RIVERTON, Wyo., April 12, 2002 -- U.S. Energy Corp. and Crested Corp., d/b/a USECC, announced that their Rocky Mountain Gas Inc. (RMG) subsidiary is expanding both the Roland and the Anderson coal pilot programs on its Clearmont, Wyoming properties.
The current program includes drilling and completing 6 new wells, placing 4 previously drilled and completed wells on pump and constructing the necessary water and natural gas gathering systems and water containment reservoirs.
As previously announced, 24 wells were drilled and completed on the Clearmont properties last year, which consisted of 8 wells to the 400 foot deep Roland coal, 14 wells to the 900 foot deep Anderson coal and two deep test wells (drilled to 2200 feet and 1543 feet) that encountered significant coal intervals below 900 feet.
Of these wells, 4 Roland and 4 Anderson wells were put on pump, under a temporary water discharge permit, to begin the dewatering process. All 8 wells have experienced good water flows and gas shows during the initial stages of dewatering, which is typical for coalbed methane wells in the Powder River basin. Based on these initial results and the desire to accelerate the dewatering process over a larger area in both coals, the following work programs have commenced:
Six new wells are currently being drilled and completed in the Anderson coal. All 6 wells will be placed on pump. Two additional wells that were previously drilled and completed in the Anderson will also be placed on pump, bringing the total number of wells in the Anderson pilot dewatering program to 12.
Two previously drilled and completed Roland wells will be put on pump, expanding the Roland pilot dewatering program from 4 wells to 6. CCBM, Inc., a wholly owned subsidiary of Carrizo Oil & Gas, Inc. of Houston, Texas is funding these work programs pursuant to the agreement between the parties dated July 10, 2001. RMG is the operator with an average 50% working interest in these wells.
RMG also announced today that it has received a permanent water discharge permit from the Wyoming Department of Environmental Quality that covers 5 water containment reservoirs and 59 well locations (including all wells mentioned above) for the initial development of the Clearmont project.
Peter G. Schoonmaker, President of RMG commented, "With the return of warmer weather, we are excited to be back in the field expanding on what we accomplished last fall. Early results from our Roland and Anderson pilots have been encouraging. We continue to make progress towards our stated goals of securing a gas sales contract in the coming weeks and commencing production later this year. In light of events in the Middle East and the current energy debate in Congress, many elected officials and energy analysts have pointed to coalbed methane production as a means to reduce the nation's dependence on foreign sources for energy."
About U.S. Energy Corp. and Crested Corp.
U.S. Energy and Crested Corp., through their subsidiary RMG, own working interests in over 250,000 gross acres prospective for coalbed methane in the Powder River basin of Wyoming and Montana and adjacent to the Greater Green River Basin in southwest Wyoming.
All properties are subject to a definitive agreement with a division of Carrizo Oil & Gas, Inc. to develop and expand RMG's CBM properties dated July 10, 2001.