Corporate Profile: Petrol Oil and Gas, Inc.

Disclaimer: Corporate Profile as prepared and approved by featured company.

Petrol Oil and Gas, Inc. (OTCBB: POIG) is an oil and gas producer whose primary focus is the development and production of oil, gas, and Coal Bed Methane (CBM) in Eastern Kansas and Western Missouri.

During the past three years Petrol acquired a large mineral acreage in Eastern Kansas and Western Missouri that was geologically suitable for CBM development, as well as a producing property with 71 wells in the prolific Thayer Gas Field in Southeast Kansas. The ‘Petrol-Neodesha’ property acquired in November 2004 currently produces about 3,000 Mcf of gas per day, which is projected to equate to gross revenues at today’s prices of approximately $9.6 Million during 2005.

The Company’s intention is to enhance production from its current producing properties, and to continue an aggressive drilling program, funded from operations, throughout fiscal 2005.

Petrol’s choice of locale.

When Petrol entered the CBM industry, its contention was that eastern Kansas and western Missouri were obvious but overlooked regions for CBM production. It was known that this region sat directly atop the Western Interior Coal Basin, more specifically the Cherokee and Forest City Basins and the Bourban Arch that connects the two. According to the Company’s highly experienced geologist, Bill Stoeckinger, the area, although undeveloped, had enormous CBM potential.

Bill’s contention has since been sustained by a 2004 report from the Kansas Geological Society, which states that “some shallow coals at less than 700 feet in depth have unexpectedly large gas contents (>100 scf/ton) exceeding that of immediately deeper coals.” The Society has published estimates of 2.0 trillion scf of Original Gas in Place for the Bourbon Arch, the predominant area of leasehold rights for Petrol.

Petrol’s drilling program in Coffey County is generating promising results, as it has encountered up to a dozen gassy coal zones ranging from one to six feet thick.

There is also an extensive gas distribution infrastructure already in the area, with interstate gas pipelines from four major companies running directly through Petrol’s leased properties. These pipelines provide gas transportation conduits to America’s biggest gas markets, which means that Petrol will be able to sell its production for top dollar.

Because the gas bearing coal seams in eastern Kansas are relatively shallow, Petrol’s drilling and completing costs are comparatively low. The costs to drill, test, and complete a typical well in 2004 were in the range of $100 to $110 thousand. The Missouri CBM is even shallower than in Kansas and thus typical wells costs are reduced to about $40,000 to $50,000. Although not without regulation, the Kansas state government, as well as associated local governments, view CBM production favorably and support expansion of the industry as a means to economic growth and proper resource development.

The Industry’s view:

The Company’s initial conviction regarding a CBM play in Coffey County has been supported by the arrival of leading Oil and Gas companies entering the surrounding area. Quest Resources, (OTC symbol: QRPC), a large independent gas producer recently acquired CBM wells from Devon Energy for $126 Million, and now have approximately 700 CBM wells in the Cherokee basin of southeast Kansas and northeast Oklahoma. Layne (Nasdaq symbol: LAYN) states their Energy Division will focus on Exploration and Production on CBM properties, and they are forecasting spending $8,000,000 on CBM development in fiscal 2005.
 
Disclaimer: Corporate Profile as prepared and approved by featured company.