Montana Exploration Corp. announced preliminary results of the three vertical exploration wells it has drilled with its Denver-based joint venture partner in Blaine County, Montana. The wells were drilled within a 45 square mile 3-D seismic program that was conducted on a portion of the company's approximately 150,000 net acres on the Shaunavon trend in Montana.

The Shaunavon trend in Saskatchewan has produced over 300 million barrels out of in excess 4 billion barrels of oil in place. All three vertical wells encountered live oil in the Shaunavon formation and provide strong encouragement to Montana to proceed with a commercial program to develop the Shaunavon. Two wells were cased to be completed in the Upper Shaunavon.

The company has analyzed core and log data in conjunction with an internationally recognized independent petrophysicist with substantial experience in the Shaunavon in Saskatchewan. Porosities, permeabilities and oil saturations are similar to those encountered in Shaunavon wells in Saskatchewan and in the Bowes Field located 10 miles south of Montana's current drilling. Initial wells have been drilled vertically to evaluate the presence of oil and it is likely that development will be conducted by drilling horizontal wells similar to those being drilled at Bowes Field.

All Lower Shaunavon production in Saskatchewan is from horizontal wells. Well 1 penetrated both Upper and Lower Shaunavon zones and a 5-foot interval was perforated and the upper zone yielded an approximate 24-hour rate of 15-20 barrels (90% oil cut) unstimulated. The Lower Shaunavon had oil shows in core and on logs over a 40-foot transition zone.

Well 2 encountered 20 feet of Upper Shaunavon, with high oil saturation in the core and a long transition zone with decreasing oil saturation across the next 50 feet into the Lower Shaunavon.