Aspen Takes Stake in Montana Oil Production, Large Acreage Position

Aspen Exploration Corp., with offices in Denver and Bakersfield, Calif., has acquired a 10% (12.5% working interest before payout of 110% of Aspen's investment) non-operated working interest in the East Poplar Unit and Northwest Poplar Field in Roosevelt County, Montana, which is operated by Nautilus Technical Group, LLC of Denver, CO.

These fields underlie approximately 22,600 net acres that have 3-D seismic data coverage. The current production rate is 230 BOPD from 38 producing wells completed in the Heath and the Charles "A," "B," and "C" intervals. The average net revenue interest is greater than 80%. The crude oil is 40° API sweet and is readily marketed at the lease boundary. All produced water is disposed within the Unit boundary. Nautilus engineers have estimated net remaining proved developed reserves of 1.6 million barrels of oil and total proved remaining reserves of 4.9 million barrels of crude oil. They have also estimated future net cash flow of $27.8 million for proved producing reserves and $135.3 million for total proved reserves based on a $50 per barrel NYMEX price. These forecasts of reserves and estimated cash flow pertain to 100% of the working interests acquired by Nautilus, including the portion acquired by Aspen.

Nautilus proposes to increase oil production and recoverable reserves from the field by:

1.  Completing 2 permitted water injection wells and placing 5 currently
    shut-in wells back on production.
2.  Increasing production rates in existing producing wells.
3.  Enhancing the water disposal facilities in the Field.
4.  Recompleting behind pipe zones in existing wells.
5.  Interpreting a 3D seismic survey over the 22,600 acres to determine the
    optimal placement for infill drilling locations and potential locations
    for tests in other reservoirs.

Work on the field enhancement will begin in March 2007, and Nautilus' ability to achieve its goals is subject to risks normally associated with oil producing activities.

Aspen's participation in this acquisition will provide Aspen with diversification into long-lived oil reserves exhibiting a low decline rate, a potential decrease in D, D, & A expense, and a potential increase in Aspen's net proved reserves by about 50%. This projected potential reserve increase is based on Aspen's internal reserve estimates after a review of the information provided by Nautilus' engineers. The initial cost to Aspen for its 12.5% before payout working interest (including its share of the acquisition costs) will be approximately $1,500,000, with an additional $400,000 of anticipated capital expenditures during the first year. Aspen funded its participation in this project with a combination of bank debt ($600,000), cash on hand, and the sale of approximately 100,000 shares of UR Energy stock, which yielded about $330,000.

The effective date of the acquisition was January 1, 2007 and the closing date was February 13, 2007.