Hemi Energy Group Announces Updates On Oil Leases In Woodson County, Kansas

Fort Worth, TX - Hemi Energy Group, Inc. is in the process of increasing daily oil production from the largest number of re-worked wells that we have ever had producing on the leases in Woodson County, Kansas. Water from forty oil wells are currently being pumped into the water injection well to efficiently de-water the leases and an additional ten wells will be added as their re-working is completed. This salt water injection well will allow us to produce the maximum potential from these re-worked oil wells without disrupting oil production because of a water disposal problems. As de-watering is completed, the rate of oil production will be better than our best rate in late 2006 and early 2007 from many of our wells. Based on management's experience, as the leases are de-watered, the oil we are producing now will be able to migrate more effectively as the oil/water contact point is lowered to the optimum oil production efficiency.

Gas re-pressurization has occurred in some geological pay zones on several of Hemi's leases in Woodson County, Kansas which each have a number of shut-in wells. Management discovered, on a recent trip, that producible natural gas was present when shut-in wells while being prepared to use in the de-watering process and has chosen not to produce these valuable gas wells as oil wells, rather choosing to leave these wells shut in. Management is studying the cause of this gas re-pressurization and the best way to produce the shut-in natural gas/crude oil wells.

The potential value of the reserves could be almost two times the value as when the independent reserve report on the five leases that have proven reserves in Woodson County, Kansas was initially completed and before additional pay zones are proved up. The independent reserve report does not include the coal bed methane gas, the newly discovered natural gas and deeper pay zones which are not yet factored into the valuation.

SOURCE: Hemi Energy Group