SOURCE: Modern Energy Corp.

August 27, 2007 05:55 ET

Modern Energy Corp. Announces Completion of Test Well With Major Natural Gas Producer Partner

Production Expected Within Thirty Days; Additional Test Wells Planned

LOS ANGELES, CA--(Marketwire - August 27, 2007) - Modern Energy Corp. (PINKSHEETS: MODR), (FRANKFURT: ME2), (FRANKFURT: ME2F), announced that the company and its new natural gas drilling partner have completed a test well on the leased property in a productive area in Oklahoma with positive results.

The test well was drilled through the Morrow, Chester and Mississippian Zones to a depth of 7260 feet. Completion of the well for gas and oil production is expected within the next 30 days. The company's 80% owned subsidiary has a 15% net participating interest in the test well plus as many as six additional natural gas well sites under consideration for drilling.

Modern Energy's production partner is NYSE listed and one of the largest independent producers of natural gas in the U.S., with over $5 billion annual revenue. The currently undisclosed partner is focused on exploratory and developmental drilling throughout many regions of the U.S.

James Stewart, CEO of Modern Energy, said, "We are very excited to join up with such an experienced and successful development and production partner. We anticipate that we will disclose our partner in the very near future as more details on the production of the wells are determined. With our net production interest in this well, along with the prospects for additional test wells, we look forward to seeing rising cash flow from our interests in this very productive natural gas and oil region of Oklahoma."

Modern Energy Corp. is involved in a section of land in Woodward County, Oklahoma near the Texas border. The area includes the Chester and Mississippian Zones, which are well known in the Oklahoma-Texas region for proven gas reserves. There are two wells, each producing 42 million cubic feet per day along with 500 barrels of oil per day, located about 10 miles away from the Modern Energy section. Another well 15 miles away is yielding 1,000 barrels of oil per day.

Further Development of Currently Producing Well

The Modern Energy section had its first well drilled in 1978. The well, known as Loomis #1, produced a significant amount of natural gas, but due to low natural gas prices at the time, the well was shut down. With oil prices now ranging $55 and $79 per barrel and natural gas fluctuating between $6 and $11 per thousand cubic feet, the company is confident that the decision to develop the well now is economically sound. Recent geologic and engineering studies indicate a potential 2.8 billion cubic feet of natural gas reserves in the area under Loomis well #1. The well has been in limited production at a rate of 100,000 cubic feet of gas per month from just the upper zones, not including the productive Chester Zone. The further development of the well will bring in production from the Chester Zone.

It is the company's analysis that the Loomis #1 well (in which it has a 65% interest) has the potential to produce more than 300,000 cubic feet of gas per day plus as much as 50 barrels of oil per day. At current prices of $6/thousand cubic feet and $60/barrel, this production would translate into revenues of over $1.5 - $2 million a year. Significantly, the company believes that up to six other productive wells could be drilled on the property.

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About Modern Energy Corporation:

Modern Energy Corp. founded in 1996, is a development stage investment company with interests in oil and gas in Oklahoma, land in the Philippines, and marketable securities. The company is currently producing natural gas and plans to increase the development of natural gas wells in Oklahoma. The company also has biofuel feedstock cultivation potential (palm and jatropha oils) on company land holdings (largely under-developed plantations) totaling over 250,000 hectares (600,000 acres) in the Philippines. In addition, the company's Mindanao land has mineral rights where potentially valuable quantities of copper, gold, silver and other minerals are likely to be present. The company will further assess the property and determine which minerals are commercially viable as a prelude to obtaining a corporate partner for mining development. Recently updated corporate website:


This press release contains forward-looking statements that involve risks and uncertainties. The statements in this release are forward-looking statements that are made pursuant to safe harbor provision of the Private Securities Litigation Reform Act of 1995. Actual results, events and performance could vary materially from those contemplated by these forward-looking statements. These statements involve known and unknown risks and uncertainties, which may cause Modern Energy Corporation's actual results in future periods to differ materially from results expressed or implied by forward-looking statements. These risks and uncertainties include, among other things, development costs and risks, product demand and market competition. You should independently investigate and fully understand all risks before making investment decisions.

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