Emerald Bay Energy Kuhn 3 well resumes production in South Texas

CALGARY and SAN ANTONIO -- Emerald Bay Energy Inc. has announced that operations to enhance oil recovery from the Kuhn 3 well are complete, and the well is now back on production. The Company previously completed a large acid job to increase in-flow from the formation, and a positive displacement progressive cavity pump has now been installed to pump the increased fluid volume. The new pumping system is capable of producing as much as 2,000 bpd of fluid compared to approximately 120 bpd from the previous standard rod pump. It is anticipated that Kuhn 3 will produce a high fluid volume with an oil cut between 2 and 4%.

Shelby Beattie, president and CEO of the company commented, "We are very pleased to have Kuhn 3 on production, and while the exploration process is inherently risky and can take time to realize success, it can also be very rewarding. Now that Kuhn 3, 4 and A5 are all producing, we will work with our partners to resume efforts in what we consider to be the prime target for exploration and development at Wooden Horse, horizontally drilled wells in the upper zone of the Edwards formation."

To date, the Company has drilled and completed one horizontal well in the Edwards formation, the Kuhn 1H well. Kuhn 1H was drilled horizontally in what is the lower of the two potentially productive zones in the formation. At the time, the Company and its partners chose to drill in the lower zone of the formation for several factors including one of the partners experience with successful wells in the lower zone approximately 13 mi away from Wooden Horse. To produce Kuhn 1H, the Company drilled a disposal well capable of injecting 40,000 bpd, and built the facilities capable of handling approximately 10,000 bpd. Kuhn 1H pumped for over a year from the lower zone and oil production was minimal. Over the past 18 months, wells in much closer proximity to Wooden Horse have been drilled horizontally in the upper zone of the Edwards formation, and the results have been very good, with wells producing up to 170 bpd of oil. The Company has always considered the upper zone in Kuhn 1H as a potential producer. The upper zone in Kuhn 1H has higher permeability and porosity than the lower zone and the core samples from the upper zone were highly saturated with oil. These factors along with the recent drilling results in the area make Kuhn 1H a top priority for the Company as we move forward at Wooden Horse.