American Noble Gas Provides Update on Completion of Initial Well to Produce Natural Gas and Helium in the Hugoton Field

Rhea-AI Summary

American Noble Gas (OTC-QB: IFNY) announced successful perforation of an initial well in the Hugoton Gas Field, Kansas, indicating significant potential reserves of natural gas and helium. The well, drilled as part of the Hugoton Farm-out Venture, is 40% owned by AMGAS and was spud on May 7, 2022. Completion is expected to begin around June 20, 2022, with results on flow rates and gas composition anticipated in early July. The venture aims to revitalize the Hugoton Field, which may still have substantial resources despite previous perceptions of depletion.

Positive

• Successful perforation of initial well indicating substantial gas and helium reserves.
• The well's completion could reinvigorate the Hugoton Gas Field, the largest conventional onshore natural gas and helium field in North America.
• The project potentially addresses the global helium shortage.

Negative

• None.

Target Zones in the Initial Well have been Successfully Perforated with Final Completion to Begin on or about June 20, 2022. The New Well Establishes the Potential Existence of Significant Natural Gas and Helium Reserves Inside the Hugoton Gas Field in Haskell and Finney Counties, Kansas.

Lenexa, KS, June 14, 2022 (GLOBE NEWSWIRE) -- American Noble Gas, Inc. (OTC-QB: IFNY) (“AMGAS” or the “Company”) is pleased to provide an update on its drilling and completion operations regarding AMGAS’s participation in its previously announced farm-out agreement (the “Hugoton Farm-out Venture”) to develop its oil and gas and brine interests in the Hugoton Field in Haskell and Finney Counties Kansas. The initial well was successfully drilled and logged indicating the potential discovery of substantial new reserves within the Hugoton Gas Field which the Company believes could reinvigorate the Hugoton Gas Field, the largest conventional onshore natural gas and helium field in North America.

The initial well in which AMGAS has acquired a 40% participation together with three other venture partners was spud on May 7, 2022 with production casing set after testing and completion logs identified at least two potential zones with substantial gas and helium reserves. One of the zones of particular interest revealed a gas show across it. This particular zone was below previous completion attempts in a neighboring well and the completion logs of the zone revealed indications of permeability. The other zone that was previously completed in a neighboring well appeared to release gas while drilling indicating that gas reserve potential exists. 

The initial well was successfully perforated last week across two lower intervals of the Chase group of formations. The fracture stimulation has been designed to include at least two stages, the first of which will commence on or about June 20, 2022. This stimulation will consist of sand and nitrogen-based foam across the existing perforated intervals. The second stage will be performed across an upper interval to be perforated shortly after the first frac stage.

The Company expects data on flow rates and gas composition the first week of July. Electricity and pipeline infrastructure are currently being prepared to connect the new well to produce the potential methane and helium gases and for disposal of produced water. AMGAS and its Venture partners intend to complete the well as expeditiously as possible subject to potential adverse weather conditions and the availability of raw materials and oil and gas service companies. The Company will continue to apprise investors as additional information becomes available.

Management commentary:

Stanton E. Ross, Chairman and Chief Executive Officer of AMGAS remarked that “the Hugoton Farm-out Venture’s drilling program has started off very well with the planned completion of its initial well. We believe that our completion logs and tests have revealed the potential for large in-place reserves of natural gas and helium in our targeted zones. The Hugoton Gas Field has previously been considered a depleted conventional gas field but our exploratory well results may serve to reinvigorate the entire Hugoton Gas Field. The Hugoton Farm-Out Venture sees the logic of its unconventional theories and the potential impact it may have, in particular the helium reserves that the field may still contain”, added Stan Ross. He further stated, "The Hugoton Farm-Out Venture has the contractual rights to explore and develop natural gas, helium and other noble gases as well as brine minerals contained inside the Hugoton Gas Field in Haskell and Finney Counties, Kansas.

The Company’s newly appointed advisory board and our service agreement with US Noble Gas, pairs us with specialists who are providing invaluable help to the Hugoton Gas Field Venture for developing its reserves of helium and brine minerals. “The world is currently facing a well-publicized shortage of helium and the world needs helium”, added Mr. Ross, “The Hugoton Gas Field Venture may have just discovered new gas and helium reserves contained inside the Hugoton Gas Field in Haskell and Finney Counties, Kansas that may help alleviate the shortage of those gases, further we remain keenly interested in the brine mineral potential." concluded Mr. Ross.

About the Hugoton Gas Field:

The Hugoton Gas Field is a prolific natural gas and helium gas field located in the States of Kansas, Oklahoma, and Texas. Its name is derived from the town of Hugoton Kansas near which the Hugoton Field was first discovered. Natural gas in the Hugoton gas field was first discovered in 1919 near Liberal, Kansas at a depth of 2,919 feet below surface but was shut-in for three years because it did not find oil. In 1922 the well was completed as a gas well, but there was little demand for natural gas in the area and it was years before another gas well was drilled in the field.

