On August 13, 2009, Entek Energy announced execution of a US $12.5 million farm-in agreement, to acquire up to a 55 percent stake in New Frontier's interests in their assets in Northern Colorado and Southern Wyoming, including the Slater Dome Gas Field (a producing coal bed methane field) and other undeveloped oil and gas reserves (Focus Ranch Unit) within approximately 66,000 leased acres of highly prospective acreage.

Entek has moved quickly to commence operations, and has already completed four workovers on the Slater Dome Field. These wells were previously off-line and are now back on line, and will contribute to immediate production and revenue stream.

Additionally, Entek has tested one zone of the Focus Ranch Unit 12-1 well that was previously inadequately tested. The result of additional perforations and propellent stimulation has resulted in a flow rate double than expected.

FOCUS RANCH UNIT Operations commenced on Focus Ranch well 12-1 on the August 17, 2009. Perforations were shot over a 30 foot interval of the Upper Niobrara section, in conjunction with propellent stimulation over the new perforations and existing perforations. The well was initially swabbed before it began to flow unaided. The well has continued to clean up, with the oil rate continuing to increase. Final flow rate immediately prior to shut-in was:

Gas Rate approximately 1.7 MMCFD Oil Rate approximately 90 barrels of oil per day Flowing wellhead pressure 550 - 600 psi This test of the Upper Niobrara is in addition to two lower zones that were tested in September 2006:

The Lower Niobrara produced on initial test at 800 MCFD, with 160 barrels of oil per day. The deepest zone, the Frontier Sand, produced on test at 1.2 MMCFD with 100 barrels of oil per day. Assuming a long term combined gas rate of 1.5 MMCFD and a liquid rate of 100 barrels of oil per day, this well alone will generate gross revenue in excess of US $3 million per year, even when conservatively assuming the current depressed gas price. The nearby Focus Ranch 3-1 well is also awaiting testing and electric logs suggest it may have the capacity to produce at similar rates to the Focus Ranch 12-1 well.

Commenting on the initial results, ENTEK CEO Russell Brimage said, "This outcome is further evidence that the Focus Ranch Unit has the potential to become a very significant producer of oil and gas. Wells producing from equivalent formations in other nearby fields are still producing economically after 10 years, with fields still on production after 30 years."

"Further drilling of the Focus Ranch Unit has the potential to prove up significant reserves given our preliminary estimates of the large areal extent of the field.

"And with infrastructure in place, new wells can be tied into production within months of completion. Further, additional wells will not add significantly to the existing operating costs."

Tags: Entek Energy Limited