August Energy Corp.

August Energy Corp.
U.S. Oil and Gas Resources Inc.

U.S. Oil and Gas Resources Inc.

January 13, 2005 14:08 ET

August Energy and US Oil and Gas Jointly Announce new Developments in Iowa Field


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: AUGUST ENERGY CORP.

PINK SHEETS SYMBOL: AENC

AND U.S. OIL AND GAS RESOURCES INC.

TSX VENTURE SYMBOL: USR

JANUARY 13, 2005 - 14:08 ET

August Energy and US Oil and Gas Jointly Announce new
Developments in Iowa Field

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 13, 2005) - August
Energy Corp. (PINK SHEETS:AENC), together with U.S. Oil and Gas
Resources (TSX VENTURE:USR), announce a joint venture with Consolidated
Odyssey Exploration Inc. (TSX VENTURE:ODE) as well as an update on
drilling operations at the Iowa Field located in Louisiana.

Joint Venture with Consolidated Odyssey Exploration Inc.

AENC and USR have together entered into a joint venture with ODE whereby
all three companies will develop the Iowa Field, located in Jefferson
County, LA. AENC and USR have each sold 1/3 of their respective
interests in the field to ODE for USD$50,000. The end result will be
that each of the three companies will own 1/3 of the interests of the
field and each will share 1/3 of the drilling cost, which is estimated
by the operator at $1,200,000. By drilling the well, the three companies
will each earn a 15% working interest in the new producing well together
with a 15% interest in an existing producing well, the leases and
production equipment.

Commencement of Drilling Operations for New Field Developmental Well

AENC and USR also announce that they have commenced drilling operations
for the new field developmental well in Iowa Field. The location has
been built and conductor pipe has been set in preparation for the rig to
move in on Monday, January 17th, 2005. Plans are to drill to
approximately 10,100 feet subsurface where a high pressure gas and gas
condensate zone is expected be encountered. Drilling is estimated to
take 30 days. Progress reports will be forthcoming.

Details of the history and potential of the reservoir were detailed in
August Energy's press release of September 8, 2004 and USR's press
release of November 26, 2004.

Geological evidence, including seismic, reviewed by the operator's
consulting geologist Gilbert G Talafuse Bsc. P.Eng, indicates that this
development project could encounter up to 200 feet of productive
formation in the objective zone with a potential for up to 15 billion
cubic feet of gas reserves. Multiple zones that are expected to be
encountered in the new drilling could ultimately yield a cumulative 20
billion cubic feet of gas together with 500,000 barrels of oil.

Located about 20 miles east of Lake Charles, LA, the Iowa Field has
produced over 465 billion cubic feet of gas and over 10,000,000 barrels
of condensate and/or oil according to production records obtained from
the Louisiana State Oil & Gas Board.

Certain information included in this communication (as well as
information included in oral statements or other written statements made
or to be made by August Energy Corp.) contain statements that are
forward looking, such as statements related to the future anticipated
direction of the oil and gas industry, plans for future expansion,
various property development activities, planned capital expenditures,
future funding resources, anticipated production and reserve growth.
These forward-looking statements are subject to a number of known and
unknown risks and uncertainties that could cause actual operations or
results to differ materially from those anticipated.


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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    August Energy Corp.
    Jurgen Wolf
    President
    (604) 681-1559
    or
    August Energy Corp.
    Mr. Whitney J. Pansano
    Operations
    (601) 591-5566
    Email: info@augustenergy.com
    Website: www.augustenergy.com
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.