D seismic methods, have yielded significant discoveries in previously unproductive formations, opening up thousands of acres of the basin for exploration and development. Over 300,000,000 BO have been produced from the Bluebell/Altamont field alone, and combined total production from Duchesne and Uintah Counties in 2004 was 9,615,191 BO (65% of the total oil produced in Utah in 2004) and 146,118,755 MCF/G (49% of the total gas produced in Utah in 2004).

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