SOURCE: Riverdale Oil and Gas Corp.

May 03, 2007 09:00 ET

Riverdale Oil and Gas Corp. Announces Plans to Re-Work the Foster #2 Gas Well in Jim Wells Co., TX

Company Expects to Spend $100,000 on Re-Work With Expected Revenues From the Re-Work to Exceed $1,350,000 per Annum

HUNTINGTON BEACH, CA -- (MARKET WIRE) -- May 3, 2007 -- Riverdale Oil and Gas Corp. (PINKSHEETS: RVDO) (www.riverdaleoilcorp.com), which recently went public with the trading symbol of RVDO:PK, announced today that it is preparing to begin additional work on the Foster #2 well as soon as possible, which is part of the 600 acres of proven producing leases owed by the Company in Jim Wells Co., Texas.

Discussions with the Company's operator in Texas, Property Development Group, Inc., have focused on improving production from the current zone the Company is producing from at this time, as well as the potential from a desirable lower zone that is behind pipe. The present zone @ 6272'-6282' has a shut-in tubing pressure of 5270#'s, but production has been restricted. The Company will first clean up the Frio sand, squeeze off the old drilling mud invasion and re-perforate that zone, then go to the lower objective in the Y 2 Yegua sand @ 7068'-7080' and perforate there. The upper zone can be produced through the casing and the lower zone through the tubing, which has the potential to greatly increase the daily production rate and monthly revenues. The estimated cost to achieve this dual completion is $100,000 based on current field/service company pricing.

The Company considers these re-work operations to be low risk, and expects them to be successful. The Operator expects to produce approximately 500 million cubic feet of gas after the rework is finished in approximately 4 weeks after initialization. Based upon current gas prices in excess of $7.50 per MCF, the Company expects to recognize $1,350,000 of annual gross revenues from this re-work operation.

Brian Kingsfield, CEO of Riverdale, stated: "With oil prices presently exceeding $66 per barrel and gas prices exceeding $7.50 per MCF, we are concentrating our efforts in the next several months in maximizing our returns for our existing assets. The Foster rework should payout in less than 3 months, with steady production for several years averaging $1,350,000 per year at present gas prices. The major difference between us and most small independent oil and gas companies is that we already have a substantial amount of lease acreage in our portfolio and can thereby avoid the substantial upfront costs of purchasing acreage with proven producing reserves. Our capital will go directly to produce an immediate enhanced revenue stream for the Company and our shareholders."

ABOUT RIVERDALE OIL AND GAS CORP.

Riverdale was formed in August 2005 to engage in the acquisition of currently producing properties, leases with proven reserves, and the exploration, development and production of oil and natural gas properties. The principal assets of the Company are composed of: (i) a 75.00% working interest (52.50% net revenue interest) in five existing wells (the Foster Workover) located on the Foster Lease in Jim Wells County, Texas consisting of 600 acres with additional drill sites; (ii) a 37.50% working interest (26.25% net revenue interest) in one existing well (the Koomey #2) located in Waller County, Texas; (iii) a 5.50% working interest (3.85% net revenue interest) in 2 existing wells (the Koomey #4 and Koomey #5) located in Waller County, Texas; (iv) a 5% working interest (5% net revenue interest) in a salt water disposal well (the Koomey #1) on one acre located in Waller County, Texas; and (v) a 75% working interest (52.50% net revenue interest) in 2 existing wells (the Bains #A-1 and the Vie-Del #4-1) and all related equipment (i.e., tanks, wellhead equipment, etc.), which covers a total of 480 acres and is located within the S.E. Raisin City Oil Field region of Fresno County, California.

The Company currently owns working interests in a total of 10 existing wells and 1 salt water disposal well located in California and Texas. Based upon independent geological and engineering reports, the Company currently holds proven reserves of $42,391,300 and probable reserves of $180,088,560.

The Company plans to deploy $5 million in 2007 to continue its exploration program on the leases that it owns, and to acquire other existing production, drilling and development of high potential exploratory prospects, as well as lower-risk prospects involving development wells within mature fields with a production history, step-out exploration in areas of existing production, as well as recompletions and workovers of existing wells.

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FORWARD-LOOKING STATEMENT: This press release contains forward-looking statements, including expected industry patterns and other financial and business results that involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Such risk factors include, among others: the historic volatility associated with the oil and gas industry; the rising costs associated with acquiring oil and gas leases; ability to retain key employees; political stability or instability, which can affect oil and gas price, and the general risks associated with the drilling and production of oil and gas well in the United States. Actual results may differ materially from those contained in the forward-looking statements in this press release.

Contact Information

  • CONTACT INFORMATION:

    Corporate Inquiries
    LJ Sabean
    www.riverdaleoilcorp.com
    800-748-5035

    Operations
    Property Development Group, Inc.
    Ron Herzfeld
    800-516-9661