Storm Cat Energy Corporation
TSX VENTURE : SME

Storm Cat Energy Corporation

August 09, 2005 09:01 ET

Storm Cat Energy Provides Operational Update: Company Commences Powder River Basin Drilling with Dedicated Rig; Average Daily Production Exceeds 3,500 Mcf

CALGARY, ALBERTA and DENVER, COLORADO--(CCNMatthews - Aug. 9, 2005) - Storm Cat Energy Corp. (TSX VENTURE:SME) (the "Company") provided an update on the Company's operations.

Powder River Basin

Storm Cat is producing approximately 3,500 thousand cubic feet (Mcf) of natural gas per day from its properties located in Campbell County, Wyoming.

Storm Cat commenced its 2005 drilling program in the Northeast Spotted Horse area on July 19, 2005 with initial wells connected to a natural gas sales line on August 3, 2005. Seven wells have been drilled to date and are either completed or in various stages of completion, using multi-seam completion techniques. The use of Storm Cat's multi-seam completion technology provides for the capture of incremental reserves in a single wellbore, significantly reducing finding and development (F&D) costs.

Storm Cat has 120+/- drillable locations in the Northeast Spotted Horse area. Sixteen drilling permits have been secured, with an additional 105 expected to be in hand through year-end 2005. Storm Cat's projected well economics for its Northeast Spotted Horse program are approximately $1.00 per MCF in F&D costs with an overall project rate of return in excess of 50%.

Alaska

The Company was the high bidder on eight blocks in the recent Alaska State Lease Sale. The blocks are adjacent to the Company's existing acreage position and to the Pioneer Unit located onshore Cook Inlet. As a result of this leasehold acquisition, Storm Cat now owns 100% interest in over 35,000 acres. The Company is finalizing its technical work from which it will drill a test well on its acreage during the fourth quarter 2005.

Saskatchewan

The Company completed it work commitment on its Moose Mountain exploration permit, resulting in Storm Cat earning its 30% working interest in the 238,830 acre block. Details of the joint venture were announced on February 22, 2005.

Storm Cat believes the Moose Mountain acreage offers as many as five distinct reservoirs: three Cretaceous-aged gas formations and two conventional Paleozoic carbonate plays. The first well drilled by Storm Cat, the Clemenceau well No 14-6-42-4, was specifically drilled to test these geological concepts. As a result of drilling the stratigraphic test well, the Company gathered important down hole data from mud logs and Reservoir Saturation Tool (RST) analysis. Storm Cat's technical team concluded, from its analysis, the well had natural gas shows from the Second White Specs Formation (73 meters to 77 meters gross), the Mannville Formation (229 meters to 279 meters gross), and the Souris River Formation (324 meters to 329 meters gross). Oil shows were encountered in the Dawson Bay and Winnepegosis formations.

Geochemical and aeromagnetic work is planned which will be tied back to the down hole data, and together, will be used to determine the Company's next drilling target in 2006.

British Columbia

Storm Cat's previously announced Farm-in and Joint Venture Agreement (JVA) with EnCana Corporation, on 77,775 gross acres (31,110 gross hectares) in the Elk Valley area of southeast British Columbia, Canada is now finalized. Storm Cat is currently re-activating a few of the 17 pilot/test wells drilled previously by EnCana for the purpose of establishing a second core production unit for Storm Cat. According to evidence provided to the Company by EnCana, during the testing of the West Pilot, EnCana successfully delivered a constant 400 Mcf per day over 23 months from 4 wells. The West Pilot program targeted the Mist Mountain Formation at a depth less than 1,000 meters. The coal is high to low volatile bituminous, with measured gas contents of 200 - 600 standard cubic feet (scf) per ton. A new well will be drilled by Storm Cat in the West Pilot area in the fourth quarter 2005.

Mongolia

The Company is fulfilling its work commitment under its Production Sharing Contract with the Mongolian government. The focus of this work is on the Tsaidam Block, situated south of the capital of Ulaanbaatar. Storm Cat has a current work commitment on its Mongolian project of $600,000 in 2005.

American Stock Exchange Listing

Storm Cat Energy Corporation filed for a listing on the American Stock Exchange (AMEX) on May 28, 2005. The Company qualifies for an AMEX listing under Section 3 of the qualification process. Final approval for listing is expected in early September. The approval to list on the AMEX is contingent upon Storm Cat being in compliance with all applicable listing standards on the date it begins trading on the Exchange, and may be rescinded if the company is not in compliance with such standards.

Management Comments

J. Scott Zimmerman, President and Chief Executive Officer said: "The commencement of our 2005 drilling program and subsequent addition of new production from our Powder River Basin properties is the initial step forward in fulfilling our long term strategy. With Storm Cat's technical expertise in developing unconventional resource, in conjunction with the growing list of quality projects, we anticipate delivering exceptional returns for our shareholders."

About Storm Cat Energy

Storm Cat Energy is an independent oil and gas company focused on exploration and development of large unconventional gas reserves from fractured shales, coal beds and tight sand formations. The company has producing properties in Wyoming's Powder River Basin, exploitation/development acreage in Canada and Alaska, and high-risk, high-reward exploration acreage in Mongolia. The company's shares trade on the Toronto Venture Exchange as "SME".

By Order of the Board of Directors

Storm Cat Energy Corporation

J. Scott Zimmerman, President & CEO

CAUTIONARY STATEMENT: This publication contains certain "forward-looking statements", as defined in the United States Private Securities Litigation Reform Act of 1995 relating to matters such as the Company's drilling and other exploration plans and projected well economics. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "aims", "potential", "goal", "objective", "prospective", and similar expressions, or that events or conditions "will", "would", "may", "can", "could" or "should" occur. Forward-looking statements are based on the beliefs, estimates and opinions of Storm Cat's management on the date the statements are made; they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Storm Cat undertakes no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include, but are not limited to the volatility of natural gas prices, the possibility that exploration efforts will not yield economically recoverable quantities of gas, accidents and other risks associated with gas exploration and development operations, the risk that the Company will encounter unanticipated geological factors, the Company's need for and availability of additional financing, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company's exploration and development plans, and the other risk factors discussed in greater detail in the Company's various filings on SEDAR (www.sedar.com) with Canadian securities regulators and its filings with the US Securities and Exchange Commission, including the Company's Form 20-F dated July 1, 2005.


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

Contact Information

  • Storm Cat Energy Corporation
    Scott Zimmerman
    President And Chief Executive Officer
    1-87-STORMCAT (877-867-6228)
    or
    Storm Cat Energy Corporation
    Paul Wiesner
    Chief Financial Officer
    1-87-STORMCAT (877-867-6228)
    www.stormcatenergy.com