Index Spuds Supple Jack Creek Well

Index Oil and Gas says that initial drilling has begun on the HNH Gas Unit No. 1 well in the Supple Jack Creek Prospect in Lavaca County, Texas. The spud took place on November 28, 2007.

HNH Gas Unit (formerly referred to as West 1) is part of the Company's planned higher impact drilling portfolio described in its Operations Summary and Outlook released on June 11, 2007. Index has a 26.6667% working interest in the well during drilling and completion and a 20% working interest in the project thereafter (approximately 14.02% net revenue interest).

HNH Gas Unit No. 1 is expected to take approximately one month to drill to a planned total depth of around 15,000 feet. The well targets the Edwards Limestone Formation. The gas unit designated for the well covers 566.59 acres. However, the contract Area of Mutual Interest (AMI) for the prospect extends over a much larger domain, approximately 5,000 gross and net acres of which are currently under lease. Index holds a 20% working interest in this acreage. If the well is successful, a number of follow-on wells are anticipated.

Successful Edwards Limestone wells in adjacent fields in Lavaca County have achieved reserves in the neighborhood of 4 BCF, whilst that is not necessarily indicative of what can be expected in the exploratory HNH Gas Unit No. 1 well.

Lyndon West, CEO of Index, stated, "The spud of the first well in the Supple Jack Creek prospect has exciting potential for Index. We have a meaningful position in this project and success in HNH Gas Unit 1 could lead to a significant number of follow-on locations commensurate with the land position. This continues our strategy of participating in projects that could significantly impact our reserves and production base."