Petrogen Brings Emiily Hawes Well Onstream

Petrogen reports that production of natural gas commenced on July 22, 2005 from the Emily Hawes #3A discovery well (EH#3A) at Emily Hawes Field, Matagorda Island, Calhoun County, Texas. Currently, the EH#3A is producing natural gas at rates fluctuating from 250 thousand cubic feet of gas per day (mcfgd) to 1,500 mcfgd through a 12/64" choke while recovering completion fluids and encountering high pipeline pressures. Once the EH#3A cleans out and daily production rates stabilize, a decision to utilize compression to offset high pipeline pressures will be determined to help establish an optimal daily production rate from the well.

The EH#3A was successfully completed utilizing a gravel pack and sand screens and was tied into the Company's Matagorda Island Gathering System (MIGS) transmission pipeline. Extensive throughput infrastructure design, manufacturing and installation were also completed as part of the overall natural gas management systems needed for Petrogen's current and future operations in the area. Natural gas production from Emily Hawes Field will be transported through the Company's MIGS, which ties directly in and delivers to the 24" Matagorda Offshore Pipeline System on Matagorda Island, adjacent to Petrogen's Emily Hawes Field.

Petrogen's Chairman and CEO, Sacha H. Spindler stated, "We are very pleased with the outcome of our EH#3A discovery well at Emily Hawes Field. Our concerted effort to complete the design, manufacture and installation of the entire natural gas gathering, transmission and metering systems required to deploy throughput of Petrogen's natural gas production from Emily Hawes Field is being rewarded. With that infrastructure now in place, we are fully capable of expanding operations not only on Emily Hawes Field, but in other areas of interest in close proximity to the field."

On November 23, 2004, Petrogen announced that it successfully tested natural gas from the EH#3A well from the Basal Miocene M1 sand with an absolute open flow of 1,998 mcfgd; 978 mcfgd was tested on a 14/64" choke with flowing tubing pressure of 1,395 psi and a final shut-in pressure of 1,950 psi. On May 7 2005, crews were mobilized to Emily Hawes Field and immediately began an extended production test on the EH#3A wellbore, which resulted in well flow rates of 750 mcfgd on a 12/64" choke with flowing tubing pressure of 1,420 psi against 400 psi back-pressure. Final shut-in tubing pressure of 1,960 psi was recorded after completion of the test. Analysis of the gas produced during the extended test measured 97.3% methane with 1,025 BTU/cubic foot content. The EH#3A well was subsequently shut-in until crews began the final completion of the well, which required the setting of a gravel pack and sand screen system within the wellbore to ensure that integrity of consistent productive capacity is maintained from the well on an ongoing basis.

Mr. Spindler also stated, "The commencement of natural gas sales from the EH#3A well galvanizes Petrogen's critical inflection point in establishing the Company as a successful Texas Gulf Coast operator. Natural gas developments in this area of the Texas Gulf Coast are generally only pursued by the majors and large independents due to the operational requirements and geologic complexities of the region. However, it is also equally pursued by those companies and Petrogen alike due to the fact that it is one of the largest and most prolific natural gas bearing regions in the World."

The commencement of production initially proves out the Company's geologic development model at Emily Hawes Field while providing revenues to assist in funding its ongoing Capex needs going forward. This provides Petrogen with the ability to rely upon the foundation of expertise its management and operations team have developed to expand Petrogen's Texas Gulf Coast operations in the Matagorda Island area as well as in other outlying Gulf Coast areas of interest to the Company.

Petrogen's President of Operations, Mr. Bill Kerrigan stated, "Our operations objectives for the remainder of 2005 include a comprehensive development plan at Emily Hawes Field that proposes the spudding of as many as three additional step out and infill Miocene Sands' new well drilling locations. We look forward to exploiting the potential remaining 12.3 billion cubic feet of previously producing natural gas reserves within the entire areal extent of Emily Hawes Field."

The Emily Hawes Field is located approximately 90 miles southwest of Houston, Texas within the prolific oil and gas producing Miocene-Frio trend of the onshore and offshore Texas Gulf Coast.