Aspen Exploration Successfully Drills Malton Black Butte Field Well

Aspen Exploration has made a gas discovery in the Sacramento Valley gas province of northern California.

The Johnson Unit #11 well located in the Malton Black Butte Field, Tehama County, California, was drilled to a depth of 4,800 feet and encountered approximately 80 feet of potential gas pay in various intervals in the Forbes formation. Production casing was run based on favorable mud log and electric log responses. The well will be perforated and tested within the next couple of weeks. The rig will now be moving to Aspen's Merrill #31-1 well, also located in the Malton Black Butte Field. Aspen has a 31% operated working interest in the Johnson #11 and Merrill #31-1 wells. The depths of the productive formations range from 1,800 feet to 6,000 feet. This field has produced 140 BCF of gas to date. Aspen has now drilled 6 successful gas wells out of 8 attempts in this field. Aspen also acquired 4 producing gas wells and 1 saltwater disposal well in this field about 10 years ago. Several of these wells have been producing for over 30 years and have produced excellent gas reserves from these shallow depths.

The Johnson #11 was the second well that Aspen has drilled this year. The first well, the Sachreiter #1-33, was a wildcat drilled to a depth of 7,700 feet in Colusa County, California. This well had excellent mud log shows (2,000+ units) across the seismically defined Forbes anomaly, but the electric logs indicated the zone was wet and the well was plugged and abandoned.

Aspen expects to be keeping 1 or 2 rigs busy drilling the 8 remaining wells in its 2005 drilling program. Four of these wells will be in the West Grimes Gas field located in Colusa County, California. The wells in this field produce from multiple Forbes intervals ranging in depth from 6,000 feet to 8,500 feet and have produced over 80 BCF of gas to date since it was discovered in 1960 by other parties. Numerous wells in this immediate area have produced at very prolific flow rates (4,000 MCFPD), have yielded excellent per well reserves (3 to 4 BCF per well), and have long productive well lives. Several of the 10 producing wells that Aspen acquired in this field two years ago (see prior news releases) have been producing for 40 years. Aspen believes that several of these wells may have additional gas potential in behind-pipe zones which have not yet been perforated. Aspen drilled 4 gas wells out of 4 attempts in this field last year. These wells were drilled based on a recently acquired 10.5 square mile 3-D seismic program located over Aspen's 5,000 plus leased acres in this field. Ten additional excellent drilling prospects have been identified. Aspen has a 21% operated working interest in this field. Aspen's other 3 wells planned for 2005 will be located in the Winters (1) and Kirk Buckeye (2) gas fields. The actual timing and drilling of these wells will be contingent on permits and drilling rig availability.

Aspen drilled ten successful gas wells out of ten attempts in 2004 for a 100% success rate. "We believe that our strategy of focusing primarily on low-risk exploration activities has contributed to our success," said Robert A. Cohan, Aspen Exploration Corporation's Chief Executive Officer. "Aspen's increased cash flow coupled with the present inventory of prime drilling acreage provides a sound basis for Aspen's continued growth as a profitable and successful energy producer."

During the previous 4 years, Aspen participated in the drilling of 24 operated wells, 21 of which were completed as gas wells, and 3 dry holes which were plugged and abandoned, a success rate of 87.5%. Aspen currently operates 45 gas wells and has non-operated interests in 15 additional wells in the Sacramento Valley of northern California. Current spot gas prices (PG&E Citygate) are in excess of $6.50 per MMBtu. Aspen has also entered into fixed contracts for a portion (approximately 25%) of its gas, at fixed prices ranging from $8.40 to $8.43 per MMBtu for the five month period from November 2005 through March 2006. Aspen's summer hedge for the 6 month period ending September 30, 2005 was approximately $6.67 per MMBtu for 40% of Aspen's production. PG&E Citygate gross prices are currently $0.45 per MMBtu less than NYMEX gas prices.