Nextraction Cites Reserve Report for North Pinedale Project


Pinedale Anticline
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Nextraction announced that MHA Petroleum has completed an update to its National Instrument technical report (NI-51-101) estimating reserves and future net revenues for the Company's North Pinedale Project, located on the crest of the Pinedale Anticline in Sublette County, Wyoming.

Nextraction is selling gas and condensate from its first successful well, the Nobel #6-24, that is currently undergoing initial flow back rate tests. The initial production tests from the Pinedale well provide information to enhance the reserve estimates for future updates to the reserve report. Nextraction holds 3,624 acres in a joint venture with Vantage Energy LLC ("Vantage"), an experienced operator in the region.

The MHA NI 51-101 reports the Company's Probable Reserves (P2) at 4.977 BCF recoverable gas plus 59.7 Thousand Barrels of Oil (MBO) recoverable for the Noble #6-24 well based on Original Gas In Place (OGIP) of 11.069 Billion Cubic of Gas (BCF). The P2 valuation estimates 37-44% recovery factor of OGIP. MHA's projections estimate that the P2 reserves will generate gross revenues of US $24.486 million with Future Net Revenues of US $12.716 million before income tax (net of all drilling and completion costs). For a 32 well development program the report indicates Possible Reserves (P3) of 79,864 BCF and 959 MBO net to the Company. Possible Reserves (P3) include the Probable Reserves (P2). The P3 valuation is based on 70% recovery of OGIP, and the Company's interest has Future Net Revenue of US $112.311 million, discounted at 10% annually.

MHA modeled the Company's 100% working interest in the Noble #6-24 well and that it will receive 100% of the revenues until 150% of the capital costs to drill the well have paid out; at which time the Company's partner has an option to back in as a 26.25% working interest owner, leaving the Company with a 73.75% interest. Nextraction retains the option to drill a second well under the same terms, and then will participate as a 25% working interest in all subsequent wells drilled.

Company President, Mark S. Dolar, stated, "We requested the updated valuation to assist in the determination of Original Gas In Place after drilling the Noble #6-24 well. This summer we have placed both our Pinedale and Appalachian Basin resource plays in production, with cash flow beginning in the third quarter of 2010. Our next steps are to drill an additional 3 wells in our Appalachian Basin play in 2010, followed up with an aggressive drilling and completion program in 2011 that includes an additional well in North Pinedale and 25 wells in the Appalachian Basin."

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