PEMC Announces Farmout Agreement With Questar Exploration

SOURCE:

Pacific Energy & Mining Company

2008-07-15 05:30:00

RENO, NV–(EMWNews – July 15, 2008) – Pacific Energy & Mining Co. (PINKSHEETS: PEMC)

announces its farmout agreement with Questar Exploration and Production

Company , a subsidiary of Questar Corp. traded on the New York Stock

Exchange (Questar). Pursuant to the terms of the agreement, Questar will

initially re-enter its well located in Section 22 to define the reservoir.

Based upon the results of the test well, Questar has the option to drill a

new well with a horizontal component of approximately 2,500 feet in section

21, Township 7S, Range 21E, Uintah County, Utah. The well is to test the

H4a zone of the Greenriver formation at Brennan Bottoms Oil Field. This

acreage is a lease that Pacific has a 7% working interest.

The acreage of the Farmout Agreement will be incorporated into an

approximately 8,000-acre Exploration Unit which will be operated by

Questar. The details of the operating Unit will be finalized after the

reservoir is defined by the test wells and existing well data. To date,

Questar has successfully re-entered and drilled horizontally in its

existing wells at the Brennan Bottoms Unit. Well production rates have

ranged from 120 to 200 bbls of oil per day with minimal water production.

Based upon the results, Pacific Energy will also evaluate the drilling of

horizontal wells to develop the H4A zone in its acreage in the northern

portion of Brennan Bottoms Field, which will not be included in the Unit.

This acreage consists of approximately 1,800 acres.

Well costs are estimated at approximately $2.2 million dollars for a

horizontal well. The formation depth is approximately 6,800 feet.

Pacific Energy estimates that approximately 8 wells will be required to

develop the field.

Pacific Energy is still in negotiations with suitors for the sale of the

company or certain assets including an oil and gas company that is listed

on a major international stock exchange.

About Pacific Energy & Mining:

Pacific Energy is a diversified company that operates oil and gas leases

throughout Utah. It also has non-operated interests in Utah and Oklahoma

and owns a 7% working interest in Brennan Bottoms. The Company is in the

process of unitizing the field with offset leaseholders, the largest of

which is Questar Company. Additionally the Company owns a 16.67% interest

in Mar/Reg Investments, a General Partnership, through which it holds

working interest in oil wells in Altamont Bluebell Oil Field in Utah.

The Company would also like to welcome all shareholders to visit our

website at www.pemc.us for detailed information.

Disclaimer

The foregoing contains forward-looking information within the meaning of

The Private Securities Litigation Act of 1995. Such forward-looking

statements involve certain risks and uncertainties. The actual results may

differ materially from such forward-looking statements. The company does

not undertake to publicly update or revise its forward-looking statements

even if experience or further changes make it clear that any projected

results (expressed or implied) will not be realized.

Contact Information:

Investor Relations
Worldwide Financial Marketing, Inc. USA
Int’l 1 954 360 9998
US 866 360 9998

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