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Montello Resources (TSX.V:MEO) - Drilling Down The Devils Throat

Montello Resources (TSX.V:MEO an oilproduction from a domestic source, it is
and gas exploration firm based inlikely that Tennessee Oil and Gas will
Calgary, Alberta, potentially has a verybe predisposed to accommodate Montello
big problem on its hands. Its the kindin its application for additional drill
of problem most junior explorers onlypermits.
wish they had.In the August monthly newsletter of the
The company is in the last leg ofTennessee Oil and Gas Association, the
drilling on the John Bowen #2 test welllead article quotes Montellos intentions
in Tennessee, just over a mile from thefrom the companys own web site, which
site of the now notorious Pryor Oilseems to demonstrate local support for
blowout, after a drill penetrated aMontello.
formation at 2,400 feet that was underThere are good reasons why major oil
an estimated 2200 pounds per square inchcompanies have steered clear of
of pressure. The resulting explosion ofTennessee. About 215 million years ago,
condensates blew the derrick into theunder the heat and pressure of a
air, and by the time the EPA showed upcontinental collision, the rocks in
to take control of the scene, the gushernorthern Tennessee began to bend. When
had flowed at rates of up to 12,000 boethey broke in a series of long, jagged,
a day!parallel lines oil and gas migrated
Pryor Oil was all but annihilated by thefrom deep in the Earth into cracks and
legal and cleanup costs, and for yearsfolds in the rocks. Prospectors in
afterwards, the Tennessee Oil and GasTennessee spend lifetimes tracing the
Authority banned any further explorationpatterns of ancient breakage; they call
in the region.it "chasing fractures."
That was over 5 years ago, and it hasThat makes the reservoir like the one
taken that long for Montello presidentthat produced the Pryor gusher a rarity,
Bill Cawker to get the companys ducks inand big oil companies dont like to waste
a row to take another shot at thetime on such locations. Drilling is
monster formation.shallow and cheap here, compared with
When it came to putting a propertyTexas or Oklahoma, but the biggest
package together in Tennessee, fractureddiscoveries have topped out at 1,000
ownership and obtuse propertybarrels a day, a payoff too small to
configurations were enough to alienateattract large companies.
all the usual American Big Oil suspects''There are thousands of acres east of
for a well with potential of the Johnthis that have never been drilled,''
Bowen.added Alan Murrell, one of the owners of
The reality is that highly pressurizedSoutheastern Energy, the company that
formations like the one under Tennesseediscovered an 800 boe/d well in 2004
are merely a technical challengenear Pickett County.
requiring a strategic approach to'This has been a hot area to drill in,''
sinking a well.he said. ''Tennessee is finally getting
Montello was delayed in spudding thethe recognition it deserves. It's a
John Bowen #2, originally planned forlittle Texas, I've always thought.''
January 2007, due to the lead timeMontello, on the other hand, is drilling
required to organize specializeddeep in an effort to get a broad
drilling equipment for the drillingunderstanding of the geophysical
program. The drilling contractor ischaracteristics of the target ground.
Nabors Drilling USA, a subsidiary ofMontello will be drilling to the
Nabors Industries (NYSE:NBR). Nabors isbasement (Pre-Cambrian) to the depth of
the worlds largest provider of land andthe "Granite Wash Shale to an estimated
platform drilling contact services fordepth of between 7000-9500 feet.
exploration of oil, gas, and geothermalThis article is intended for information
wells.purposes only, and is not a
High-pressure reservoirs arerecommendation to buy or sell the
traditionally drilled with largeequities of any company mentioned
overbalanced margins to minimize theherein. It is based on sources believed
risk of unplanned reservoir inflow. Theto be reliable, but no warranty as to
high pressures associated with theseaccuracy is expressed or implied. The
influxes can result in larger kickopinions expressed in the article are
volumes, reduced reaction time andthose of the author except where
consequently, greater risk. Challengesstatements are attributed to individuals
associated with these overbalancedother than the author, in which case the
margins serve to increase loss ofopinions are those of the individual to
circulation risk, resulting inwhom they are attributed.
high-pressure kicks, differentialThe author and are not shareholders in
sticking and wellbore damage, never mindthe companies herein mentioned, and the
environmental accidents like the oneauthor, as an employee of Resourcex
involving Pryor Oil in 2002.Publishing Corp is expressly prohibited
Domestic supplies of hydrocarbon energyfor owning any securities about which
are a new priority for George Bush andthey may write for a period of 30 days
the U.S. government. The upside forprior to and 30 days after initial
Montello is that should this first wellpublication of the article in which the
result in the safe oil and gassecurities of any company are mentioned.



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