Fellows Energy Ltd. agrees to acquire production in Powder River basin

Fellows Energy Ltd., Broomfield, Colo., has signed a letter of intent to acquire from a private entity the operating management interest in 41 producing coalbed methane wells in the Powder River basin in Wyoming, interests in 126 wells scheduled to come into production during the next year, and interests in nearby undeveloped acreage. The working interest eventually will be 20-30%.

Aug. 12, 2004

By OGJ editors

HOUSTON, Aug. 12 -- Fellows Energy Ltd., Broomfield, Colo., has signed a letter of intent (LOI) to acquire from a private entity the operating management interest in 41 producing coalbed methane wells in the Powder River basin in Wyoming, interests in 126 wells scheduled to come into production during the next year, and interests in nearby undeveloped acreage. The working interest eventually will be 20-30%.

Fellows' recently acquired an option to purchase a 65% interest in the 183,000 acre Overthrust project in northern Utah, and is actively negotiating a number of additional projects in the western US with several projects under review.

These include projects submitted by third parties and those presented under its agreement with Thomasson Partner Associates (TPA) of Denver. The agreement calls for TPA to present to Fellows an average of eight projects per year with an area of interest 10,000-80,000 acres per project. Fellows will have the right under the agreement to acquire a 50% interest in each project presented, with the other 50% to be offered to a major industry partner.