Ky/Tenn Report

Volume 14, Number 8 August 2007

MONTELLO RESOURCES PERMITS DEEP TEST-Montello Resources Ltd. (TSX Venture: MEO) has permitted a 7,500 test in the Twin Bridges Quad in Morgan County. The John Bowen #2, Permit #11469 is located in Section 7-5S-57E, 3150 FSL-2350 FEL. Houston-based Nabors Drilling USA, the drilling contractor, moved in the rig with a reported 50 loads of equipment, including a triple rig. According to the company, all pre-drilling preparations have been completed, including drilling the rat-hole. The test is expected to be to basement (Pre-Cambrian) to a depth of the Granite Wash Shale. The company says it will be testing and evaluating as they drill under-balanced and plans to run a full sweep of logs. The company also notes on its web site that "With Drilling success and Montello's accumulation of strategic acreage for this program, we wish to initiate a multiple well program and "hunt for Elephants" utilizing a minimum spacing unit of 160 acres per well.

FALL TOGA MEETING, SEPT 13TH, OAK RIDGE COUNTRY CLUB-The fall TOGA meeting with be held Thursday, September 13th at the Oak Ridge Country Club, hosted by Griffith Services. The Board of Directors will meet prior to the 6:30 p.m., reception and dinner. The Doubletree, Oak Ridge, has a special $99 rate for TOGA members. Cut off date for the special rate is August 30th. Call the hotel at 865-481-2468 and mention TOGA to get the special rate.

SOMERSET REFINERY STATUS REMAINS UNCERTAIN- The attorneys for the new owners asked us to enclose bankruptcy court documents informing producers how to file a claim for the oil sold to SKPC that was not paid for. However, the new owners held a series of meetings last week with producers telling them they were asking the court to terminate the bankruptcy proceedings. In the meantime, the previous owners have a suit moving through the court system that would set the sale to the current owners aside and allow them to bring in new investors and managers. Stay tuned.

BARRETT OIL PURCHASING GROWING TO MEET DEMAND- Albany, Ky-based Barrett Oil Purchasing said in a recent letter to landowners and operators, " We once were a three employee, two truck family run company (we are still a FAMILY run company.) But as of the end of July, when our latest 2 new tractors and tankers arrive, we will have 27 great employees and 18 trucks that we are very proud of. And as the need arises more trucks will be ordered and more employees will be hired.

"We are writing this letter so you are personally informed of the improvements we have in the process of completing, that will make our company more efficient in hauling your oil. Barrett Oil Purchasing will be running 2 shifts of tankers to Ashland, Ky, by the middle of August. We are presently moving the maximum amount with 1 shift, but the 24 hour a day/7 day a week unloading facility that is currently being built will give us the ability to move our oil out of the fields and into the refinery even quicker."

STATE ISSUES WATER POLICY STATEMENT--Disposal of Certain Produced Water (Salinity 2,400 mg/l and no visible oil Produced Water (Pit Water) requiring disposal may be handled in the following manner if the salinity concentration is the same or less than the above number. The salinity must be measured prior to each water removal. The water may be pumped into a truck or other vehicle equipped with a tank and spraybar. It can then be sprayed on loose aggregate surface roads as long as the water being disposed does not enter waters of the state of Tennessee. Water meeting the above requirement may also be spray irrigated on site. Like road application, irrigated releases may not result in ponding or runoff to a stream.
Transport for Deep Well Injection-The facility operator may elect to transport the water off-site for injection into a well approved for disposal

FLUID FLOW JOINS TOGA-Fluid Flow Producers, Inc., is an authorized distributor for Cameron Measurement Systems, manufacturer of the Barton Chart Recorder, Scanner series of electronic flow measurement instrumentation, the differential measure cone meter and other related products. For more information, contact Don Davis 7-4-841-6821 or cell 704-905-6818 or Oil & Gas Desk 800-222-229, extension 6812. Email dandvais@fluidflow.com.

JACKSON COUNTY OPPORTUNITY-We are very interested in leasing 47.29 acres in Gainesboro, Jackson County, Tennessee for natural gas and /or oil leasing. Please contact Joe Whittenton at 870-270-6072 jwwhit@starban.net or Francis Whittenton at 404-803-1353 mfwhittenton@earthlink.net if there is an interest.

