After encountering hydrocarbons below the intermediate casing in the Morgan Highpoint #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 # 4 Test Well location. Montello is now mobilizing additional safety and under balanced equipment to be placed on the Morgan Highpoint # 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 # 3 Test Well. Although we cannot definitively state that we have a commercial well, we are pleased with the results that have been encountered in the Morgan Highpoint # 3 Test Well to date. It is anticipated that the Morgan Highpoint # 4 Test Well will spud this week once all regulatory approvals are in place.

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