Petrosearch Plans More Lodgepole Reef Exploratory Tests

Rocky Ridge Petrosearch L.L.C., a wholly owned subsidiary of Petrosearch Corporation, is planning exploratory drilling of Lodgepole reefs on nearly 45,000 acres recently acquired in the Williston basin near Dickinson, North Dakota, under a farm-out agreement with Oil For America (OFA). OFA's proprietary exploration technology indicates the acreage--in northeastern Slope County and southwestern Stark County-could contain as many as 50 new Lodgepole reef exploratory targets, extending Petrosearch's Lodgepole play into a new area.

"The 44,838 acres acquired for development by Rocky Ridge Petrosearch was not included in our original Lodgepole exploration agreement with OFA, signed in May 2003," Petrosearch president Bradley J. Simmons said. "This is a significant expansion of our relationship with OFA. Locations have been chosen for the first two exploratory wells to be drilled on the leasehold, the first of which is scheduled to be drilled before July, 2004."

Another Petrosearch exploration and production (E&P) subsidiary, Guidance Petrosearch L.L.C., is producing more than 1,000 barrels per day of oil and 400 mcf per day of gas from the Petrosearch Gruman 18-1 well, a successful Lodgepole exploratory re-entry well in Stark County. Since completion in November 2003, cumulative sales production of the Petrosearch-Gruman 18-1 has exceeded 75,000 barrels of crude, including tanker truck shipments and pipeline deliveries. Guidance Petrosearch is drilling another Lodgepole reef test in Stark County, the Petrosearch-Zastoupil 26-1A, and plans to spud its third Lodgepole test in Stark County, the Petrosearch-Kesting 2-17, immediately following the Petrosearch Zastoupil 26-1A at a surface location about one mile east of the Petrosearch-Gruman 18-1. The company also is permitting the Petrosearch Privratsky 16-1 in the same vicinity for drilling following the Petrosearch-Kesting 2-17.

Simmons noted that Petrosearch's business model calls for each of the company's E&P subsidiaries, now totaling nine with projects across Texas, North Dakota and Montana, to stand on its own, but it doesn't preclude two or more subsidiaries from working in the same area.

"Adding a second exploratory front to our Lodgepole play provides us with the opportunity to accelerate our North Dakota drilling program targeting the kind of high-potential prospects that will help us achieve our ambitious growth targets," Simmons added. "And there are significant economies of scale at work to benefit multiple Petrosearch subsidiaries in the Lodgepole play in North Dakota."

Lodgepole reef wells in the Williston Basin have been sources of some of the most prolific oil wells in the Continental United States since they were discovered in the early 1990s. Successful Lodgepole reef discoveries have produced at rates well in excess of 1,000 barrels per day of oil equivalent per well, with cumulative production often amounting to more than 1 million barrels of oil equivalent per well, according to past reports in leading oil and gas periodicals.