Greentree Gas & Oil Ltd.
TSX VENTURE : GGO

Greentree Gas & Oil Ltd.

April 02, 2007 09:59 ET

Greentree Gas & Oil Ltd. Reports Operations Update and Success at Tilbury West and Rodney South

LONDON, ONTARIO--(CCNMatthews - April 2, 2007) - Greentree Gas & Oil Ltd. (TSX VENTURE:GGO) ("Greentree" or the "Company") is pleased to report an update on the Company's operations and winter drilling program.

Tilbury West Prospect

Greentree recently completed the drilling of GGOL#71, a deep light oil prospect in Tilbury West Township, Essex County. The well penetrated a dolomite reservoir interval in the Trenton "Sherman Falls" formation and recovered both light oil and natural gas. The well will be cased and undergo a stimulation procedure with production testing to follow. A number of analogous oil producers that are located structurally on strike of GGOL#71 to the northwest reported initial production rates varying between 36 and 200 bbls/d following stimulation. Greentree has additional lands along structural trend of GGOL#71 and the potential exits for 3 to 4 follow-up development locations.

Rodney South Project

Greentree would also like to update the market on the development of the first phase of the Rodney South project with Wavefront Energy and Environmental Services Inc. ("Wavefront") that commenced in September 2006. Greentree has successfully completed the drilling of two horizontal producers and eight injection wells. Both horizontal wells penetrated approximately 170 meters (approximately 560 feet) of oil pay. The new wells are currently being integrated into updated facilities including production and injection lines, central tank battery, and injection system. In addition, six of eight vertical and one horizontal production wells that were shut-in since the initiation of development have been reactivated. The two remaining shut-in vertical wells will be reactivated with the start-up of production from the two new horizontal wells which is anticipated shortly. The current operational plan is to produce all wells naturally to establish a stabilized baseline production rate prior to commencing waterflooding. Water injection will be accomplished using Wavefront's Powerwave Process, more specifically, the highly successful solenoid-actuated Dragonfly tool as well as a new mechanically operated waterflood tool known as the "Mantis".

Under the terms of the Wavefront/Greentree Agreement announced February 2, 2006 Wavefront is providing up to $2.25 million in capital expenditures related to the first phase of development. In consideration of Wavefront's capital investment it shall earn a 70% net overriding royalty interest in overall production in Rodney South until payout of Wavefront's initial $C 2.25 million capital investment. Subsequent to payout, cash flow from operations will be allotted 50% to each of Wavefront and Greentree.

West Lorne Prospect

Greentree completed the drilling of an exploratory test in Aldborough Township, Elgin County in March of 2007. GGOL#72 penetrated approximately 1.5 meters of porous sandstone in the Silurian Grimsby formation but on subsequent testing the well produced primarily formation water with a minor amount of gas. The well has subsequently been abandoned. The exploratory test proved the presence of a potentially productive trend and future potential may exist in a structurally up dip location.

Greentree Gas & Oil Ltd. is based in London, Ontario and is an explorer and producer of natural gas and crude oil in southwestern Ontario. Greentree has 38,684,247 common shares outstanding.

Forward-Looking Statements

This press release contains some forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections. The Company assumes no obligation to update its forward-looking statements, expectations or projections.

THIS PRESS RELEASE WAS PREPARED BY GREENTREE GAS & OIL LTD., WHICH ACCEPTS THE RESPONSIBILITY AS TO ITS ACCURACY. NO REGULATORY AUTHORITY OR SIMILAR BODY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

Contact Information

  • Greentree Gas & Oil Ltd.
    Duncan Hamilton, M.Sc., P.Geo.
    President
    (519) 681-9355
    or
    Greentree Gas & Oil Ltd.
    Patrick Uzan, B.A., C.A.
    Chief Financial Officer
    (519) 681-9355
    or
    Greentree Gas & Oil Ltd.
    207-209 Consortium Court
    London, Ontario, N6E 2S8
    (519) 681-9355
    (519) 681-3887 (FAX)
    Email: greentree.gas@greentreegas.on.ca