Winslow Resources Inc.
TSX VENTURE : WLR

Winslow Resources Inc.

September 29, 2005 16:06 ET

Winslow Operations Update

CALGARY, ALBERTA--(CCNMatthews - Sept. 29, 2005) - Winslow Resources (TSX VENTURE:WLR)

Leader, SK

In the first quarter Winslow entered into a large-scale farmout agreement with a major oil and gas company covering 44 contiguous sections of land to explore for and develop multi-zone Milk River formation gas in west-central Saskatchewan. Winslow, as operator, drilled 12 wells to test the Milk River formation during the second quarter. The drilling program was completed on schedule and on budget, with eleven potential gas wells and one well abandoned due to drilling equipment stuck in the hole. Upon review of the cased hole logs, a number of prospective zones within the lower and middle Milk River formation were identified and grouped into four intervals for fracture stimulation and testing.

The Company carefully tested all prospective reservoir zones within the Milk River formation which provided the Company sufficient data to assess each potential reservoir zone and make decisions on improving fracture stimulation methods as the program progressed.

The multi-zone completion program and evaluation of both the lower and middle Milk River was finished in mid-September. The main reservoir potential appears to be in the lower Milk River. Initial flow rates were significantly higher, however, stabilized twelve-hour flow test data from the lower Milk River zones indicate rates between 7 and 132 mcf/d with the average of the best four wells at 105 mcf/d.

The eleven wells are all capable of gas production with some variation between wells as to expected flow rate and deliverability over time. The initial drilling program has allowed the Company to identify areas of the property with the highest potential for sustainable gas and allow for strategic placement of development wells in the upcoming 12-well phase two drilling program.

The logging and completion programs had been hampered by heavy rainstorms throughout June, late August and early September. The Company is waiting for surface conditions to improve to finish field operations and prepare for phase two of the drilling program, which will be initiated in the fourth quarter.

A pipeline is favorably situated across the southern end of the acreage and will provide a starting point for future expansion. Infrastructure planning is being conducted and assessed. The wells are expected to be tied in during the first and second quarters of 2006.

Winslow has earned 24 sections of land and is negotiating farmin terms and pursuing additional land acquisitions prior to exercising the option to drill an additional 12 wells to earn the balance of the farmin lands and the 12 existing shut-in Milk River gas wells on the properties. Winslow will have also earned a 50% interest in all deeper P&NG rights.

Viewfield, SK

The Company agreed to drill a test well with it's operating partner in the third quarter. The three-leg horizontal well was spud in mid August to test the Bakken formation and took 23 days to drill. The well was chemically treated and swabbed over several days to induce fluid flow. The well was put on pump as a means to recover drilling fluid and induce hydrocarbon inflow. To date, drilling fluid is still being recovered. The Company is reviewing the data to determine other methods to stimulate the well. Winslow has a 50% interest in the well.

Hairy Hills, AB

The Company's Hairy Hills gas well in central Alberta was tied-in during the second quarter but has been shut-in since July pending gas plant expansion as well as future gas capacity. Winslow is considering building a 1.5 mile pipeline connecting to a alternative gas gathering system capable of handling the production immediately. Winslow has a net 25% interest in the well.

Tindastoll, AB

The Company's Edmonton Sand gas well was tied-in during the third quarter. Production was slowed due to gas plant upgrades as well as poor weather. The well has been improving and is currently producing near 150mcf/day. Winslow has a 100% interest in the well.

Coal Valley, AB

Winslow entered into a Joint Venture Agreement in the second quarter with two other industry participants to explore and jointly develop CBM properties in west-central Alberta. The first test well was spud in the second quarter. The well was completed and tested in stages and was fully completed near the end of the third quarter. The potential Ardley CBM well has been suspended due to minimal gas inflows upon fracture stimulation of the coal seams. The Company believes the wellbore may have been damaged during drilling, which may have contributed to poor reservoir performance. However, gas content data from well cuttings suggest significant gas in place. An additional location is being considered for the fourth quarter using different drilling and completion methods.

The Company retains a 27.8% working interest in the first well which includes three sections under the 2004 option agreement and will retain a 25% interest in the next well being drilled to hold five additional contiguous sections of farmin lands in Coal Valley.

Upcoming events

Winslow has signed an agreement with a major oil and gas company to drill a Horseshoe Canyon CBM well near Chigwell, in central Alberta. The well was spud on September 23 to test the Horseshoe Canyon formation and Edmonton Sands. Well logs indicate 16 meters of net coal within the Horseshoe Canyon formation. The coals will be fracture stimulated and tested in early October. Additional locations are pending results of the first well. Winslow will have a 100% working interest BPO and a 65% interest APO.

The Company has also entered into negotiations to drill an offset well to a Sawtooth formation test that was originally drilled in the 1990's. The original well had a significant closed-chamber DST of over 2 mmcf/d but was later abandoned after completing the zone due to water invasion. Well log data indicates five meters of gas pay over water and it is suspected the cement job on the original well was inadequate or poorly completed. Winslow feels an offsetting well designed open hole completed the top of the Sawtooth formation may deliver significantly better results. Winslow will have a 100% BPO and 60% working interest APO in the well.

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