Antares to Participate in Yellow Rose Seismic Project

Antares Energy said that it has executed an agreement to participate on a ground floor basis in the acquisition of a large 61 square mile (approximately 39,000 acres) 3D seismic survey in South Texas. The project is called Yellow Rose and is near the Shaeffer Ranch project.

Under the agreement, Antares will have 50% of the project, which will be operated by San Isidro Development Co., L.C. (“San Isidro Development”). San Isidro holds the other 50% of the project. San Isidro Development is also Antares’ 50% partner and operator of the Shaeffer Ranch project. The Yellow Rose area is along a regionally well-defined and productive hydrocarbon fairway, which has not previously had 3D seismic acquired over it.

San Isidro Development is currently negotiating an 18-month, exclusive, fixed-cost option over a large portion of the land covered by the survey. Leases for the remaining key tracts of land are also being negotiated.

The seismic acquisition is tentatively scheduled to begin on or about March 1, 2007, after the hunting season is over.

The Yellow Rose area that will be shot by the 3D survey is part of a widespread regional trend that includes several producing fields. The 3D seismic will be applied to several already identified leads along the trend to see if they can be matured into drillable prospects. It is expected that it will take approximately 2 months to acquire the data and another 2 months to have it processed. Initial costs up to the point of drilling the first well are estimated to be approximately US$2.2 million net to Antares, depending on the finalization of the land costs.

Antares will be responsible for the technical aspects of the acquisition, processing and interpretation of the seismic and will fund the internal geological and geophysical manpower costs required through to drilling the first well. Once the seismic is interpreted and prospects developed, both parties will have the ability to farmout specific prospects for drilling if they choose to reduce their working interest from 50%.

The combination of easily mappable structures, nearby fields, no prior 3D seismic, and a large land position all point to a unique and highly attractive exploration opportunity in a prolific fairway. Certain details of this project such as the precise location cannot be disclosed at this time due to the competitive and sensitive nature of the ongoing land acquisition

San Isidro Development is a privately held Texas oil and gas exploration and production company based in Sandia, Texas. It is actively engaged in the development of oil and gas reserves through the utilization of the latest advancements in 3-D seismic data acquisition, processing, and reprocessing. The company employs this exploration strategy in the proven trends of South Texas in order to exploit remaining, deeper pool or previously overlooked hydrocarbons. This is a complementary relationship where Antares Energy advises the operator on geotechnical evaluations while San Isidro Development handles land, legal, and drilling using its extensive network of contacts and experience in South Texas.

“We are very pleased to be engaging in another exciting opportunity with San Isidro Development,” said Howard McLaughlin, Antares’ managing director. “Yellow Rose is similar in many ways to the nearby Shaeffer Ranch project as it is another very large tract of relatively unexplored land on a prospective trend that we can enhance with 3D seismic. The optioning and leasing of large tracts of prospective land at a predetermined price and royalty distinguishes this opportunity from what is traditionally available in South Texas. This project fits well into Antares’ portfolio and is consistent with our strategy of pursuing onshore south Texas gas prospects with greater than 5-10 BCF net reserve impact and sufficient acreage to expand and grow in the success case. We are very confident this project will lead to the drilling of a number of high-value wells.”