SOURCE: Blugrass Energy Incorporated

November 18, 2009 08:30 ET

Blugrass Has Begun Geological Assessment on Cave Pool Unit

CALGARY, AB--(Marketwire - November 18, 2009) - Blugrass Energy Inc. (OTCBB: BLUG) is pleased to announce that Blugrass Energy's 40% WI Joint Venture Partner in the Cave Pool Unit Project is Doral West Corp. ("Doral West") a subsidiary of Doral Energy Corp. ("Doral"), which currently owns and operates 186 wells on 66 leases and approximately 7,800 acres along the Artesia-Vacuum Trend in Eddy County, NM. Doral West Corp. will be the Operator of the Cave Pool Unit Project.

Doral West will begin an immediate assessment of the existing wells and facilities located in the Project Area. Well files and NM regulatory files will be examined to prepare initial wellbore diagrams for all wells which will be updated when each well is reworked and repaired. The mechanical and operational integrity of the wells, pumping units, and production facilities will also be assessed for repairs and/or replacements. A key to the success of initial well repair jobs and reworks will be the restoration of existing wells to production by repairing downhole pumps, rods, and tubing, along with surface pumping units and motors. After the completion of an initial geological review of the Project Area, Doral West plans to begin the perforating and completion of additional bypassed pay zones in the Grayburg Jackson Pool in the existing Cave Pool Unit Project wells. These operations will potentially add to the Projects oil production and increase PDP reserves at a fraction of the capex required for the drilling and completion of new wells. Doral will utilize and employ information, data, and experience gained in similar operations on Doral-owned leases along the Artesia-Vacuum Trend in Eddy County, NM.

The Cave Pool Unit Project acreage is located adjacent to 3 leases owned and operated by Doral Energy which contain 9 PUD drilling locations as assigned by a third-party independent reserve engineering firm. The redevelopment of the Cave Pool Unit currently envisioned by Doral West as a 20-acre 5-spot waterflood project in the Grayburg Jackson Pool could potentially add 100 infill development drilling locations and potential gross reserves could be in excess of 3.0 million barrels of oil equivalent.

As soon as enough significant geological, engineering, and production data is obtained from operations, Doral West will work with an independent engineering firm to obtain an independent engineering reserve report on the Cave Pool Unit properties.

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 West Corp. This property fits well within our business model and will allow Blugrass to bring these wells back into production with all of Doral's expertise. The redevelopment of the Cave Pool Unit has the potential of being very beneficial to both Doral West 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:
    Blugrass Energy Inc.
    Tony Collins
    1-877-511-0110