American Noble Gas Provides Update on Completion of Initial Well

Source: 6/14/2022, Location: North America

American Noble Gas, Inc. ("AMGAS" or the "Company") is happy to provide an update on its drilling and completion operations in the Hugoton Field in Haskell and Finney Counties, Kansas, as part of its previously announced farm-out agreement (the "Hugoton Farm-out Venture"). The first well was successfully drilled and logged, indicating the potential discovery of significant new reserves within the Hugoton Gas Production, which the Company thinks might revitalise the Hugoton Gas Field, which is North America's largest conventional onshore natural gas and helium field.

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.

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