Hemi Energy Group Releases Kansas Production Results

  
    
  
  
    
      Oil production resumed in mid-October and we have been phasing in leases 
      and wells over the past couple of months. In November, 436 barrels of 
      oil were produced and 225 barrels of oil were sold. In December, Hemi 
      (Pink Sheets:HMGP) produced 461 barrels of oil and sold 393 barrels of 
      oil. Not reflected in these numbers was the Bennett lease, which was off 
      line for additional service work. The Company believes that our leases 
      continue to respond positively to our Enhanced Oil Recovery (EOR) 
      programs and stimulation efforts and the Company is on track to produce 
      in excess of 600 Barrels of oil for January. Furthermore, we expect to 
      see increased production near term and throughout the coming year as the 
      EOR program expands across the 1800 acres of leases earmarked for EOR 
      activity and redevelopment.
    
    
      2007 began with us experiencing one of the worst winters in recent 
      Kansas history and the severe weather conditions severely limited the 
      Company’s ability to operate and maintain 
      optimum production from January through February 2007. In late February, 
      as weather and ground conditions improved, Hemi began repairs associated 
      with the winter weather damage. At the same time, we began our infield 
      drilling program needed to optimize recovery of our oil and gas 
      reserves. By April we had completed repairs, resumed production and 
      introduced our (EOR) programs for the Woodson County leases. In late 
      June and early July we experienced some of the worst flooding in Kansas 
      history and Hemi sustained extensive damage to over 90% of the 
      production wells, surface equipment, electrical grid, access roads and 
      infrastructure needed to produce oil. We began immediate repairs which 
      were completed in mid-October 2007. Since resuming oil production, Hemi 
      has performed upgrades of all surface equipment, all-weather access 
      roads, and completed the winterization of the production components. The 
      Company also drilled and completed a waste water injection well. The 
      results of these upgrades and winterization have paid off with minimal 
      disruptions to production and no days lost to weather conditions.
    
    
      In the spring of 2008, Hemi plans to drill a series of new wells to 
      replace less efficient or mechanically inoperable older wells. These 
      2008 wells, which were originally scheduled to be drilled in 2007, were 
      delayed due to the significant repair costs associated with flood 
      damage. Hemi expects that the new wells could significantly increase the 
      effects realized by the EOR program and ultimately oil production. The 
      Company is in final negotiations with several land and mineral owners, 
      contingent on the outcome as to whether or not we acquire additional 
      lease acreage or not, will draw to a close our planned Kansas leasing 
      program and we will enter into the drilling phase in the second or third 
      quarter of 2008.
    
    
      Hemi Energy Group is an independent crude oil and natural gas producer 
      employing a unique business model and 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.