SOURCE: Cardinal Energy Group, Inc.

Cardinal Energy Group, Inc.

February 12, 2015 12:39 ET

Cardinal Energy Group, Inc. Sets Business Strategy for 2015

Drilling Programs and Shallow Well Development in Focus for Profitability

DUBLIN, OH--(Marketwired - Feb 12, 2015) - Cardinal Energy Group, Inc. (OTCQB: CEGX) sets its business strategy for 2015. Secondary recovery methods and developmental or in-field drilling on existing acreage will continue to be the focus of operations for the foreseeable future for Cardinal. Our secondary recovery methods allow the company to withstand low oil prices and continue profitability.

Conservative management and attractive asset choices also leave Cardinal in a great position to survive price downturns and capture any volatility-related upsides. Cardinal has positioned itself to be profitable with its assets in both high priced and low priced environments. Cardinal will continue to offer accredited investors an opportunity to partner with the company through our Direct Participation Programs.

Timothy W. Crawford, the Company's CEO, comments, "Our ultimate aggressive production profile in our two pronged strategy should lead us into profitable quarters for years to come. We will continue to seek assets that are opportunistic when assets are available in the market that meet our criterion. We will continue our shallow oil drilling programs on our existing acreage in Central Texas; with the drop in oil prices drilling and completions costs have also come down significantly. Utilizing secondary recovery methods along with shallow oil drilling we have been able to keep our finding and lifting costs at approximately $15 per barrel."

Crude Oil Development
Crude oil development and production in U.S. oil reservoirs can include up to three distinct phases: primary, secondary, and tertiary (or enhanced) recovery. During primary recovery, the natural pressure of the reservoir or gravity drive oil into the wellbore, combined with artificial lift techniques (such as pumps) which bring the oil to the surface. But only about 10 percent of a reservoir's original oil in place is typically produced during primary recovery. Secondary recovery techniques extend a field's productive life generally by injecting water or gas to displace oil and drive it to a production wellbore, resulting in the recovery of 20 to 40 percent of the original oil in place.

However, with much of the easy-to-produce oil already recovered from U.S. oil fields, producers have attempted several tertiary, or enhanced oil recovery (EOR), techniques that offer prospects for ultimately producing 30 to 60 percent, or more, of the reservoir's original oil in place. Three major categories of EOR have been found to be commercially successful to varying degrees:

Thermal recovery, which involves the introduction of heat such as the injection of steam to lower the viscosity, or thin the heavy viscous oil, and improve its ability to flow through the reservoir. Thermal techniques account for over 40 percent of U.S. EOR production, primarily in California.

Gas injection, which uses gases such as natural gas, nitrogen, or carbon dioxide (CO2) that expand in a reservoir to push additional oil to a production wellbore, or other gases that dissolve in the oil to lower its viscosity and improves its flow rate. Gas injection accounts for nearly 60 percent of EOR production in the United States.

Chemical injection, which can involve the use of long-chained molecules called polymers to increase the effectiveness of waterfloods, or the use of detergent-like surfactants to help lower the surface tension that often prevents oil droplets from moving through a reservoir. Chemical techniques account for about one percent of U.S. EOR production.

Forward Looking Statements
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Cardinal Energy Group, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our beliefs concerning our ability to increase the rate of oil and gas production, and the expected demand, pricing and operating results for our oil and gas operations.

About Cardinal Energy Group, Inc.
Cardinal Energy Group, Inc. is a U.S. producer of oil and natural gas within the United States. The Company is headquartered in Dublin, Ohio and has its regional operations office located in Albany, Texas. We are an environmentally responsible oil and gas Company. Cardinal focuses on known formations that have significant proven reserves remaining that can be produced economically. Cardinal targets fields with wells that may need remediation due to neglect or undercapitalization. We select prospects that offer a strong up-side for production. The upside we seek in a prospect is threefold -- it must have the potential to be restarted or have its current production increased using newer technology and remediation methods and; it must also have additional lease acreage which can be further developed by completing development wells adjacent to existing producing wells, or it must be an overlooked or distressed prospect in the explosive shale formations like the Permian Basin or Eagleford shale. Cardinal exploits these undervalued assets by acquiring a majority working interest in the prospect and then applies the Company's calculated development plan. Cardinal also seeks acquisitions of over-leveraged companies when there is a clear upside from their purchase based on strong commodity prices. The Company operates throughout the Continental United States. More information on Cardinal Energy Group, Inc. is available at www.cegx.us.

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