PYR Pyr Energy Corp

Provides Strong Operational Update DENVER, July 17 /PRNewswire-FirstCall/ -- PYR Energy Corporation (AMEX:PYR) today announced record financial results for the nine and three months ended May 31, 2006. The Company recorded net incomes of $2,166,000 or $0.06 per common share and $1,535,000 or $0.04 per common share for the nine months and quarter ended May 31, 2006, respectively, compared with a net loss as of $223,000 or ($0.01) per common share and $315,000 or ($0.01) per common share for the nine and three months ended May 31, 2005, respectively. For the nine month period ended May 31, 2006, the Company recorded $7,775,000 in total oil and gas revenues from production of 636,352 Mcf of natural gas and 42,157 bbls of oil. Total revenues also include revenues of $259,000 from natural gas liquids and sulfur, principally from its Duck Federal #1-30 well located in Wyoming. For the nine month period in 2005, the Company recorded oil and gas revenues totaling $3,915,000 from production of 248,743 Mcf of natural gas and 44,846 bbls of oil. Natural gas prices increased from an average of $7.03 per mcf in 2005 to an average of $7.78 per mcf in 2006. Oil prices increased to $60.79 per bbl in 2006 compared with $48.15 per bbl in 2005. During the quarter ended May 31, 2006, the Company recorded $3,703,000 in total oil and gas revenues. Of this amount, we recorded $2,461,000 from the sale of 331,207 mcf of natural gas for an average price of $7.43 per mcf, and $987,000 from the sale of 16,138 bbls of oil for an average price of $61.15 per bbl. In addition during the quarter, the Company received $255,000 from the sale of natural gas liquids and sulfur, from its Duck Federal #1-30 well, in Wyoming. During the quarter ended May 31, 2005, we recorded $1,637,000 in total oil and gas revenues. Lease operating expenses (LOE) per produced Mcfe averaged $0.65 for the third quarter 2006, as compared with $0.86 for the corresponding quarter of 2005. Net production for the quarter ended May 31, 2006 totaled 462,517 Mcfe compared to 208,925 Mcfe for the quarter ended May 31, 2005, resulting in an increase of 121%. Comparing the quarters ended May 31, 2006 (3Q06) and February 28, 2006 (2Q06), net production increased by 81%, from 256,203 Mcfe, due primarily to increased production in Oklahoma and Wyoming. Record daily production averaged 5,027 Mcfe per day for the quarter ended May 31, 2006 compared to 2,847 Mcfe per day for the quarter ended February 28, 2006. At May 31, 2006, the Company had cash of $7,238,000, oil and gas receivables of $2,090,000, current liabilities of $2,160,000, total assets of $28,162,000, and stockholders' equity of $18,348,000. There were 37,993,259 common shares outstanding at May 31, 2006. Operational Update: At the Mallard project in Uinta County, Wyoming, the #1-30 Duck Federal #1-30 well is currently flowing on a 13/64" choke, with current July production averaging 4.5 MMcf per day of gas, 85 barrels of associated condensate, and 305 barrels of water. Within the past month the well has undergone production logging and a bottom hole pressure survey. Results of the tests indicate that water production has decreased significantly in the well since initial production in mid-March (around 1200 to 1500 barrels per day at that time). Analysis of the recent logging and pressure survey is being used to design production tubing to be installed with the intent to stabilize and enhance flow rates, as the well continues to experience an unstable slugging flow performance through the 7" casing. We anticipate that tubing will be installed within the next couple weeks. The Company owns a 28.75% working interest in the well and surrounding acreage, and believes there are additional PUD locations to drill within its acreage position. The Duck Federal #1-30 represents a development well within the giant Whitney Canyon -- Carter Creek Field complex, which has produced over 2.1 TCF to date. It is anticipated that PYR and the working interest partners will acquire approximately 23 square miles of 3D seismic data in order to better delineate additional drilling opportunities in the area. The field surveying for the 3D has been recently completed, and barring delays, we anticipate that acquisition of the seismic should be complete by September 1. In addition, PYR and the working interest partners are studying the feasibility of re-entering and sidetracking the now-abandoned UPRC #25-1 well, located approximately 2000' north of the Duck Federal. This well encountered the Mission Canyon approximately 400' high to the Duck Federal, but failed to penetrate the main porosity zone due to steep dips. As a result, it produced only around 587 MMcf and 5000 barrels condensate prior to being plugged and abandoned. PYR and its partners believe economic reserves can be found within the porosity zones, accessible via a sidetrack. At the Wilburton Field in Oklahoma, the Scharff #7-1 commenced drilling operations in the first week of June and is nearing a target depth of approximately 15,000 feet. It will be evaluated before commencement of completion and stimulation activities. An AFE to drill the Scharff #8-1 has been received from the operator and the Company has approved its participation in the drilling of the new well. It is expected the Scharff #8-1 will begin drilling operations once the #7-1 has completed drilling. The Scharff #6-1 was recently placed on sales, and due to completion and fracture stimulation problems is currently producing at a rate of approximately 6 MMcfe per day. The Scharff #5-1 well, drilled and completed in 2005, had initial production rates of up to 54 MMcfe per day, and is currently