Emerald Bay Focuses on Tie-In of Nat. Gas Production in Alberta

Emerald Bay Energy has reported on recent developments in Central Alberta and South Texas.


Tie-in and facilities efforts continue at Gilby, Chigwell, Joffre, and Lacombe, in Alberta. Pipeline land acquisitions and leasing should be complete at Gilby and Chigwell on or about July 17, 2009. Pipeline permits are expected to be issued within approximately two weeks after that, and construction to begin on or about the first week of August. Joffre pipeline construction operations are expected to begin in late August, with Lacombe's operations to follow Joffre in September. Based on initial testing results, after pipeline operations are complete, the Company is estimating to add 60 to 80 boepd to the current production rate of 188 boepd.

Costs of drilling have come down in recent months. The reductions have played a major role influencing management's allocation of resources. As a result, drilling operations will start again in approximately mid-August at Alliance, Alberta (8-25-40-13 W4). The target is Viking oil and gas formation at approximately 850 meters. The Company currently has a 40% working interest in the property, but may reduce its interest prior to drilling.


Phase 1 of the completion operations have been accomplished on the Oscar C 3EB well in Medina County. The well is still recovering frac fluid at the current time with a ratio of 50/50 (frac fluid/oil). After the frac fluid is returned, Phase 2 operations will take place that will perforate the remaining porosity intervals in the Olmos sand. Given the early results obtained, the Company projects to meet its finding and development cost goal of $5,000.00 per producing boe.

During drilling operations at Oscar C 3EB, oil was found in the pits and samples in the Escondido zone, just above the Olmos formation. The Company has filed a drilling application to off-set the 3EB well to drill and test Escondido separately. The drilling is anticipated to begin on or about the week of July 20th, results of which will determine if the Olmos and Escondido wells will be commingled going forward.

"Our current operational focus will be to tie-in our current natural gas production in Alberta. Drilling efforts will focus on oil in South Texas and in-fill shallow gas in Alberta where we have existing infrastructure in place," stated Shelby Beattie, President and CEO.