Superior Oil & Gas Completes Two Wells in Medicine Hat

Superior Oil and Gas Co. says that two of the wells located on the Lands of Interest in the Medicine Hat in Canada field that have been drilled, cased and completed. The company earlier announced on April 25, 2006, its agreement to purchase a 100% working interest in a 7-section block of lands in the Medicine Hat Natural Gas Field in southeastern Alberta, Canada. Included in the purchase are two Medicine Hat natural gas wells already drilled, cased and completed and awaiting hookup to a two-mile pipeline to be built in the immediate future. The 7-section property covers drill sites for an additional 26 wells that can be drilled into this blanket sand that produces in the area. Superior plans to drill five additional wells in the next 60 to 90 days to validate the leases on the undrilled five sections, said Daniel Lloyd, president of Superior. Over 1,000 natural gas wells have been drilled in the several hundred sections of land that comprise the Medicine Hat Field.

The two wells awaiting hookup to a pipeline were each perforated and a single frac treatment was done on two Medicine Hat zones. A Bottom Hole Static Gradient Pressure Survey recorded a pressure of 490 PSIA after a shut-in of 198 hours. The original shut-in field pressure for the Medicine Hat Zone is recorded at approximately 600 PSIA.

"Based upon production rates from the nearest Medicine Hat wells (one mile to one-and-a-half miles away), the logs of such wells -- which are similar to Superior's two wells awaiting hookup -- indicate that Superior's two wells can be expected to initially produce at rates in the range of 350 to 500 Mcf a day. The $7.50 average natural gas prices that currently prevail in the Medicine Hat Field would initially produce income of approximately $200,000 a month from the two wells," Lloyd said.

Cumulative production from the Medicine Hat "A" Sand has been recorded from wells in this extensive field as high as 4.0 billion cubic feet a well over a period of 30 years. The average production volumes for these wells are in the range of 1 to 2 billion cubic feet, Lloyd added.