Admiral Bay Acquires 10,000 Acre CBM Project In Kansas

Admiral Bay Resources has acquired the Mound Valley CBM Project, in Labette County, in southeastern Kansas. The project consists of approximately 10,000 acres, four producing coal bed methane wells, a gas gathering system and one disposal well, and has a potential recoverable gas resource of 25 BCF (billion cubic feet). The project was acquired from a private Kansas corporation for US$300,000 cash and US$250,000 in shares and the transaction is subject to regulatory approval.

Steven Tedesco, President and C.O.O. of Admiral Bay stated, "This is an excellent addition to our core focus area of southeast Kansas".

The project is located 36 miles south of the Company's Shiloh project and 12 miles east of Independence Kansas, in the heart of an area that Quest Resource Corporation has dewatered through their projects. Gas rates are generally higher from new wells because of this. The existing wells on the project are currently making 40 MCFGPD. Management believes that it can increase production from new wells being drilled at the project by utilizing newer completion techniques.

Admiral Bay plans to drill six development wells in late March or early April on the property. Gas produced from the project wells is presently being sold to a third party. Admiral Bay is now pursuing its own tap, to maximize revenue. The wells in the area are producing from the Riverton, Row, Weir-Pittsburg, Excello and Summit zones. With the current acreage position, the Company has 125 drilling locations for future development. There is also additional acreage available for lease, adjacent to the project area.

At the Shiloh Project located in Neosho and Allen counties, Kansas, Admiral Bay announces that the drilling and completion of the Offenbacker 6-8, Middendorf 11-19, Crest 1-23, Kuhn 12-35 and Daniels 16-34 wells. As part of the ongoing development of the project, Admiral Bay is scheduled to drill six wells per month until to the beginning of July.

At the Devon Project, located in Bourbon County, Kansas, the Company announces the completion of the Martin 14-14 well. The development plan for the Devon project has twelve wells slated to be drilled and completed before the end of March.

At the Swordfish Project in Chautauqua County, the Company has run pipe on the McKenzie 12-15 well after encountering significant oil and gas shows in the Mississippian carbonates. The well is expected to be completed and producing as an oil well with gas.