Duma Energy announces drilling and completion of new oil well

Source: Duma Energy

Duma Energy Corp. (OTCBB:SGCA.OB) announced today that its Palacios No. 1 well has been successfully drilled to 6,830 feet, completed, and is now producing into the sales line. The well is currently producing an average of 275 Mcfpd (thousand cubic feet of gas per day) and 1 Bcpd (barrel of condensate per day) with 610 psig flowing tubing pressure.

"We are very pleased that reserves and cash flow will increase as a result from participating in the Palacios No. 1 well. The Tinney Sand is a well known producer throughout the area and should produce similar to other Tinney wells. Additionally, we have the future prospect of three possible oil sands, all of which are located on our leased acreage. We anticipate the Palacios lease to be a contributor to our corporate growth for years to come," noted Jeremy G. Driver, President and Chief Executive Officer of Duma Energy Corp.

The well is producing from the Tinney Sand which is located in the upper portion of the Hockley series of sands in South Texas. Twelve feet of the Tinney interval were perforated. The Tinney Sand was found to be 60 feet high to the Sexton Palacios No. 1, an offset well approximately one mile away that ultimately produced 730,000 mcf and 3,836 barrels of condensate. In addition to the Tinney Sand, three Frio sands were identified with mud log oil shows between 3,800 feet and 4,050 feet. These sands have produced oil in other surrounding fields and will be tested at some future date.

The lease acreage associated with the Duma's Palacios No. 1 well is 460 acres for all depths, and is held by production from the well.

Penasco Petroleum, Inc., a wholly-owned subsidiary of Duma Energy Corporation, has 5.5% working interest in the Palacios No. 1 and associated leasehold acreage. Harper Hefte, Inc. is the operator.

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