Exploration Highlights

?1 Dallas-based Midroc Operating Co. scheduled a wildcat in the southeastern portion of Conecuh County, about 11 miles southwest of Red Level, Ala. The #27-7 Lewis Estate, in Section 27-4n-13e, has a proposed total depth of 12,500 ft.?Midroc’s Little Cedar Creek Field opened in 1994 and has produced 5.5 million bbl. of oil, 4.79 billion cu. ft. of casinghead gas and 27,682 bbl. of water from Smackover.

2 GeoMet Inc., based in Houston,?holds approximately 80,000 gross acres in its Garden City shale-gas prospect in Blount and Cullman counties, Ala. The target is Chattanooga shale, which?ranges in thickness from 35 to 75 ft. at depths from 1,600 to 2,100 ft. on its leasehold.?In 2007, the company drilled five core holes to determine in-place gas and three production wells. In Blount County,?#30-03-02 Wittmeier, Section 30-12s-1e, was tested?at an initial daily rate of 56,600 cu. ft. of gas and 10.3 bbl. of water per day from an openhole interval between 1,970-2,214 ft., and #1 Wittmeier 19-15, in Section 19-12s-1e, tested at 74,600 cu. ft. and 10 bbl. of water per day from an openhole interval between 1,924-2,060 ft. In Cullman County,?#06-07-04 Montgomery, Section 6-12s-3w,?tested 120,000 cu. ft. of gas and 166 bbl. of water per day from an openhole interval between 1,771-1,998 ft., according to IHS Inc.?This year the company?has?a five-well program, including three horizontal tests.?

3 Antares Exploration Fund LP has received a drilling permit for a 5,665-ft. wildcat in a nonproducing partial township nearly five miles north-northeast of Alpena in northeastern Michigan, about two miles west of Lake Huron.?The #1-19 Anderson, in Section 19-32n-9e, Alpena Township, northeastern Alpena County, will be drilled into Cambrian Trempealeau for evaluation of shallower Ordovician Prairie du Chien gas zones. The #1-19 Anderson is four miles north of the isolated, noncommercial Alpena Section 12-21n-8e Field discovery that has produced gas and condensate from Burnt Bluff (Clinton) and Prairie du Chien. Antares Exploration’s headquarters are in Houston.

4 Atlas America Inc. drilled or participated in four successful horizontal wells in the Chattanooga shale of eastern Tennessee. Initial results indicate that horizontal Chattanooga shale wells can be drilled and completed for approximately $1.1 million and are capable of stabilized production into a pipeline of 300,000 to 500,000 cu. ft. of gas equivalent daily. Atlas has accumulated 117,000 net acres in eastern Tennessee and believes its acreage contains up to 500 potential horizontal drilling locations in the Chattanooga shale. Most of this acreage is also prospective in conventional reservoirs such as Monteagle (Big Lime), Fort Payne limestone, Stones River and Knox Group, for which Atlas believes it has up to 750 locations. Atlas America is based in?Moon Township, Pa.

5 Pittsburgh-based Equitable Resources Inc. reports it has had encouraging drilling results from several of its emerging Appalachian Basin plays, which could result in important additions to reserve estimates. The company drilled eight wells in the Berea sandstone this year, five of which are producing. The two most recent on-line wells are expected to yield daily flow rates of approximately 1.5 million cu. ft. of gas equivalent. Between 25 and 30 Berea wells are slated in 2008. Equitable estimates it could have as many as 3,800 additional Berea drilling locations. Additionally, it plans to drill 11 horizontal wells in other non-shale formations including Ravencliff, Big Lime and Weir. Equitable has also drilled 53 horizontal wells that are reentries of low-pressure vertical Devonian shale wells. The program will determine whether production and reserves can be increased via horizontal drilling technology. The company has 4,700 potential reentry locations. Finally, Equitable has more than 400,000 acres in the high-pressure Marcellus and plans to drill 75 tests in this play by the end of 2009. During the first half of 2008, the company drilled 324 wells.

6 Exco Resources Inc., headquartered in Dallas, drilled and completed 45 gross (41.4 net) wells in the Appalachian Basin during the second quarter, and 44 of the 45 are producers. Exco plans to drill 229 gross wells in 2008 to targets that include Clinton/Medina sandstone, stacked Devonian sandstones, Devonian shales, and Berea. It currently has nine rigs drilling in the region and holds nearly 1.1 million net leasehold acres. Of its 395,000 acres with potential for Marcellus, some 276,000 acres are in the core, overpressured area of the play, and approximately 70% of its acreage is held by shallow production. Exco has signed long-term contracts with a drilling rig contractor to provide top-drive rigs in early 2009. About 121,000 acres of its holdings also have Huron shale potential.

7 Fort Worth-based?Range Resources Corp. continues its delineation drilling and leasing efforts in the Marcellus shale play, having accumulated 1.15 million net acres; 850,000 acres have been high-graded for further evaluation. In 2009 the company plans to operate eight rigs. Range has drilled and completed 22 of 25 horizontal shale wells, and the initial production rates of seven wells have averaged 4.9 million cu. ft. of gas equivalent per day. Range estimates that the gross average reserves per horizontal well are about 3- to 4 billion cu. ft. Results have been so strong that it has raised its estimate of unrisked reserve potential on its leases to 15- to 22 trillion cu. ft.

8 Atlas America Inc., Moon Township, Pa., has drilled 78 vertical wells and one horizontal Marcellus shale well to date, and currently is producing gas from 69 Marcellus wells. Nine wells are awaiting completion. The company controls approximately 552,000 Marcellus acres in Pennsylvania, New York and West Virginia, of which approximately 269,000 acres are located in its current focus area of southwestern Pennsylvania. Atlas’ average peak-production rates are 1 million cu. ft. of gas per day, and some wells reach 3 million cu. ft. daily.

9 Cabot Oil & Gas Corp. drilled 37 coalbed-methane (CBM) wells on 60-acre spacing and eight infill wells on 30-acre spacing in the second quarter of 2008 in Virginia’s Nora Field. In addition, the company drilled 17 tight-gas-sand wells in the field during the quarter, achieving higher than expected initial production results. The Nora area is one of the largest CBM accumulations in the Appalachian Basin and has more than 1,800 producing wells and more than 2,400 remaining locations on 60-acre spacing. With downspacing of CBM and tight-gas wells, the number of remaining locations could exceed 6,000, excluding shale development. Cabot is based in Houston.

10 Gulf Onshore Inc., Dallas, has formed a Pennsylvania operating company to explore business opportunities in the Marcellus shale. The new unit, Shale Gas Operating Ltd., will seek authority from the Pennsylvania Department of Environmental Protection, Bureau of Oil and Gas Management, to operate oil and gas wells in the state.?Gulf Onshore recently began preliminary talks with agents of two property owners that hold a combined 3,200 acres in northern Pennsylvania to create a drilling program.