producing at an average rate in excess of 39 MMcfe per day. The Company owns a 2.42% working interest in these wells. In Smith County, Texas, the Chisum #1 well has been completed in the lower Rodessa section and is currently flowing to sales. As reported earlier, the initial test rates were constrained by flow into a low pressure system and as a result the well was tied into a high pressure system on May 26th. Currently, the well is producing at 1 MMcf per day with 53 barrels of associated condensate production. Rodessa production, within 3 miles to the north and northeast of the Chisum location, has yielded cumulative production ranging up to 6.4 Bcfe per well. Additional drilling locations to fully exploit the Rodessa potential in the project area have been identified and it is expected that approximately 25 square miles of 3D seismic data will be acquired to better delineate the additional drilling opportunities. The Company owns a 28.57% working interest in the Chisum well and surrounding acreage. PYR and its partners control approximately 9,800 acres of leasehold in the project. At the Madison project in the northern part of the Constitution Field, located in Jefferson County, Texas, the Maness Gas Unit #1 well has undergone a work-over to replace production tubing damaged by corrosion and scaling. The work-over began in mid-May, and as a result of difficulties in removal of the existing production tubing, the well was shut-in for a protracted time frame. The well is currently back on production recovering working fluids and load, and it is expected that the well will return to sales in August. At the time of shut-in for the work-over, the Maness GU#1 had cumulative production of 2.6 Bcfe (since mid-August 2004) and was averaging gross production of approximately 400 BO/day and 1.5 MMcf/day (3.9 MMcfe/day). The Company has a 12.5% working interest in the Maness Gas Unit #1 well. The drilling of the Wall #1 well, a PUD location offsetting the Maness GU#1 well, should commence in the next few days. We will participate for 17.5% working interest in the drilling of this development well, which includes our additional purchase of 5% working interest from the operator. The purchase calls for the Company to fund 6.66% of the drilling costs to casing point to earn the additional 5% working interest in the Wall #1 well and surrounding acreage. Wells drilled in this prospect are subject to a 50% net profits interest agreement, reducing to 25% after the NPI reaches payout with the Venus Exploration Trust. In Evangeline Parish, Louisiana, the Fontenot # 1 exploration well was spud on May 12th and reached a total depth of 10,650 feet on June 6th. Based on log and core analysis, casing has been set to total depth and completion is underway. The first Yegua/Cockfield (CF-5) zone has been perforated, and is currently being tested. PYR is participating with a 15% working interest in the project and controls, along with its partners approximately 3000 acres of leasehold. Wells drilled in this prospect are subject to a 25% net profits interest agreement, reducing to 12.5% after the NPI reaches payout, with the Venus Exploration Trust. Commenting on the record quarterly and operational results, Scott Singdahlsen, President and CEO, stated, "Overall, we are extremely pleased by our record results and the continued quarter over quarter and year over year growth that the Company has experienced in production and revenue. We expect continued increases as new wells are drilled and brought on line. The Scharff drilling in Oklahoma continues to add significant production and cash flow to the Company, and we are excited about the opportunity that our Smith County -- Rodessa project offers for future growth. At the Mallard project in Wyoming, we are excited about the current 3D seismic survey underway, and the possibilities to drill additional wells in the giant Whitney Canyon Carter Creek Field. PYR continues to aggressively pursue its drilling portfolio and remains committed to seeking projects and acquisitions with more operational control." Denver based PYR Energy is an independent oil and gas company primarily engaged in the exploration for and the development and production of natural gas and crude oil. At the current time, PYR's activities are focused in select areas of the Rocky Mountain region, Texas and Oklahoma Panhandle, East Texas, and the Gulf Coast. Additional information about PYR Energy Corporation can be accessed via the Company's web site at http://www.pyrenergy.com/. This release and the Company's website contain forward-looking statements regarding PYR Energy Corporation's future plans and expected performance based on assumptions the Company believes to be reasonable. A number of risks and uncertainties could cause actual results to differ materially from these statements, including, without limitation, the success rate of exploration efforts and the timeliness of development activities, fluctuations in oil and gas prices, and other risk factors described from time to time in the Company's reports filed with the SEC. In addition, the Company operates in an industry sector where securities values are highly volatile and may be influenced by economic and other factors beyond the Company's control. This press release and the Company's website include the opinions of PYR Energy and does not necessarily include the views of any other person or entity. DATASOURCE: PYR Energy Corporation CONTACT: Scott Singdahlsen, President, or Tucker Franciscus, VP, both of PYR Energy Corporation, +1-303-825-3748, or Fax, +1-303-825-3768 Web site: http://www.pyrenergy.com/

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