Chief Oil & Gas Notes Marcellus Shale Results, Devt Plans for 2010

Chief Oil & Gas has provided a status update of its Marcellus Shale development. Chief's Marcellus leasehold has increased to more than 560,000 acres and leasing continues in selected areas. The Marcellus drilling program continues to expand, to date 39 wells have been drilled: 28 horizontal wells and 11 vertical wells. Currently, 20 horizontal wells are waiting on completion and 7 horizontal wells are being drilled or remain to be drilled in 2009. Chief has four horizontal rigs that are currently under long term-contract, three of which are new fit-for-purpose rigs.

"Since we entered the Marcellus in 2007, we have tested multiple drilling and completion methods and drilled wells in 9 counties in 2 states throughout our acreage gathering valuable knowledge for our drilling and completion program," said Michael Radler, Chief Operating Officer. "We are very pleased with our recent production rates and are seeing excellent EUR's on our horizontal wells. After analyzing our research and results, we have identified at least 3 key areas for development in the Northeast and Southwest. Our current goal is to focus on specific areas, such as Susquehanna County, where we have 15 wells planned in 2010 and will begin testing multi-well completion techniques."

Chief has set a 2010 development budget of $325-350 million depending upon success and natural gas prices and expects to exit 2010 with 7 rigs running. "We have 70 wells planned, primarily horizontal, for 2010," said Radler. "As we ramp up production, we will continue to improve efficiencies and reduce costs while extending lateral length and improving completion rates