TransAmerican Completes Evaluation of Owens-Illinois #2 Well
Announces Land Expansion on the Morton Field
And Financing of $750,000.00
October 3, 2006, Vancouver, British Columbia, TransAmerican Energy Inc. (TSX VENTURE:TAE) ("TransAmerican" or the "Company") is pleased to announce that it has completed an evaluation of properties located in Beauregard Parish, Louisiana with favorable results. Land expansion has increased the Company’s property holdings in Mississippi, and a financing will provide funding to augment oil and gas production.
The Owens-Illinois #2 well, located on the North Gordon Field in Beauregard Parish, Louisiana, was previously completed to 11,280’ into the Wilcox structure. The Owens-Illinois #2 well and the #1 well were acquired based on geologic evidence that multiple zones of “behind pipe reserves” in both the Wilcox and Vicksburg formations exist.
Company Director and Geologist Gilbert Talafuse reports that the Baker-Hughes PDK-100 cased hole evaluation tool has confirmed the presence of multiple productive formations, and says: “These new results will allow us to re-enter on a low-risk basis, and augment the Company’s production in the North Gordon Field.” Preliminary mapping over 100 acres suggests an excess of 1,000mmcf of natural gas in the Wilcox Sand at 11,222’ to 11,238’. Forty feet above are two sand lobes that are confirmed oil productive and should map out to contain more than 130,000 bbls of recoverable oil.
In the shallower Vicksburg structure, at least 3 additional pay zones were also confirmed. Two of these are oil, and one will be both oil and gas productive. The Evaluation report recommends re-completion of Owens-Illinois #1 well, as all confirmed zones of the #2 well are accessible by re-entry into the #1 well. TransAmerican Energy is seeking out rig availability and will then verify a schedule via a news release upon the commencement of this intended re-completion.
Land Expansion
Upon successfully re-entering and drilling to new depth in the Ashland-Rogers 10-4, TransAmerican immediately embarked upon an expansion of leased land over the Morton Field.
Discovery of over 300 feet of pay in the Buckner-Haynesville formation spurred considerable interest in the area and required considerable strategy and negotiation to secure further lands at cost effective prices.
TransAmerican is pleased to announce that an additional 439 acres are now under contract, and it now has a controlling interest in 740 acres in the Morton Field.
Operationally at the Ashland-Rogers 10-4, a readily available low cost rod pump was installed and readjusted several times. The well has still not given a stable production number to report. Installation of an optimal hydraulic pump will replace the rod pump and will be announced once finalized. Testing has produced oil to the tanks and in turn delivered to the market.
Nearby, the Rosenbaum well is a shallower TransAmerican re-entry candidate to re-complete on the Morton Field. Evaluations from the Ashland-Rogers well recommended that the shallower pay zones could be reached cost effectively by re-entry into the Rosenbaum well.
Ron Hughes, President and CEO of TransAmerican stated: “These land acquisition leases in the Morton Field are important, as they expand our holdings around the Ashland Rogers 10-4. Together with the announced Evaluation Report on the Owens well, these properties demonstrate the Company’s strong commitment to building a productive oil and gas asset portfolio for its shareholders.”
Financing
The Company further announces the negotiation of a private placement of up to $750,000 with certain placees, subject to receipt of acceptance by the TSX Venture Exchange (the “Exchange”). These funds will be raised by the Company issuing up to 7,500,000 Units at a price of $0.10 per Unit, each Unit consisting of one common share and one share purchase warrant, each warrant entitling the holder thereof to purchase one additional common share, exercisable for a period of one (1) year from the date of issuance at a price of $0.15 per share. If over a period of twenty consecutive trading days commencing four months after the issue of the share purchase warrants the weighted average closing price of the Company’s shares as traded on the Exchange exceeds Cdn. $0.30, then TransAmerican may give notice in writing to the holders of the share purchase warrants that the share purchase warrants shall expire at 5:00 p.m. (Vancouver time) on the 20th business day following delivery of such notice unless exercised by the holder of the share purchase warrants prior to such time.
Proceeds of $750,000 raised from this private placement will be used toward exploration and development of the Company’s oil and gas properties located in Mississippi and Louisiana, and for general working capital.
The Company may pay finders’ fees in connection with the private placement in accordance with the policies of the Exchange.
Please visit the Company’s website at http://www.transamericanenergy.com
ON BEHALF OF THE BOARD
Ron Hughes, President
CONTACT:
TransAmerican Energy Inc.
Ron Hughes, President
Toll Free: 1-888-945-5056
[email protected]
The TSX Venture Exchange has not reviewed and does not accept responsibility
for the adequacy or accuracy of this News Release.
