Fellows Energy Acquires Stake in Carter Creek Project

Fellows Energy Ltd. has exercised and closed its option to purchase the 10,678-acre Carter Creek Oil & Gas Project in the southern Powder River Basin in Wyoming. The Carter Creek Project covers 10,678 net acres in the southern Powder River Basin in which Fellows has a 100% working interest. Fellows believes Carter Creek hosts a very low-risk hydrocarbon project. Based on its analysis of the geologic structure of this region, Fellows expects to find productive sections in the Cretaceous, Niobrara, Turner (Frontier) and Mowry layers, in that several existing wells in the Carter Creek area currently produce oil. In addition, Fellows announced it has submitted final permit documents and mobilized a drill contractor to commence drilling in the 25,000-acre Johns Valley coal bed methane project in Utah. Fellows now has under option or direct acquisition over 60,000 acres of energy projects.

These developments follow the announcement that Fellows has also entered into an exploration services funding agreement with Thomasson Partner Associates, Inc. of Denver, Colorado ("TPA"), as part of Fellows' continuing program of acquiring quality projects. Under that agreement, TPA will present to Fellows oil, gas and coal bed methane projects for evaluation by Fellows technical personnel. The agreement calls for TPA to present to Fellows an average of eight (8) projects per year with an area of interest of from 10,000 to 80,000 acres per project. Each project presented must represent a reasonable potential of at least two hundred (200) billion cubic feet of natural gas reserves (200 BCF) or twenty (20) million barrels of oil reserves (20 MMBO). Fellows will have the right under the agreement to acquire a 50% interest in each project presented, with the other 50% to be offered to a major industry partner.