Gulf Onshore Re-Develops Texas Leases

Gulf Onshore, Inc. has commenced its Re-Work/Development Program on leases in Throckmorton Co. and Shakelford Co., Texas.

Gulf Onshore holds approximately 3,200 acres under lease in these counties, currently covering 96 wells, according to Texas Railroad Commission data. 68 of these wells, most of which previously produced oil, are shut-in for various reasons, mostly mechanical; 28 wells currently produce between 35 and 45 BOPD.

The Company plans workover activities on 51 wells, including several of the producing wells, with a goal of increasing production to 200-250 BOPD. The remaining wells will be revaluated based on information from the field and either reworked or plugged.

Two wells were restored to production last week, but no settled production figures are yet available. Two additional wells were reworked as injection wells for water disposal.

In addition, the Company has identified 121 possible drill sites for future development on these leases.
Preliminary reports indicate proven developed reserves for the 28 producing wells exceed 500,000 BO. Gulf Onshore will update reserve figures as additional wells are brought on-line, and is on-schedule to provide SEC-qualified reserve reports with its 2Q Form 10-QSB.