U.S. Oil and Gas Resources Inc.

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

August Energy Corp.

February 24, 2005 10:00 ET

U.S. Oil and Gas Acquires an Additional 5% Working Interest in the Iowa Oil & Gas Field from August Energy


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: U.S. OIL AND GAS RESOURCES INC.

TSX VENTURE SYMBOL: USR

AND AUGUST ENERGY CORP.

PINK SHEETS SYMBOL: AENC

FEBRUARY 24, 2005 - 10:00 ET

U.S. Oil and Gas Acquires an Additional 5% Working
Interest in the Iowa Oil & Gas Field from August Energy

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 24, 20005) - U.S. Oil
and Gas Resources (TSX VENTURE:USR) and August Energy Corp. (PINK
SHEETS:AENC) -

U.S. Oil and Gas Resources (the "Company") is pleased to announce that
given the positive results obtained thus far on the Fred Denison #2 well
(see USR's previous news releases of February 2, 14 and 22, 2005), the
Company has acquired an additional 5% working interest in the Iowa Oil &
Gas Fields from August Energy Corp. (PINK SHEETS:AENC), together with a
5% interest in the Fred Denison #2 well and the existing Fred Denison #1
producing well, and the leases and production equipment located in
Southwest Louisiana, for the total sum of US$500,000 payable as
follows: US$250,000 payable upon signing; and US$250,000 payable $50,000
upon completion of the Company's proposed $660,000 financing announced
February 2, 2005, the balance to be paid quarterly commencing June 1,
2005. The Company also assumes the balance of the completion cost
attributable to the seller's earn-in interest estimated at $60,000 these
funds to be deducted from the funds committed to by Consolidated Odyssey
Explorations Inc. (TSX-venture symbol ODE) to the operator for the
completion of the Fred Denison #2 well.

As reported on February 14th and 22nd 2005, the Fred Dennison No. 2
well had thus far logged approximately 70 feet of cumulative oil and gas
in four potentially productive sands, including a new pay zone at 8958ft
that yielded 4800 units of gas, which Mr. Talafuse calculates should
flow at a rate of 3,000,000 cubic feet of gas per day. As of 6:00 am on
February 23rd, the well was drilling at 9657 ft, with current
penetration rate averaging 10 ft per hour. Mud (drilling fluid) weight
has been increased to 14.5 lbs from 10 lbs, necessitated by a drilling
break followed by 3400 gas units - all positive indicators that we have
penetrated the first of several objective high pressure sands. A
completion in the high pressure F-V and/or F-Y sand groups is expected
to deliver rates considerably higher judging by results from offset
wells in adjoining fault blocks. The operator is confident that upon
completion of drilling to total depth is finalized, all the facilities
and infrastructure are in place, including a tie in to a gas sales line,
to put the well into immediate production.

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 LA State Oil & Gas Board.



Jurgen Wolf
"Jurgen Wolf"
President
604-681-1559



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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    U.S. Oil and Gas Resources Inc.
    Jurgen Wolf
    President
    (604) 681-1559
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.