Quantum Energy Puts Barnett Shale Horizontal Well on Production

Quantum Energy reports that its Inglish #1H, the first horizontal well drilled in the Barnett Shale, commenced production on September 1, 2006. Quantum has a 5% working interest in the well. It was drilled to a depth of approximately 11,000 feet and was completed and successfully fraced.

During the first 3 days of production, the well produced 724 barrels of oil and 1,526 MCF of natural gas. At this time, approximately one half of the frac water had been recovered. Maximum potential on the Inglish #1H well will not be reached until at least 70% of the treatment water has been recovered.

Quantum President, Ted Kozub stated that, "The horizontal well program is without question the most successful and now proven drilling tactic. This success signals an opportunity for Quantum to participate to a much larger extent in future horizontal wells in the Barnett Shale. Plans are in place to drill 3 more horizontal wells this year. Quantum intends to take larger working interest positions in each well."

The Inglish #1H is producing at an excellent rate in relation to the remaining treatment H2O in the well. We have just now recovered 50% of the treatment H2O with sustained production. This is a result of setting the 2 3/8 production tubing @ 7550' instead of down in the producing interval @ 8100'. This causes the oil & gas to break through the H2O and move up to the production tubing. We still produce H2O, but at a slower rate. When the H2O production falls off, we will lower the tubing.

If we had started with the tubing down lower, we would still be swabbing the well or would have to set pumping equipment. Most horizontal Barnett wells have to be de-watered to sustain maximum production potential. We don't expect the Inglish #1H to reach its maximum potential until we have recovered at least 70% of our treatment H2O.