SOURCE: UnionTown Energy Inc.

UnionTown Energy Inc.

May 19, 2011 06:30 ET

UnionTown Energy Inc. (UTOG) Announces Operational and Financing Update

Planned Drilling Programs and Financing to Move Company Forward to Prove up Reserves and Commence Production

BILLINGS, MT--(Marketwire - May 19, 2011) - UnionTown Energy Inc. (OTCBB: UTOG) is pleased to provide this operational update on the planned drilling programs and financing the company currently has underway. The near-term objective is to prove up the indicated reserves to realize their full value potential and to bring the Company to a producing state.

The Company is pleased to report that it has assembled 4 properties in its first phase of property acquisitions and advanced the required funds to close the transactions. Please refer to our website, www.uniontownenergy.com, for descriptions of the properties. Combined, the properties total over 45,000 acres with excellent oil and gas prospects. Third-party geological reports together with previously drilled test wells and seismic show potential ultimate recoverable reserves of approximately 133,000,000 barrels of oil equivalent on 3 of the 4 properties. A geological report is now being assembled on the 11,000-acre Teton River property, which will only further increase the Company's reserve total.

The Teton River acquisition appears to provide us with an ideal return-on-investment proposition. The property comes with 5 drill targets that have been permitted and are ready to drill. The first location is about 30 feet from a previously drilled test well that was producing 49 barrels a day. Each well can be drilled for $200,000. As soon as the closing documents are finalized and the lease assignments have been completed, the Company plans to make this drill program a priority. We are now making arrangements with a drilling crew to move this project forward. Drilling could commence in the June time frame. In our view, this is a very low risk project. Production results could occur as early as July.

The next drilling priority is the New Miami project. The property and first well location are currently being prepared to receive the drilling rig. The operator has reported that the drilling start date is scheduled for May 25. An $800,000 horizontal well, which has already been funded, is planned for on this property. Horizontal wells in the area have been reported to come in at 300 barrels a day. We are positioning our first location between 2 previously drilled successful wells. Again, we consider this prospect to be a low-risk opportunity with ideal return-on-investment potential. The drilling and completion schedule is expected to occur over 60 days from the drilling start date.

Our current financial resources provided from our first $3,000,000 private placement are adequate to support these initiatives. We are in the process of pursuing additional financing to move these first 2 projects further and fund the development program on the Darby Block.

The Darby Block is a 25,000-acre property surrounded by several oil and gas majors -- including Shell, Exxon, Chevron and Amoco -- that are currently in production.

We are currently preparing to acquire the 3-D seismic that has been shot on this property. This data will help determine the reserve and identify our initial drill targets. We are very excited about the potential of the Darby Block.

Our fourth property, the Musselshell, was our first acquisition and sits atop an estimated ultimate recoverable reserve of 10.4 million barrels of oil. We plan to test the much-talked-about Heath formation. See the following link: http://stocks.investopedia.com/stock-analysis/2011/Heath-Formation-Moves-Forward-EOG-MDU-COG-END-VOG0513.aspx?partner=YahooSA.

We have been approached by a third-party company with a proposed a farm-in arrangement, which we are now considering in order to bring this project forward. The company would finance and execute the work to earn a working interest in this property.

Experienced and sophisticated individuals who understand oil and gas geology agree with us that these properties have excellent potential and are company makers. Our management, led by industry veteran Darren Stevenson as UnionTown's CEO, is committed to making this happen.

"An employee stock-option plan is being implemented to attract talented individuals and reward those who contribute to our growth and success," said Darren Stevenson. "The next ninety days will be very exciting for UnionTown."

About UnionTown Energy
UnionTown Energy Inc. is focused on the acquisition, exploration, development and production of oil and natural gas properties. Our strategy is to build a portfolio of properties in known and producing oil and gas fields throughout North America. We recently completed acquisitions of the Musselshell Property, New Miami Property and Darby Block Property, and we're now moving rapidly to bring the first wells to production. For more information about our company, please visit www.UnionTownEnergy.com.

Safe Harbor
Except for historical information contained herein, the matters set forth above may be forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ from those in the forward-looking statements. Words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to UnionTown, the potential reserves, production and ability to establish wells on the Musselshell, New Miami Prospect, Darby Block Property, and the Teton River, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of management, as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors such as the nature of business negotiations, the operational details of oil and gas properties, the competitive environment within the industry, the ability of UnionTown to expand its operations, the level of costs incurred in connection with UnionTown's expansion efforts, economic conditions in the industry and UnionTown's financial strength. UnionTown does not undertake any obligation to update such forward-looking statements. Investors are also directed to consider all other risks and uncertainties.

Contact Information

  • Contact
    Patrick Smyth
    UnionTown Energy Inc.
    Phone: (702) 530-3241