Drilling Progress Texas and Belize

Posted on 10-04-2011 09:10:13

Treaty Energy Communicates Progress in Texas and Belize Oil Drilling Operations

Treaty Energy Corporation (OTCQB: TECO), a growth-oriented energy company in the oil and gas industry, today reported on its operations in Texas and its Treaty Belize Energy Ltd Oil & Gas project in Belize, Central America.

Andrew V. Reid, CEO of Treaty Energy Corporation, reported, “The rework and upgrade program on our Texas operations is proving to be effective. Total rework of some leases and partial rework of certain other leases has been performed on 10 of the 13 leases owned by Treaty.”

Stephen L. York, President and COO of Treaty, the person directing the Texas operations, stated, “To put everything in perspective, Treaty Energy is evolving into a genuine oil company. To date every lease we have in Texas has been evaluated and run wide open until the problem areas could be identified. Over the previous 60 days our rework program has forged ahead reworking, revamping, and upgrading systems and equipment in a proficient and competent approach that will allow consistent, stable production on a monthly basis.”

Mr. York added, “These early evaluations and the corrections of detected problems needed to be addressed in order to proceed forward and substantially improve and increase production rates. The balance of the rework will be completed in October. In addition, Treaty currently has two workover Rigs on site that are completing this initial phase of growing our Texas production. Our current production from 35 wells is about 50 BOPD, with production expected to be in excess of 60 BOPD by the end of October.”

“Finally, on the rework program and production numbers,” Mr. York stated, “all of this has been accomplished during the worst drought and prolonged period of record high temperatures that Texas has seen in many years. Stress on the equipment, electrical systems, flow lines and other operational items was exceedingly high which caused a two step forward one step back scenario, which definitely hindered the rework program and greatly effected the efficiency in achieving additional production.”

With the leases upgraded and all workovers done by the end of this month, Treaty will initiate the drilling phase of the program and continue toward achieving the stated production goal of 1000 BOPD by the end of June 2012.

Treaty indicated that its Texas production could be increased beyond the goals stated earlier by way of additional lease acquisitions. Currently Treaty has two leases under purchase contracts, and is paying for these acquisitions on a monthly basis, and when completed, these two added leases will add immediate production out of 2 wells in addition to providing 12 new drilling locations (PUDs) that Treaty is looking forward to exploring as soon as the acquisition is completed. These 12 new wells could add 100�120 BOPD to the Texas production prior to the end of this year.

As to the Belize project, Mr. Reid stated, “While we had anticipated the drilling of Well #1 in Belize to commence last week, we are moving forward on a steady basis. Comments below from a report by Steve York, Treaty’s President and COO, and Bill Harden, Treaty’s Drilling Superintendent, will clarify the progress being made in Belize.”

As outlined in Mr. York’s report, “After evaluation of the drill site of Well #1 and surrounding terrain several changes have been made. The well pad had to be compacted and large timbers were laid in place to withstand the weight of the Rig and equipment during drilling operations. Rainfall needed to be taken into consideration during the drilling phase and appropriate steps are being taken to prepare for water soak of the drilling pad.

“The rainfall situation also changes the approach which must be taken with our equipment. The initial plan was to use our standard skid-mounted pipe handling racks, skidded mud pump, skidded power plant and skidded ‘dog house’ that we customarily use in Texas oilfields to drag from location to location. We believe the rainfall in Belize could make this impractical and therefore all skidded equipment is being mounted on trailers. A 40 ft. double drop deck trailer will now carry the mud pump and engines, a 53 ft. single drop trailer has been converted to haul the drill pipe, and a white semi tractor has been purchased to haul the trailers from location to location.

“Equipment has been purchased, fabricated or revamped over the last two weeks to make it useable in Belize. Even though drilling regulations allow for lined earthen pits, a set of self contained steel pits (an above ground mud system) has been purchased to expedite the drilling process and also show Treaty’s concern for the environment at the drilling sites. The remaining essential equipment should be completed this week and shipped to Belize via trucks that are bonded and regularly make the trip through the countries surrounding Belize. Treaty expects to use 4-6 trucks for these shipments. Truck time is normally 3-4 days from Abilene, Texas to Placencia, Belize.

“In addition to all the previously explained issues is the lack of available supplies, equipment and services relating to the needs of an oil exploration operation in Belize. Treaty has determined that all supplies, equipment and services should be procured and shipped from the United States. The risk of not making our Belize drilling operation totally self reliant could be detrimental to the timeliness of the drilling program.

“So as to assure complete control of our drilling operations in Belize, Treaty has purchased every item necessary to drill the planned wells from start to finish. These supplies include drilling mud, fluids, casing and tubing, cement, well heads, blowout preventer, pump jacks, downhole pumps, perforation guns, explosive charges, and any other items relevant and necessary to drill and complete the wells.”

Bill Harden and his drilling crew will fly to Belize to commence drilling of Well #1 during the week of October 10th. Once the crew has arrived and drilling commences a daily update will be posted on the Treaty Energy Website, Facebook and Twitter pages.

About Treaty Energy Corporation

Treaty is engaged in the acquisition, development and production of oil and natural gas. Treaty acquires and develops oil and gas leases which have “proven but undeveloped reserves” at the time of acquisition. These properties are not strategic to large exploration-oriented oil and gas companies. This strategy allows Treaty to develop and produce oil and natural gas with tremendously decreased risk, cost and time involved in traditional exploration. For more information go to: www.treatyenergy.com

Forward-Looking Statements:

Statements herein express management’s beliefs and expectations regarding future performance and are forward-looking and involve risks and uncertainties, including, but not limited to, raising working capital and securing other financing; responding to competition and rapidly changing technology; and other risks. These risks are detailed in the Company’s filings with the Securities and Exchange Commission, including Forms 10-KSB, 10-QSB and 8-K. Actual results may differ materially from such forward-looking statements.

Contact:Osprey PartnersTel: 732-292-0982Fax: 732-528-9065osprey57@optonline.net

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