Hemi Energy Group, Inc. Kansas and Texas Update

  
    
  
  
    
      Hemi Energy Group, Inc. (Pink Sheets:HMGP):
    
    
      Kansas Leases
    
    
      We are seeing improved response from 53 reworked oil wells which have 
      resumed production in October. The dewatering of the Purcell, Tebbens, 
      Orth-Silvey, Reno and Bennett leases has yielded increased oil 
      production, and nine of the wells are reporting improving natural gas 
      cuts. This sets the stage for a continued increase in oil production as 
      the gradual dewatering of the Woodson County leases, continues. Simply 
      put, in the new wells we drilled during 2007, we noted the oil water 
      contact point had changed from when our older mature wells were drilled 
      and completed. The influx of formation water, raised the oil water 
      contact point above the existing well perforations, which displaced oil 
      with water. The dewatering of this formation has advanced to a point 
      where increased oil production is now seen at the producing wells. As of 
      today we have lifted and disposed of over 10,000 barrels of water from 
      the producing formation. We have maintained a water injection rate at 
      200 barrels of water per day. Additionally, we have noticed an increase 
      in natural gas pressures in the southern and western areas of these 
      leases. To date, we have not attempted to sell this natural gas, 
      choosing instead to leave it in place in order to help with the 
      re-pressurization of these oil fields.
    
    
      The Montgomery County lease currently has three mature oil wells that 
      have returned to production on the Sturgeon lease. The new well drilled 
      on the Sturgeon lease earlier this year primarily showed more amounts of 
      natural gas than oil in the lower Bartlesville formation. Given the lack 
      of natural gas infrastructure and pipelines in the area, this natural 
      gas cannot be economically produced when compared to crude oil. 
      Therefore we are preparing to come uphole and recomplete the well in the 
      upper Bartlesville payzone. This recompletion work is expected to be 
      conducted in January, pending weather and equipment availability issues.
    
    
      Texas Leases
    
    
      In December we acquired 125 acres of property in Throckmorton County, 
      Texas (the Bailes lease) on which the discovery well was located. We 
      have the exclusive opportunity to lease approximately 700 acres of 
      additional land contiguous to our lease. There are three mature wells on 
      this lease, and each produced more than 100 barrels per day for several 
      years. They were abandoned for economic reasons in the mid-1980s, 
      although each was producing approximately 30 barrels per day (which is 
      consistent with the normal Texas decline curve for this type of 
      formation). Management's experienced opinion is that re-pressurization 
      of this geological formation has occurred after more than 20 years of no 
      production or new wells on this lease. We have detailed drilling records 
      and well logs of the three wells that show three to four producible pay 
      zones.
    
    
      Several oil and gas companies have expressed interest in acquiring or 
      developing our lease acreage in Sabine County, TX. and we are currently 
      exploring all options (joint venture, farm out, partnership and royalty 
      positions) in the development of our leases that possess proven gas pay 
      zones. We have the well records from the drilling & logs that shows 
      detailed information about the multiple gas pay zones.
    
    
      We have acquired five-year leases on the Barnett Shell formation located 
      in urban Fort Worth. We are actively negotiating with several other 
      owners to acquire additional leases. These leases are wedged between two 
      major urban drilling programs that are being developed and expanded by 
      two large New York Stock Exchange oil companies with home offices in 
      Fort Worth and Oklahoma City. Each gas well in the Texas Barnett Shell 
      formation is a multi-million dollar project and requires large acreage 
      spacing in order to be legally and economically produced. Management 
      strongly believes our leases will be needed, integral parts of the 
      pooling these major development drilling programs.
    
    
      Hemi Energy Group is an independent crude oil and natural gas producer 
      employing a unique business model capitalizing on technological advances 
      to exploit mature fields with millions of barrels of proven oil 
      remaining in the ground, using attractive lease/royalty packages Hemi 
      has secured in its history of tens of thousands of acres of productive 
      domestic projects. The company's forward-thinking strategy has placed it 
      in an enviable position at a time when prices and global demand for oil 
      continue to rise.
    
    
      Building on decades of experience in enhanced oil recovery, Hemi has 
      successfully amassed a substantial and attractive portfolio of these 
      high quality domestic properties. By streamlining operations through 
      cutting-edge technologies, Hemi has the ability to operate more 
      effectively and efficiently than larger oil companies.
    
    
      "Safe Harbor" Statement under the Private Securities Litigation Reform 
      Act of 1995
    
    
      Statements in this press release relating to plans, strategies, economic 
      performance and trends, projections of results of specific activities or 
      investments, and other statements that are not descriptions of 
      historical facts may be forward-looking statements within the meaning of 
      the Private Securities Litigation Reform Act of 1995, Section 27A of the 
      Securities Act of 1933 and Section 21E of the Securities Exchange Act of 
      1934. Forward-looking information is inherently subject to risks and 
      uncertainties, and actual results could differ materially from those 
      currently anticipated due to a number of factors, which include, but are 
      not limited to, risk factors inherent in doing business. Forward-looking 
      statements may be identified by terms such as "may," "will," "should," 
      "could," "expects," "plans," "intends," "anticipates," "believes," 
      "estimates," "predicts," "forecasts," "potential," or "continue," or 
      similar terms or the negative of these terms. Although we believe that 
      the expectations reflected in the forward-looking statements are 
      reasonable, we cannot guarantee future results, levels of activity, 
      performance or achievements. The company has no obligation to update 
      these forward-looking statements.
    
    
      For additional information please go to http://hemienergy.com.