TENNESSEE JULY PERMITS: Anderson County - Atlas America, Coal Creek Mining & MFG CC-2132, 5,675', CC2108, 8,535, CC-2118, 4,185', CC-2117, 4,000', CC-2119, 4,200', CC-2131, 5,585', CC-2122, 6,300', CC-2125, 6,515', Windrock / Ariana Energy, LLC, The Coal Creek Co., LC13, 3,100', LC15, 3,500', LC12, 3,100', LG14, 3,400', Vinland Energy Operation, The Coal Crek Co LC16, 3,300', Lake City Fentress County - Adventure Enterprise, Inc., Wilma Pinkley ETAL A-1, 2,000', Riverton Hawkins County - Tri Global Holdings, Ben Helton #2, 2,000', Camelot Morgan County - Atlas America, Coal Creek Mining & MFG CC-2130, 4,450', CC-1113, 4,525', CC-2128, 4,225', CC-2127, 4,225', Petros / Ariana Energy LLC, Glen Long #3, 2,700', #2, 2,700', Cardiff / Montell Resources LTD, John Bower #2, 7,500', Twin Bridges Overton County - National Energy Development, Angela Guffy 3-N, 2,000' / OV Storey 2-N, 2000' / Riverside Oil & Gas, Inc., Charles J. Vaughn, BH21, 2,000' / Wilburn Wright Trust c/o Ed Wright, 2,000', Alpine Pickett County - Furion Energy, Larry & Netta Beaty, Angel Rose #4, 1,999' / Rome Oil & Gas Co., Coleman Crouch 1-A, 2,000', / TN Oil Co., Betty Rich #2, 2,000', Moodyville Scott County - Appalan Petroleum, Todd Heirs #5, 2,000', #6, 2,000', #8, 2,000', / Bill Ray #1, 2,000', Robbins / Atlas America LLC, Fund 7 Domestic Surf BR-1149, 3,420', BR1148, 3,835', BR-1150, 3,450', Fork Mountain.

KENTUCKY JULY PERMITS: Adair County - Rick-Rod Oil Inc., Olinger, Ralph, #3, Reliford, Larry, #1, New Oil Investments, Inc., Bennett, Jimmy & Pat, #4, Camco, Inc., Holladay, Frank, #5, Knox Gp Barren County - Miller, David, Ward Kyle, #1, Leipers Ls Bell County - Daugherty Pet, Inc., Givens, George ET AL, DPI-924, Devonian, LP Clinton County - Thrasher, Glenn, #2, / Target Oil & Gas Corp., Hicks, Jimmy, #1, #2 / Talbott, WMG, Pennycuff, James H, #9, RKT Petroleum, LLC, Sevier, Collins, #109 / Explo Oil, Inc., Tuggle, Helen, #1 / Conner, Lesley, Sevier, Collins, #1, Knox Gp / Page, Allen, Brown, Deloy, #8, Stones River Harlan County - Daugherty Pet, Inc., Jackson, Chester Heirs, DPI-992, / Nolan, Mintie, DPI-1203, Devonian, LP Knox County - Gaddis Gas Company, Waller, Scott, #1 / Wirth, Kevin, #2 / Brown, Ernest, #1, Clinton Sh Leslie County - Daugherty Pet, Inc., WPP, LLC, DPI-1405, Kentucky River Properties, LLC, DPI-640, Devonian, LP Letcher County - Chesapeake Appalachia, LLC, Pike Letcher Land Company, #824183 / Daugherty Pet, Inc., Kentucky River Properties, LLC/EPC, DPI-1200 / Clean Gas, Inc., Ratliff, Howard & Emily Jr., #212, Devonian, LP / Whitley County - Pipeline Holdings, Inc., McCneil, Robert, #1 Clinton Sh

The Ky/Tenn Report is published monthly and distributed at no cost to oil and gas operators in Tennessee and Southern Kentucky. It is owned and operated by W.D. Goodwin, Inc., The editor is Bill Goodwin, e-mail: tmdbill@aol.com it is the official publication of the Tennessee Oil & Gas Association, 750 Old Hickory Blvd, #150-2, Brentwood, TN, 37027. Phone 615.371.6137, Fax 615.599-1806. Web site: www.tennoil.com.

KY/TENN REPORT
750 OLD HICKORY BLVD, #150-2
BRENTWOOD, TN 37027