Ator GU #1H - After earlier problems, drilling of horizontal leg underway.

Devon reports that the drilling of the horizontal borehole is finally underway. Since the Ator GU #1 is a new well in this area, a deep vertical hole was drilled to carefully log and examine the Barnett Shale formation. Subsequently, an engineering problem arose when more than one cement plug failed to hold for the horizontal "kick out." Approximately a week was required for resolution.

Once drilled, Felderhoff's #4 rig will set up on the adjacent Ator #1H pad. The log records from the first well may make the drilling of another deep vertical hole unnessesary.

The extent of the gas potential will not be known until the high pressure frac jobs are completed. This engineering process can take 2 to 4 months to be evaluated and completed.