Palo Duro Energy Inc.

Palo Duro Energy Inc.

September 18, 2007 19:24 ET

Palo Duro Basin Project Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 18, 2007) -


Mr. Mark Bush, President of Palo Duro Energy Inc. (TSX VENTURE:PDE) ("Palo Duro" or the Company") provided the following update on recent activities on the Palo Duro Basin projects. The Company is finalizing its exploration program utilizing proprietary EM technologies and is preparing to drill exploratory wells in the Palo Duro basin by mid October. Palo Duro is targeting Pennsylvanian and Permian limestone "reefs" similar to the types that have produced oil and gas at the Wolf Flat and Gupton fields in Motley County, Texas. The reefs are interpreted as forming along ancestral shelf margins of Canyon, Cisco and Wolfcamp ages that developed in the central Palo Duro basin. Other potential targets are Pennsylvanian (Atoka) quartz sandstones, such as those producing gas at Rhombochasm field on trend with our acreage. These sands are interpreted to have been shed from the Amarillo-Wichita and the Red River Uplifts. The Company expects the hydrocarbon traps for the prospects to be both structural and stratigraphic. Source rocks for the hydrocarbons are anticipated to be the underlying Lower Pennsylvanian (Atoka) shales currently being evaluated as fractured shale reservoirs in the Palo Duro basin by companies including our partners Bankers Petroleum. Significant shows and test rates have been encountered from many of the wells that have drilled in the Bend Shale play in the past several years.

Numerous exploratory wells have encountered gas and oil shows in both the limestone formations and channelized sandstones. This indicates the hydrocarbons generated from the Pennsylvanian shales have migrated along pathways, such as faults and fractures, into the younger rocks, and Palo Duro Energy is exploring for the traps that would have had sufficient sealing conditions to contain the oil and/or gas.

Palo Duro is optimistic these conventional prospects have significant unrealized potential and will supplement the current exploratory program on the Bend Shale resource play.

Review by Qualified Person

Palo Duro has relied on the review of Mr. Wes Franklin, a professional petroleum engineer and a Qualified Person under NI 51-101 regulations, for data of a technical nature. Mr. Franklin has visited the Project area and has compiled and reviewed the scientific and technical information contained in this News Release.

Palo Duro Energy Inc. is an oil and gas exploration and development company with a fully equipped and staffed operations office in Houston, Texas and corporate offices in Vancouver, British Columbia. The Company holds a 27% interest in over 400,000 net acres of prospective oil and gas leases in the Palo Duro Basin in northwest Texas.

Palo Duro Energy Inc.

Mark A. Bush, President

Certain statements in this press release constitute forward-looking statements under applicable securities legislation. Such statements are generally identifiable by the terminology used, such as "anticipate", "believe", "intend", "expect", "plan", "estimate", "budget", "outlook", "may", "will", "should", "could" or other similar wording. Forward-looking information includes, but is not limited to, reference to business strategy and goals, future capital and other expenditures, reserves and resources estimates, drilling plans, construction and repair activities, the submission of development plans, seismic activity, production levels and the sources of growth thereof, project development schedules and results, results of exploration activities and dates by which certain areas may be developed or may come on-stream, royalties payable, financing and capital activities, contingent liabilities, and environmental matters. By its very nature, such forward-looking information requires Palo Duro to make assumptions that may not materialize or that may not be accurate. This forward-looking information is subject to known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such information.

The forward-looking information contained in this press release is made as of the date of this press release and, except as required by applicable law, Palo Duro does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The securities offered have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and many not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable states securities laws.

Shares Outstanding: 161,091,844

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Palo Duro Energy Inc.
    Investor Relations
    (604) 639-4673
    (604) 639-4670 (FAX)