Hemi Energy in New Gas Well Discussions about Its Leases in Sabine County, Texas

  
    
  
  
    
      Hemi Energy Group, Inc. (Pink Sheets: HMGP) acquired three adjacent oil 
      and gas leases with a total of 360 gross acres in Sabine County near the 
      town of Hemphill, Texas. Natural gas prices are currently more than two 
      times higher than at the time the leases were purchased in 2003. The 
      geological formations under Hemi's leases, known as James Lime, Cotton 
      Valley and Travis Peak, are the same formations that are under the major 
      gas field that is now only approximately four miles to the north in 
      Shelby County. In the past these leases have had two producing gas 
      wells, but because of economic reasons they were abandoned in the 1970s. 
      Major oil companies have been developing and producing these natural gas 
      fields for over five years which started approximately 15 miles away and 
      have been steadily trending toward the Hemi leases. Currently new gas 
      wells are being drilled approximately 4 miles north. The width of the 
      proven gas reserves in these geological formations are narrow, being 
      only 5 to 10 miles wide. The average gas well in this major gas field in 
      Shelby County typically produces over 2,000 MCF per day 2(mMCF) or gross 
      revenue of approximately $360,000 per month. These gas wells and gas 
      fields have common characteristics of a slow rate of decline in gas 
      production and have an economically viable life of over ten years.
    
    
      Management is in ongoing discussions with industry partners about how to 
      best develop the leases natural gas reserves on the Hemi leases, which 
      have the same geological formations as the trending gas fields. 
      Information discovered in Hemi's extensive library of geological 
      information and historical information for the area makes management 
      strongly believe there are substantial gas reserves in place. Several 
      financing options are being considered, such as joint venture, 
      specialized exploration/drilling funds, etc., for funding the drilling 
      of a new gas well on the lease.
    
    
      About Hemi
    
    
      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, 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.
    
    
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