Hemi Energy Gets Critical Equipment to Expedite Development

GRAHAM, Texas - Hemi Energy Group, Inc. has purchased and has taken delivery of a Pulstar P20000, a heavy duty truck rigged out for pulling/workover of oil and gas wells, from Pulstar Manufacturing of Dodge, Nebraska. Hemi’s experienced rig foreman has also already been trained on site for this unit at the manufacturing facility. Having our own unit will allow us to expedite completion of Hemi’s new and reworked oil wells.

President and CEO Keith A. Anderson stated, “Southeastern Kansas has a critical well service equipment shortage due to the greatly increased volume of drilling in the area. As with many other oil and gas operations, Hemi was confronted with unacceptable wait times for equipment in order to complete necessary reworking of wells. This equipment availability issue had begun to affect not only our completion of mature wells but also new well drilling schedules. It became clear equipment availability was going to become an ongoing issue, therefore Hemi chose to do this service work in house. When the unit is not in use by Hemi, it will allow us to contract out the unit to other oil and gas operations in southeastern Kansas. This contract work will allow a secondary revenue stream to Hemi Energy Group. We have crewed and tooled the pulling/workover unit, which is presently on the lease, completing our first new well in Woodson County, Kansas. Upon completion of the new well this week, we will be announcing the rate of bbls of oil per day. Hemi will be acquiring additional leases which have mature oil wells, based on its library of extensive geological information in Kansas, and this critical piece of equipment will allow expedient reworking of these mature wells"

Hemi Energy Group, Inc.’s first new oil well on our Woodson County leases confirms our information of this lease’s geological formation reserves and also information from the reserve report about blanket formations. It will take nearly a week to complete all the necessary steps to fully bring this well online in order to determine the bbls per day of output. The well flushed in with good oil thru the drill stem, confirming this as a good well, even before the steps which will be been taken to enhance the online production of bbls per day. Hemi has extensive oil well experience using carefully chosen completion techniques which increases oil production. The main oil zone we are producing from is very good and is 11 feet wide based on open hole well logging and other methods. We are evaluating geological information gathered from this drilling, by using several methods, that will allow us to more efficiently develop geological reserves from future oil wells on these six leases.

Hemi will drill a second oil well in March, 2007 on the same lease because of the success of the first well and also based on new geological information derived from the this well. Hemi’s developmental new well drilling program will drill multiple new wells per month throughout the second quarter on the Woodson County, Kansas leases. As we get into warmer spring weather, we will have access to some of the better locations on each lease. Based on our experience of previously reworked wells on these leases, we will be selecting sites for drilling new wells.

Hemi Energy Group is an independent crude oil and natural gas producer employing a unique business model capitalizing on technological advances to exploit mature fields with millions of barrels of proven oil remaining in the ground.