St. John’s – Newfoundland – Vulcan Minerals Inc. (“the Company” TSX-V: VUL) announces that its 2007 Seismic Program in Western Newfoundland is underway. Approximately 60 kilometres of off-road lines are being prepared for conventional 2 D data acquisition. Line cutting is nearing completion, to be followed by shot hole drilling and data acquisition. The program should be completed by October subject to any logistical challenges associated with operating in a frontier area. The purpose of the program is to delineate specific drill targets in the Hurricane Deeps play in the Bay St. George Basin. The Hurricane Deeps is a seismically mapped prospect, which will require drill testing to at least a 3000-metre depth. It is the Company’s intention subject to financing and rig availability to drill the prospect in early 2008.
Medicine Hat Update:
The Medicine Hat shallow gas prospect is held pursuant to a petroleum and natural gas lease continuation and extension which expires on August 9, 2007, subject to possible further extension. Since acquiring the project in 2006 the company has participated in the drilling of three new wells and the re-entry of one well, all of which were frac stimulated. Initial results were inconclusive for potential production from the wells, which necessitated further downhole flow rate tests. Two representative wells have been tested with one well testing dry gas at approximately 50,000 cubic feet per day while the other well tested fluid and minor amounts of gas throughout the test period which did not allow for any sustainable gas rate to be measured. Surface tests of the remaining four wells, including two shut-in suspended wells, show rapid pressure declines suggesting the frac stimulations were ineffective in enhancing gas flow into the well-bore. Geophysical logs and offsetting well data suggest that the lease is gas bearing but that a new stimulation program will be required to enhance any gas recovery. The company is re-evaluating the technical and economic merits of the program in the context of the natural gas market conditions. As an industry, the exploration and development of shallow gas in southern Alberta has suffered a significant downturn in the last year due to rising service costs, subdued gas prices and currency appreciation all of which have negatively affected development economics.