Petrogen Reaches Total Depth on its Emily Hawes #3 Well

Petrogen updates its operations on its sidetrack EH3 well in the Emily Hawes Field prospect, on Matagorda Island, Texas. On September 28th, 2004, the drilling rig commenced drilling a sidetrack of the Emily Hawes #3 well towards the objective target approximately 1,000 feet northeast of the original well as planned. On October 4th, the well reached the total measured depth of 6,725 feet without incident.

Based on pre-drill expectations Petrogen anticipates encountering as many as six recognized pay sands in the Basil Miocene formation between depths of 6,250 feet and 6,500 feet, with projected net pay of approximately 50 feet. The Company will perform post-drill analysis and anticipates releasing preliminary results within the next four to ten days.

The Basil Miocene formation at Emily Hawes Field has previously produced approximately 1.7 billion cubic feet of natural gas ("BCFG") through the EH #'s 1, 2 and 3 wellbores, with gross daily production amounts peaking at 16 million cubic feet of gas per day ("MMCFGD") prior to the wellbores sanding up due to completions that excluded gravel packing techniques necessary to eliminate sanding problems. As a result, the three wells were abandoned over 15 years ago, and Petrogen is the first operator since that time that has commenced operations to re-enter the Miocene formation in an attempt to re-establish production at Emily Hawes Field.

Petrogen initiated the first phase of operations on August 19th, 2004 through the re-entry of the EH3 well. Plugs were set over the previously completed perforations with planned operations that would see the drilling of a sidetrack to an un-drained portion of the field.

Petrogen is partnered on the developments at Emily Hawes Field through two individual farm-out agreements with Houston based Nortex Corporation and Darcy Energy, LLC whereby Petrogen retains a 34.2% working interest and a 26.5% net revenue interest in all hydrocarbon developments to depths above 7,100 feet. Petrogen will only be funding approximately 17% of development costs of the E.H. #3A - Sidetrack.

The EH3A Sidetrack will be the first of a potential four well drilling program in an effort to stimulate the development of natural gas production from Hawes Field. Previously, the Hawes Field produced approximately 1.7 Bcf of natural gas and multiple third party engineering, geophysical and petrophysical analysis estimated reserves to be 12.2 BCFG remains to be produced from multiple Basil Miocene Sands.