Aspen Exploration Increases Gas Position Near Sacramento

Denver-based Aspen Exploration Corp. said Tuesday that it has acquired two contiguous gas properties located in Colusa County, CA, approximately 100 miles northeast of Sacramento.

Aspen and its partners acquired a 100% working interest in approximately 2,000 acres, which includes nine shut-in gas wells with immediate production potential for high BTU natural gas. In addition, the consortium also picked up an 81.25% working interest in a 160 acre tract containing one well in the same area.

Aspen said all of the shut-in gas wells have now been tested; nine of them have proven productive and one tested gas at sub-commercial rates and was plugged and abandoned. The nine productive wells have been equipped and hooked up via five miles of newly constructed pipeline facilities.

The company added that gas sales from these wells commenced in late March and are currently tallying 1,100 Mcf/d. In addition, several of the wells have additional gas potential in behind-pipe zones, which have not yet been perforated, Aspen said.

The acreage acquired is in addition to more than 3,000 acres that Aspen and its partners had leased previously and includes highly prospective lands for additional exploratory and development drilling. Prior to selection of the drill sites, Aspen said an extensive 3-D seismic program will be done in October-November, with quality targets prepared for the 2004 drilling season.

Aspen said it also has another 3-D seismic program and several exploration and development wells planned for the upcoming drilling season in other areas of the Sacramento Valley. The company said it "is striving to continue the drilling success it has experienced during the last two years; nine gas wells out of nine attempts."

Aspen also noted that none of its production is currently hedged in a market that is currently seesawing above the $5 mark, allowing the company to participate in current high gas prices as well as participation in expected favorable prices in coming months. With the latest acquisition, Aspen said it is now the operator of more than 30 gas wells, in addition to owning non-operating interests in an additional 15 gas wells. The company currently markets its gas to Calpine, Tosco and Enserco.

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