Madison Energy Initiates Bakken-Torquay Drilling, Snaps Up Alberta Assets

Madison Energy reported that operations have been commenced in the drilling of a Bakken-Torquay well in southeast Saskatchewan. Madison will have a 45% working interest in the well before payout and a 35% working interest after payout in the well. The well will have a true vertical depth of 1000 meters with a planned horizontal leg of 600 meters and will be completed using horizontal multi frac technology.

The Antler/ Sinclair Bakken Torquay field produces 42-44 API crude oil which typically sells at a premium to Edmonton Light prices. There are currently over 500 vertical wells producing in the pool of which the majority has been drilled in the past five years and over 60 Horizontal wells licensed or producing in the pool drilled in the past two years.

Madison Energy also has closed a purchase of producing assets in Garrington, Alberta, effective November 1, 2008. The assets consist of varying working interests in wells that Madison is currently the operator of and consists of long term reserves that Madison is comfortable with. The purchase price was $540,000 and the assets consist of approximately 14 Boe/day year-to-date average 50% gas and 50% light oil and gas liquids. The property had average monthly cash flow for 2008 of $23,000 per month.