United American Petroleum Drills Ahead in Bastrop County

United American Petroleum Drills Ahead in Bastrop County

Friday, April 15, 2011
United American Petroleum Corp.

United American Petroleum provided an update on its drilling development program for its Bastrop County, Texas operations. The Company's Gabriel Rosser Project consists of two strategic phases. Phase 1, drill new proposed locations and begin initial pressurization of existing wells and Phase 2, continue development of undeveloped acreage on the Gabriel lease, which from geophysics indicates an undeveloped serpentine mound to the east of the existing Gabriel wells.

The Gabriel Rosser Project is a serpentine development and re-pressurization operation consisting of two mounds, on adjacent acreage; the Gabriel and Rosser lease. Phase 1 consists of new development drilling in the Gabriel mound and secondary pressurization of a developed Rosser serpentine mound. The Company will continue to produce its Rosser #4 well and will equip the Gabriel #9 well for immediate production. Upon completion, the Company will drill the Gabriel #16 well, an offset and replacement well, to the Gabriel #4 oil well. The expected initial production is estimated to be approximately 100 to 200 BOPD and 50 to 100 MCFGPD. United is currently in the process of obtaining a permit to drill the Gabriel #16 well.

The Gabriel #4 well initially produced at 426 BOPD from a 102 ft. thick serpentine section. The total depth for the new well should be approximately 3,180 ft. and United expects serpentine sections of 150 to 170 ft. thick. The Gabriel #16 location had high surface geochemical hydrocarbon readings of 68 ppm (parts per million). Currently, Gabriel #4 has 400 psi on casing, and 1,400 ft. of oil in casing above perforations at 3,050 ft. However, the Gabriel #4 has water encroachment from the Austin Chalk perforations below the serpentine and the Company will need to isolate the water to optimize production from this well. Current surface casing pressure is 400 psi, which is all natural gas.

In February 2010, oil was found in the Gabriel #4 well at a depth of 1,320 ft., or 1,700 ft. above the perforations. As oil is produced from the new Gabriel #16 well, gas released from the oil will be used to begin gas pressure maintenance on a portion of the mound complex. We believe an additional (2) wells could be drilled near the Gabriel #4 and #16 locations.

United will need to hook up a compressor at the Rosser #2 well and begin pressurization of the Rosser mound. This secondary recovery gas injection produces from GAGD (gas assisted gravity drainage) and has proven to be effective. This will begin to pressurize the Rosser mound and increase production in the existing Rosser #4 well once the squeeze has been completed. Upon completion, the Gabriel #17 will be drilled near the Gabriel #4 and Gabriel #16 locations. We believe an additional 2 to 3 wells could be drilled on the Rosser mound.

Phase 2 consists of expanding the undeveloped portion of the Gabriel lease. A surface magnetometer survey was run over the Gabriel property. Serpentines traditionally have a strong magnetic signature and many mounds have been drilled solely from magnetometer surveys. The magnetometer indicated a magnetic buildup in approximately 160 acres of the Gabriel lease between the Gabriel #3 and Gabriel #4 wells.

Michael Carey, President of United American Petroleum said, "We are very enthused with the results of the project and tests to date. The completion techniques and utilization of the produced gas to re-pressurize the zone makes this project unique in the sense that we could actually reverse the traditional depletion curve and produce more hydrocarbons at an increasing rate as the zone re-pressurizes over time. With these techniques, coupled with the potential for additional drilling locations, we feel this will become a valuable asset to United as well as create a platform for utilization in other areas with similar geological parameters."