Milagro Energy Inc.

Milagro Energy Inc.

March 09, 2005 12:07 ET

Milagro Energy Inc.: Sale of Non-Core, Undeveloped Lands Raises $4,268,000 to Fund Development and Exploration at Judy Creek


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: MILAGRO ENERGY INC.

TSX SYMBOL: MIG

MARCH 9, 2005 - 12:07 ET

Milagro Energy Inc.: Sale of Non-Core, Undeveloped
Lands Raises $4,268,000 to Fund Development and
Exploration at Judy Creek

CALGARY, ALBERTA--(CCNMatthews - March 9, 2005) - Milagro Energy Inc.
(TSX:MIG) is pleased to report the completion of its monetization of
non-core, undeveloped lands, for total proceeds of $4,268,000 dollars
Canadian. The proceeds will be used to fund development and exploration
at Milagro's Judy Creek prospect in west central Alberta.

The assets that have been sold are; a portion of its helium and
associated gases rights in the Battle Creek Area of S.W. Saskatchewan, a
portion of its petroleum and natural gas rights covering the coal bed
methane potential on its lands in the Bittern Lake Area of Central
Alberta, and an undivided 50% percent working interest in the
non-producing lands and two standing potential gas wells in the Divide
Area, of southwest Saskatchewan.

In 2005 Milagro will concentrate on the development of a light oil
discovery in Judy Creek. The company is currently proceeding with a
commercialization plan which includes; the licensing of up to 15
drilling locations, the building of a production facility, and pipeline
infrastructure including 1/2 mile tie-ins of both oil and gas sales
lines. Drilling will commence after spring break-up. It is anticipated
that 6 to 9 wells will be completed before the end of 2005. The
discovery well at 7-29 is now on pump and is currently producing between
50 and 100 barrels of oil equivalent per day without water. Production
is currently intermittent due to ground conditions. The completion of
production facilities will alleviate intermittent production.

In order to continue the growth from its existing producing areas,
Milagro has also entered into farm out agreements with an industry
partner for the continuing development of the Battle Creek area and the
Bittern Lake area. The farm out agreements will result in the drilling
of 2 horizontal oil wells and 6 gas wells at Battle Creek, starting in
Q2/05. A Mannville test, which may be deepened to the Leduc, is to be
drilled in Bittern Lake by Q3/05.

Milagro is an exploration and production company engaged in the
acquisition, exploration, development and production of oil and gas
reserves in western Canada. Milagro is listed for trading on the Toronto
Stock Exchange.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Milagro Energy Inc.
    Jeffrey Rekunyk
    CEO
    (403) 693-4006 or Toll Free: 1-866-693-4022
    or
    Milagro Energy Inc.
    Brad Haack
    CFO
    (403) 693-4007 or or Toll Free: 1-866-693-4022
    Website: www.milagroenergy.com