US Natural Gas Corp, an energy exploration company with operations in the Appalachian Basin, provide shareholders with an update on operations and production activity at the newly acquired Pine Grove oil field located inEdmonson County, Kentucky.

The Company initially placed fourteen of the twenty-five wells into production on three leases. While initial production results were positive, management felt that daily production could be enhanced by routing water production to an alternate injection well. The Company has elected to lay a new 1" flow line to the Wilson injection well and install a new 2 hp water pump. The Wilson injection well is situated on the opposite side of the fault line where the vast majority of the producing wells were drilled.

Currently, nine wells located on three leases have been addressed and remain in production while averaging 10-12 BOD. The majority of work on each well has consisted of replacing fittings, valves, electrical motors, electrical wiring, while some have necessitated more in-depth work such as replacing tubing and down-hole pumps. The remaining 16 wells located on four leases will be addressed in a similar step by step approach over the next 60 days.

Management believes that its previous estimate of 22 BOD is conservative based on current results from the limited number of wells in production and future projections from additional wells to be placed into production.

Tags: US Natural Gas Corp.