SOURCE: Blugrass Energy Incorporated

October 29, 2009 14:30 ET

Blugrass Announces Closing of Eddy County, New Mexico Joint Venture With Doral Energy Corp.

CALGARY, AB--(Marketwire - October 29, 2009) - Blugrass Energy Inc. (OTCBB: BLUG) is pleased to announce that Doral Energy Corp. ("Doral") has executed the closing of the purchase and sales agreement to acquire a 40.0% working interest ("WI") in all leases owned by Blugrass in and around the Cave Pool Unit located in Eddy County, New Mexico (the "Cave Pool Unit"). Blugrass had previously acquired a 100% working interest in the approximately 2,800 acres of the Cave Pool Unit properties from Robinhood L.L.C. (Marks and Garner Production Company) on October 12, 2009.

The Cave Pool Unit is located within the Artesia Vacuum Trend, more specifically, within the Grayburg Jackson Pool. The Artesia Vacuum Trend currently contains thirteen reservoirs with more than 1 MMBO cumulative production. Cumulative production from these 13 reservoirs was 796 MMBO as of 2000. Depths to the top of reservoirs range from 1290 to 4700 ft. This is a mature Area, especially within the productive San Andres Carbonates. Recent development of lower permeability Grayburg sandstones in the Grayburg Jackson reservoir during the mid-1990s has been successful to the point of reversing production decline and is a major focus of current and future development in the area.

The Cave Pool Unit properties currently produce approximately 12 BOPD and 30 MCFD of natural gas from 32 wells which were drilled on 40-acre well spacing in the Grayburg formation of the Grayburg Jackson Pool. An additional 10 shut-in wells on the properties have been identified and will be reworked and returned to production by Doral Energy, adding to the daily production from the properties. The redevelopment of the Cave Pool Unit as a 20-acre 5-spot Grayburg waterflood project could potentially add approximately 100 development drilling locations and potential gross reserves in excess of 3.0 million barrels of oil equivalent.

Mr. Berscht, president of Blugrass Energy Inc, states, "Blugrass Energy is very pleased to have the opportunity to develop the Cave Pool Unit properties with our new partner, Doral Energy Corp. This property fits well within our business model and will allow Blugrass to bring these wells back into production with all of Dorel's expertise. The redevelopment of the Cave Pool Unit has the potential of being very beneficial to both Doral Energy and Blugrass Energy."

About Blugrass:

Blugrass Energy Inc. is a development stage oil and gas development and exploration company based in the United States that is traded on the Over the Counter Bulletin Board under the Symbol BLUG. The goal of BLUG is to grow through internally generated and developed prospects, participation with industry partners in oil and gas exploration and in targeted joint ventures.

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Contact Information

  • Contact:
    Blugrass Energy Inc.
    Tony Collins
    1-877-511-0110