High Plains Gas Issues Open Letter to Shareholders

GILLETTE, Wyo., Aug. 8, 2011 /PRNewswire/ --

Fellow Shareholders:

The management team at High Plains Gas, Inc. would like to take this opportunity to communicate our continued efforts to create intrinsic value in High Plains Gas (HPGS:OTCBB).  We have always had a two-pronged approach to creating value: growth through acquisitions and creating operational efficiencies.  We continue to employ strategies as we work to maximize the potential in High Plains Gas.

Our stated acquisitions strategy is to purchase high quality, revenue producing assets in the oil and gas industry where we have the opportunity to grow existing revenue streams through adding efficiencies to the assets.  The acquisition of the North and South Fairway coal bed methane fields exemplify this strategy.  We have an opportunity to grow the revenues on these assets by returning idle wells to production.  The cost of drilling new wells ranges between $180,000 and $250,000.  We purchased the existing wells for approximately $6,500 each and can reactivate them for between $2,500 and $5,000  which includes basic maintenance.  To date we have returned more than 250 of these wells to production and believe we can return an additional 500 wells to production with an aggregate capital investment of approximately $1.25 million to $2.5 million.  We believe an investment of this size could bring up our production in the North and South Fairway fields to between 28,000 and 32,000 net Mcf per day.  At a $4.00 per Mcf natural gas price, this investment will create strong revenue opportunities for High Plains and its shareholders.  It is also clear that improved natural gas prices will have an exponential acceleration in revenues.

We recently announced that we have created an entity to focus on energy industry services and construction call High Plains Gas Services, LLC.  We embarked on this effort to diversify our revenue streams in an industry that is often volatile due to swings in commodities prices.  Mark Hettinger's 30 years of experience in this industry enabled him to build a company that realized revenues of approximately $250 million in 2008.  We will implement a strategy of seeking out and bidding jobs that are synergistic to our existing operations.  

We want to assure our shareholders that management remains focused on continuing to operate our current assets as well as looking for opportunities to build the company and add value to our shareholders.  These are the strategies that will create long term value in our company and drive our success going forward.  

Regards,

About the Company

High Plains Gas, Inc. is a Gillette, Wyoming based energy company actively engaged in the acquisition, development and production of natural gas primarily in the Powder River Basin.  The Company recently acquired the former Marathon "North & South Fairway" assets.  These assets consist of 1614 coal bed methane wells with associated flow lines and over 155,000 net acres. This combined with the company's existing 92 natural gas wells gives the company a strong foundation in the natural gas industry. High Plains Gas will pursue expansion opportunities for the profitable production and transmission of natural gas. High Plains Gas believes it has unique expertise and experience in the refurbishment and reactivation of wells that produce natural gas from coal bed methane formations that helps position it strategically in the Powder River Basin.

Safe Harbor

Statements made about our future expectations are forward-looking statements and subject to risks and uncertainties as described in our most recent filings made with the US Securities and Exchange commission, and are subject to change at any time. Our actual results could differ materially from these forward-looking statements. We undertake no obligation to update publicly any forward-looking statement.

SOURCE High Plains Gas, Inc.