In 1927, gas was discovered at about 2,600 feet below the surface southwest of Hugoton, Kansas which is now considered the center of the Hugoton Field. By the end of 1928, five wells had been drilled in the field and the first pipeline was transporting gas to local markets.

In 2007, the Hugoton gas area produced 358 billion cubic feet of gas, making it the 5th largest source of natural gas in the United States. The Hugoton currently (2022) ranks second in cumulative natural gas production and eighth in estimated total reserves globally.

The natural gas in the Hugoton field of Kansas and Oklahoma, plus the Panhandle Field of Texas, contains unusually high concentrations of helium, from 0.3% to 1.9%. Because of the large-size of these fields, it is recognized to contain the largest reserves of helium in the United States. Helium is separated out as a byproduct from natural gas, from the Hugoton field, the Panhandle field in Texas, the Greenwood field in Kansas, and the Keyes field in Oklahoma.

About American Noble Gas, Inc.:

AMGAS has recently acquired current oil & gas production and the mineral rights to approximately 11,000 acres in the Otis/Albert Field located on the Kansas Central Uplift. Prior to the recent acquisition, AMGAS had been involved in oil and gas exploration, development and production of natural gas and oil in Texas and the Rocky Mountain region of the United States as well as an oil field service company located in Eastern Kansas, Northern Oklahoma, Colorado and Wyoming prior to December 2012. AMGAS was founded in 1987, is headquartered in Lenexa, Kansas and its common stock is listed on the OTC-QB under the symbol "IFNY". The Company's financial statements and additional information are available on the Internet at www.otcmarkets.com.

Forward-Looking Statement:

This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe", "estimate", "project", "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Forward-looking statements in this press release include the following: whether the Company will be successful in exploring for noble gases including developing commercially efficient production of its noble gas reserves, developing the oil & gas reserves of the Oil & Gas Properties; whether the TORP Agreement will provide the desired beneficial engineering and development data to increase production of oil & gas from the Oil & Gas Properties, whether the Company will be successful in workover/stimulation activities of existing producing oil & gas wells that result in increased production of the Properties; whether the Company will be able to execute its exploration and development plans for the Properties, including obtaining the required financing; whether the required financing for the exploration & development of the Properties can be obtained on terms favorable to the Company and its shareholders; the quantity of hydrocarbons beneath the Properties and whether they can be economically extracted; the accuracy of the consultants' preliminary analysis and estimate of the recoverable oil & gas reserves (including noble gas reserves) on the Properties and their underlying assumptions; whether or to what extent the relevant geological zone contains hydrocarbons and/or noble gas; the inability to predict, in advance of drilling and testing, whether any particular prospect will yield oil in sufficient quantities to recover drilling and/or completion costs or to be economically viable; the fact that the process of estimating the quantity of oil in a prospect is complex, requiring the interpretation of available technical data and many assumptions; the potential for significant inaccuracies in such interpretations and assumptions that could materially affect the Company's estimates or those of its consultants; the necessity for estimates to be based upon available geological, geophysical and engineering data that can vary in quality and reliability; the inherent lack of precision in estimates involving the quantity of oil and noble gases in the development project in Kansas as a result of the foregoing; whether the Company will be successful in exploring for the existence of mineral reserves other than oil & gas in commercial quantities including the development of the underlying reserves of such reserves and its ability to find a qualified partner, if necessary, with whom to pursue its exploration and development program on terms and conditions acceptable to the Company; the Company's ability to extract oil and gas from the Properties and the costs and technical and other challenges of extracting oil from the Properties; variations in the prices of oil and gas, unexpected negative geological variances, governmental uncertainties in Kansas; operating risks, delays and problems, the availability of services on acceptable terms, the results of drilling and completions; changes United States regulation respecting oil and gas; and actions by creditors with respect to debt or other financial obligations of the Company; and its ability to resolve its liquidity and capital requirements. Additional information respecting factors that could materially affect the Company and its operations are contained in its annual report on Form 10-K for the year ended December 31, 2021 and its Form 10-Q for the three months ended March 31, 2022 as filed with the Securities and Exchange Commission.

For Additional Information, Please Contact:

Stanton E. Ross, CEO, at 816-955-0532

FAQ

What is the status of American Noble Gas's drilling operations in the Hugoton Gas Field as of June 2022?

American Noble Gas successfully perforated its initial well in the Hugoton Gas Field, signaling substantial potential reserves.

What is the expected timeline for the completion of the well by American Noble Gas?

Completion of the well is planned to begin around June 20, 2022.

What percentage of the Hugoton Farm-out Venture does American Noble Gas own?

American Noble Gas owns a 40% share in the Hugoton Farm-out Venture.

When can updates on flow rates and gas composition from the new well be expected?

Data on flow rates and gas composition is expected in the first week of July 2022.

What are the implications of the drilling results for American Noble Gas investors?

The drilling results suggest a potential revival of the Hugoton Gas Field, which could positively impact the company's valuation.