JMG Exploration, Inc.
PCX : JMG

JMG Exploration, Inc.

November 14, 2005 14:08 ET

JMG Exploration, Inc. Updates Operations and Drilling Activity and Announces Third Quarter Results & New Directors (all amounts expressed in U.S. Dollars)

CALGARY, Alberta--(CCNMatthews - Nov 14, 2005) -

JMG Exploration, Inc., ("JMG" or the "Company") (PCX: JMG, JMG+) today announced updated operations and drilling activity and financial results for the nine month period ended September 30, 2005.

JMG has increased its land position in North Dakota to 89,828 (gross), 82,474 (net) acres. These lands have been purchased for prospective Bakken and Midale production. The Company has 16 Bakken wells budgeted for this area. To date, JMG has drilled and completed three wells. Geographically, the lands are in two areas. The first well, the Burau 4 well in Burau County, was drilled on the smaller eastern land block consisting of 22,000 (gross), 17,000 (net) acres. This well did not have the budgeted productive capacity in the Bakken but did encounter pay in the Midale formation which is currently being recompleted. The second and third wells were drilled in the larger northwestern land block. The second well drilled at Rindel 3-9-HD in Divide County is producing at a stabilized rate of approximately 150 boe/d with additional optimization potential. The pumping equipment is being sped up to increase this production rate. JMG has farmed out an offsetting section to this well where JED Oil Inc. (AMEX:JDO) is currently drilling. JMG has a 30% carried interest in this offset well. The third well drilled by JMG at Pointes 2-11-HD in Candak, Divide County has been drilled and recently fracture stimulated. The well is currently being tested.

In addition to the ongoing activity in the Bakken zone, JMG plans to drill a Midale test in its large northwestern land block directly offsetting a recent Midale pool discovery. Drilling of this well will commence in early December, 2005. Also in December, JMG plans to commence drilling its first well on its land in the Pinedale area of Wyoming. This land offsets the prolific Jona/Pinedale producing fields.

Third Quarter Results

Third quarter revenue for the three month period ended September 30, 2005 was $449,384. There was no revenue during the comparative period in 2004. Revenues for the first nine months of 2005 were $456,884. The vast majority of the revenues were related to production from two Bakken exploratory wells in the North Dakota.

For the third quarter, the Company incurred a loss of $694,587 compared to a loss of $73,980 for the comparative period in 2004. The net loss from operations through the first nine months of the year was $1,379,383. The net loss applicable to common stockholders was $764,532 for the 2005 third quarter compared to a loss of $200,536 during the same period in 2004 and $1,837,725 for the first nine months of this year, after giving effect to preferred stock dividends of $69,945, $126,556 and $458,342, respectively.

"We have continued to acquire additional land on the Bakken and Midale trends in North Dakota," stated Scobey Hartley, President of JMG. He added, "we now have a tremendous land position and are encouraged with the wells drilled to date. We are excited to be transitioning JMG from the start up phase to that of an active explorer and look forward to our upcoming drilling program in the Jona/Pinedale area of Wyoming, continued drilling on the Bakken trend and offsetting the new Midale pool discovery in North Dakota."

New Directors

JMG also announces that it has added Don Wells and Reg Greenslade to its Board of Directors. Don Wells is currently the Chief Financial Officer of Wetzel's Pretzels, LLC, a position he has held since 1997. Wetzel's Pretzels LLC is a franchisor of fresh pretzel bakeries with approximately 200 stores in shopping malls across the United States. Prior to his current position, Mr. Wells has held the position of Chief Financial Officer with four private manufacturing companies. He also serves on the Boards of Directors of a number of privately held companies. Mr. Greenslade has agreed to serve as Chairman of the Board of JMG and remains Chairman of Enterra Energy Trust and JED Oil Inc. In conjunction with these appointments, Louie Geirstorfer has resigned from the Board. JMG would like to acknowledge Mr. Geirstorfer for his contributions during his term as a director which were greatly appreciated.

Forward Looking Statements for JMG Exploration, Inc.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This news release contains forward-looking statements concerning estimated production volumes, business plans for exploration, development and drilling, or other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about future events, conditions, results of operations or performance that constitute "forward-looking statements" within the meaning of applicable securities legislation. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking statements. These risks and uncertainties include, but not limited to, the impact of competitive services, demand for services like those provided by the company and market acceptance risks, fluctuations in operating results, cyclical market pressures on the oil and natural gas industry and other risks detailed from time to time in the company's filings with Securities and Exchange Commission. JMG Exploration, Inc. undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or otherwise.

Contact Information

  • JMG Exploration, Inc.
    Joanne Finnerty, 403-537-3250
    H.S. (Scobey) Hartley, 403-261-2959
    Reg Greenslade, 403-537-3250
    or
    Investor Relations Counsel
    The Equity Group Inc.
    Linda Latman, 212-836-9609
    Andreas Marathovouniotis, 212-836-9611
    www.theequitygroup.com