New Well Development On Western Humboldt-Chanute Oilfield

Graham, TX - Hemi Energy Group, Inc. reported that in 2006 there were 25 newly drilled wells producing oil within approximately a three-mile radius of Hemi's leases in Woodson County, KS. These new wells are on the same 150-thousand-acre Humboldt-Chanute oilfield geological structure as Hemi's five leases, totaling over 3 square miles. These new wells have flushed-in at 40-100 bbls a day. All of these new wells have been drilled on mature oilfields that currently have re-worked and/or producing old wells on the leases. A major reason why as much as 75% of the oil reserves has remained un-produced in these mature fields is due to the fact that these wells were drilled using less advanced technologies than those available today. This Humboldt-Chanute oilfield with a shallow sandstone (squirrel) and dolomite formation (Mississippian) in southeast Kansas, presents itself as probably one of the best candidates for secondary oil recovery, using pressure water flooding or enhanced oil recovery production (EOR), in all of the domestic United States. The value of the Hemi Energy leases are benefiting from the increasing trend of new producing wells and prove-up of oil reserves near the company's leased area in Woodson County. Partly based on this information, Hemi Energy will start developing the proven oil fields in their Kansas leases by drilling new wells in the spring of 2007.

Hemi has now established a base-line of oil production from the re-worked wells in Woodson County, Kansas, which comprise approximately 30 percent of the total wells located in the leased area. For the month of November, the company completed four shipments of 180 bbl each. Cash flow from oil production will, therefore, be more than sufficient to allow the company to complete the re-working of all its remaining wells in 2007.

SOURCE: Hemi Energy Group, Inc.