Montello finds hydrocarbons at Morgan Highpoint No. 3

2008-03-10 11:59 ET - News Release

Mr. William Cawker reports

MONTELLO SUSPENDS DRILLING OPERATIONS AFTER ENCOUNTERING HYDROCARBONS IN MORGAN HIGHPOINT # 3 TEST WELL, MORGAN COUNTY TENNESSEE

Montello Resources Ltd.'s participating interests in the Morgan Highpoint No. 3 and No. 4 test wells are as follows: Montello, as operator, is paying 15 per cent of all costs associated with both the Morgan Highpoint No. 3 and No. 4 test wells to earn a 35-per-cent interest in the associated production spacing units. Austin Developments Corp. is paying 20 per cent of the costs to earn a 30-per-cent interest, Blackrock Petroleum Corp. is paying 60 per cent of the costs to earn a 30-per-cent interest and Park Place Energy Corp. is paying 5 per cent of the costs to earn a 5-per-cent interest.

The Morgan Highpoint No. 3 test well, located in Morgan county, Tennessee, is strategically located approximately one mile west of the John Bowen No. 1 and No. 2 wells and one mile northwest of the Howard White No. 1 well. From a geological standpoint this is significant as the Howard White No. 1 well, that was drilled in 2002, resulted in a blowout flowing over 500 barrels per hour of light crude oil (12,000 barrels of oil per day for two days) before being capped. Environmental and legal issues relating to the blowout have to date precluded the redrilling of the Howard White No. 1 well.

After encountering hydrocarbons below the intermediate casing in the Morgan Highpoint No. 3 test well, as a precautionary measure, Montello has secured the well and suspended operations. The drilling rig has been released and moved to the Morgan Highpoint No. 4 test well location. Montello is now mobilizing additional safety and underbalanced equipment to be placed on the Morgan Highpoint No. 3 test well after which drilling operations will recommence.

Montello and the joint venture partners are encouraged to have encountered hydrocarbons in the Morgan Highpoint No. 3 test well. Although the company cannot definitively state that it has a commercial well, it is pleased with the results that have been encountered in the Morgan Highpoint No. 3 test well to date. It is anticipated that the Morgan Highpoint No. 4 test well will spud this week once all regulatory approvals are in place.

We seek Safe Harbor.