Hemi Energy Group Releases Kansas Production Results
Wednesday January 9, 12:38 pm ET

FORT WORTH, Texas--(BUSINESS WIRE)--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 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.