Indigo-Energy Issues Update on Field Efforts in Illinois Basin Project

Sep 13, 2011, 08:40 ET from Indigo-Energy, Inc.

HENDERSON, Nev., Sept. 13, 2011 /PRNewswire/ -- Indigo-Energy, Inc. (OTC: IDGG)  Indigo-Energy is pleased to provide an update on operations in the Illinois Basin Dubois well project along with an outline of the next steps towards completion and production.  As previously reported, Indigo successfully completed the drilling of two horizontal wells attached to one vertical gas well (collectively referred to as the "HUB" well) and one horizontal oil well (D-1) in a project located in southern Indiana.  After many months of completion efforts and engineering work on the HUB well, Indigo announced in February that all of the wells were successfully being operated and, in fact, oil was being produced and natural gas was being flared in what was considered a milestone achievement in this field effort.

In March of 2011, Indigo encountered a failure of the field's water disposal pump system.  In the natural course of oil and gas production in the Illinois Basin, water is produced as a by-product of wells drilled in the New Albany Shale (gas) and limestone formations (oil) and this water is required to be injected back into the ground through a series of pumps, one of which failed.  This mechanical failure was likely due to wear and tear of equipment which may have been aggravated by the intensely cold weather that the field was encountering at the time.  With the water disposal system not working, all four of the wells were shut-down while a plan was developed to strengthen and revive this water removal system.  During this repair down-time, Indigo and its investment partner in this project, Reef, LLC, focused on Indiana Department of Natural Resources (DNR) requirements for reclamation and repair of some older, dormant wells in the field.  This group of older wells had been drilled on the Dubois property many years ago and, although they needed remediation, the Company recognized the opportunity that these older wells had for potential additional oil and gas production once work was completed.

In addition to the water injection pump fix and the DNR / well revival efforts, Indigo developed a "Field Redundancy" blueprint which focuses on each point in the operating and production process so that a single, similar failure does not halt production in the future.  As part of this Redundancy Plan, additional layers of operating capacity and safety protocols will be added to each point in the production process. Additional work will also be done to add lightning protection as well as protection against extreme temperatures and weather conditions that the Company has encountered in the field.  Transfer pumps along with the main injection pump will be given back-up systems to ensure continuous operations even in the event of an equipment failure.  While some of the short term results from the wells have been very promising, Indigo realizes that sustained, continuous operations will be essential to bringing about anticipated operating results.  

The injection pump system repair is nearly completed and the Company believes it will be back in operation very soon.  As part of the DNR work efforts, Indigo and Reef expect to have some additional, producing oil and gas wells in the field and additional announcements about those assets will be forthcoming.  The field redundancy plan is targeted for completion this fall and Indigo will also be doing additional work over the next 90 days on the HUB well to continue to improve and increase its production results.

Indigo President and CEO, Steve Durdin stated, "We continue with our consistent promise to share news and announcements when meaningful and material events occur.  The tremendous work being completed by our field team in the face of shortages of equipment, record weather events and economic challenges is very encouraging and our confidence remains high that great results are attainable."  Durdin committed to being more proactive in communication and said that he would issue another update to shareholders in two weeks.

About Indigo-Energy, Inc.:

Indigo-Energy, Inc. is an independent Nevada energy company, engaged in the drilling, development, production and acquisition of certain oil and gas reserves located in different geological regions around the United States. This involves drilling of developmental oil and gas wells at the different program sites on proven reserves. It also includes the purchase of producing oil and gas wells, and existing oil and gas leasehold interests.  

Safe Harbor: Statements contained in this press release that are not based upon current or historical fact are forward looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from estimated results. Management cautions that all statements as to future results of operations are necessarily subject to risks, uncertainties, and events that may be beyond the control of Indigo-Energy, Inc. and no assurance can be given that such results will be achieved. Potential risks and uncertainties include, but are not limited to, the ability to successfully complete drill projects, adapt to changes in technology, and energy competition.

SOURCE Indigo-Energy, Inc.