SOURCE: Mammoth Energy Group, Inc.

June 18, 2008 08:30 ET

Mammoth Energy Group, Inc. Announces Drilling Update

WINSTON-SALEM, NC--(Marketwire - June 18, 2008) - Mammoth Energy Group, Inc. (PINKSHEETS: MMTE) -- Mammoth Energy announced today that its consultant, American Continental Energy, LLC ("ACE"), has contracted Mandalay Energy Resources, LLC ("Mandalay") to operate its 3 well drilling project in Noble County, OK. Mandalay has permitted the three locations in Section 30 of Township 24 North, Range 1 West. Mammoth's lease assignment will be recorded this week in the land records of Noble County.

Mandalay operates several fields in Oklahoma and agreed to operate this project for American Continental Energy. Mandalay has secured a slot on a regional drilling company's drilling schedule. Unfortunately, the recent inclement weather in the Midwest has created some delays and has pushed back the drilling to the end of June 2008. However, Mandalay expects to commence drilling within a couple of weeks barring no further delays from weather. "There has been record rainfall in NE Oklahoma this spring and early summer and we are hoping for a break to get our drilling program started," stated Joe Overcash, CEO. We have paid the driller, who has bought the drill pipe for the initial project and continue to look forward to getting these first wells drilled.

"On the other side of Highway 35, Range Exploration out of Oklahoma City has had tremendous success in this area," said Joe Overcash, CEO. "Based in part upon Range's success as well as historical data, Mandalay and ACE believe that there is tremendous potential from deeper zones on this lease. So, our first goal will be to drill the shallower zones where it is cost effect to drill, complete wells and quickly get wells into production. Once that is done, we plan to then go back and test for deeper pay zones."

Wells have been drilled in this area of Kay and Noble Counties since the 1920s. On this lease and on surrounding acreage, the majority of historically producing wells were drilled from the 1950s to the early 1980s. One well on Mammoth's lease was drilled to the Skinner at about 4,100 and had initial production of 1,250,000 cubic feet of gas per day (1,250 MCFD). Contiguous to this, a well was drilled to the Mississippi at ~4,300' and had initial production of 33 barrels of oil per day (BOPD) and 725 MCFD.

Based on projections done by the former operator of the property, we estimate that the three wells combined could generate over $525,000 within 36 months based on gas production alone. We would hope to double or triple that number if we find oil along with the gas.

Mammoth Energy Group, Inc.

We are focused on developing shallow gas and/or oil projects in northeastern Oklahoma due to the low risk, blanket characteristics in the area that make it possible to drill and produce a well nearly every time. We have continuing revenue from our Rogers County, OK project and with the Noble property hopes to develop wells that can be drilled quickly and position us to grow consistently each month as new wells are brought on-line.

More information is available at the company's website at

Cautionary note: This report contains forward looking statements, particularly those regarding cash flow, capital expenditures and investment plans. Resource estimates, unless specifically noted, are considered speculative. By their nature, forward-looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to US investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.

Contact Information