"An event like this is unfortunate, it is the first set-back incurred on Victory's Canyon Sandstone natural gas project. To the Corporation, investors, and our shareholders, our loss is time. As we operate under a turnkey contract, all expenses for drilling, fishing, and plugging this well are born by the drilling contractor. A new location has been prepared to move the drilling rig onto as soon as the crew finalizes plugging. This delay will not have a long-term effect and is minor in our overall strategic plan," stated Jon Fullenkamp, President of Victory Energy Corporation.

Victory Energy Corporation says that the drilling rig on well #166-12 is moving onto another location, as the drilling contractor was unable to recover the surface casing lodged in this well located in the Corporation's Canyon Sandstone gas play in the Texas Permian Basin.

The drilling contractor had engaged a fishing crew to recover surface casing lost in the hole earlier this week. After several attempts to retrieve the casing, the decision was made to plug and abandon this hole. This decision was based upon time and economics as it takes less time to plug and abandon the hole and drill a new well, than continue with recovery efforts.

Wells #166-8 and #166-3 continue to be on schedule. A work-over rig has been moved onto wells #166-8 and #166-3 to run tubing in each well, allowing for production of natural gas from the Canyon Sandstone gas zone. Once tubing has been hung in each well, the work-over rig will begin swabbing to assist in the recovery of the stimulation fluid pumped into each well.

Each Canyon Sandstone gas well in this field will produce approximately 500,000,000 cubic feet of gas for Victory over a 35-year average production life. A 5,000-foot deep Canyon Sandstone well initially tests at an average of 250,000 cubic feet of gas per day.

Tags: Victory Energy Corporation