Fairchild International Reports Success from Coalinga Nose 1-1 Well

Fairchild International is pleased to announce that the Coalinga Nose 1-1 well sidetrack operation is currently at 10,160 feet with excellent gas show encountered.

The most recent report received from the operator at the site states: "We have three additional drill breaks, all with excellent gas shows. The first being 9,925 to 9,935 feet (172 measuring units), the second 9,950-10,000 feet (1,750 measuring units) and 10,100 to 10,135 feet (630 measuring units). The quality of all shows is far better than that seen in the original hole. The 9,950-10,000 foot show had very good live oil shows as well. What is significant about these shows is mud weights are as high or higher at these depths than in the original hole. These shows are as good or better than we have seen in many of the recent wells drilled this year. We will be pulling and replacing the current bit and expect to be at the top of the Brown Mountain Sand within the next 3 to 4 days."

To date, $3 million (U.S.) has been spent on the land including a 3-D seismic survey shot in 1997 covering 16 square miles including the prospect area. According to consulting engineer, Mark Anderson, this is a "superior prospect based on a quality modern 3-D seismic grid, abundant and thoroughly mapped well control," and "both production and down dip shows in the target horizon." The 3-D seismic data "clearly corroborates existing production from known stratigraphic and structural features," from the Cretaceous Brown Mt. Formation which is largely untested in this area. Only one well has penetrated the Cretaceous Brown Mt. Sand within the seismic shoot area in 1942. This well had significant untested gas shows in the Brown Mt. Sand from 11,455 feet to bottom. Originally drilled for oil, the off-scale gas shows at the bottom of the well were not tested and the well was abandoned due to a lack of natural gas market during World War II. Four-way closure can be observed within the prospect area where the Brown Mt. Sand is up to 400 feet thick.