*** POWDER RIVER BASIN CORP., (OTC BB: PRVB) ***

Editors Note:

At Stockupticks, we like board chairman and founders who believe in their company enough to personally repurchase shares equaling 20% of the company's debt. If you look at the excerpts from PRVB's recent press releases below, you'll see that is what the chairman did on July 18, 2002. That's faith. A buyback. 

We also like companies that want their administrative offices near their actual operations and that's what PRVB did last month, moving from Dallas, TX to Denver Co. PRVB currently holds leasehold acreage in the Powder River Basin of Wyoming in the United States. 

We think you'll like their story ...
 
 

*** ABOUT POWDER RIVER / PRVB ***

Powder River Basin Gas Corporation is an exploration, development and production company engaged in the evaluation and development of coal-bed methane ("CBM") reserves as well as shallow oil reserves within the Powder River Basin in Wyoming. The Company's focus is to obtain leasehold interest in acreage within the Powder River Basin that is in proven geologic settings (known productive coal seams) and is adjacent or near developed leases, which are held by larger CBM developers and operators. 

This close proximity to other operators allows PRVB to benefit from the established infrastructure of  gathering systems, pipelines, electricity sources, roads, etc. In addition, PRVB can benefit from the dewatering of the coals that has already occurred by the offset operators, which help to reduce the company's water disposal costs. The Company's geologic and engineering focus is concentrated on the commercial development of natural gas from four or five different coal seams in various leases in and around the Sheridan and Gillette areas. In addition, the company has identified the potential of shallow oil reserves (at a depth of 600 to 800 feet) on several of their leases and will pursue commercialization of these assets. 
 
 

*** THE MARKET ***

Wyoming sweet crude prices, as reported by Conoco, Inc., were $8.13 in December of 1998 and increased to $24.89 in December of 2000. Average U.S. petroleum consumption is estimated to increase 18 to 46 percent during 1999-2020.

*** PRVB LEASING, DRILLING & WELLS ***

As of November 1, 2001, the Company had a total of approximately 14,622 gross (10,361 net) acres under contract in fourteen different leases within Converse, Rook, Johnson, and Sheridan counties. The Company has a [70-82] percent net reveune interest and a 100 percent working interest in all of their leases. As of this date, PRVB has drilled and completed two CBM wells in their Zullig Lease, located just west of Clearmont, Wyoming in Sheridan County. Both wells were completed in the Monarch coal seam, which is located at a depth of approximately 800 feet. One of the two wells was tested and produced at an initial rate of 702 Mcf (thousand cubic) per day and one barrel of water per day. The wells are currently shut-in awaiting water disposal permits and installation of surface facilities and pipeline connection. 

In addition, PRVB drilled eleven other wells on the lease to a minimal depth of ten percent of their total depth in order to meet certain state requirements in reducing the well spacing from eighty acres to forty acres. Multiple coals seams exist throughout the Powder River Basin as identified by geologic surveys and existing CBM and water wells. 

Most of the acreage held by PRVB has either four or five separate coal seam objectives at depths ranging from 150 feet to 1,200 feet. The Company plans to utilize three drilling rigs and drill a total of 192 wells over a three-year period to fully develop their CBM acreage and recover an estimated 56.5 Bcf 10 (billion cubic feet) of gross natural gas reserves (37.8 Bcf net).  These reserves are based on ultimate individual well recoveries ranging from 100 MMcf (million cubic feet) to 302 MMcf. The actual average recovery within the Basin, to date, has been approximately 250 MMcf per CBM well.

The Company’s average cost to drill, complete and tie-in a CBM well to existing infrastructure is estimated to be $64,800, which is below the Basin’s average cost of $80,000 per CBM well. 

The Company’s projected costs are less due to the fact that a majority of their coal seam objectives are at depths less than 800 feet. PRVB anticipates that the development of their CBM assets will generate a pre-tax unrisked present value (discounted at ten percent) of $43.4 million. Note this figure does not include the value of the Company’s shallow oil reserves. This present value is based on a price deck using the New York Mercantile Exchange (“NYMEX”) Natural Gas future monthly contract prices for the upcoming three years (as quoted on October 8, 2001, yielding an average NYMEX price of $2.95 per Mcf) minus a basis differential of $0.25 per Mcf. After the initial three-year period the natural gas prices were escalated by two and a half percent per year, thereafter. The Company’s short-term focus will be on developing and monetizing their CBM and shallow oil assets within the Powder River Basin. However, longer term PRVB will seek opportunities to expand their current asset base as well as pursue other transactions that will enhance the value of the Company. 

Finally, PRVB will continually evaluate the optimal exit strategies for their assets and will implement those strategies at such a time that the maximum value for the assets can be captured. These strategies hinge on the Company’s ability to continue to build upon their asset base and create a concentrated portfolio that would attract other regional companies or to leverage into additional growth
 
 

*** DEVELOPMENTS & OPPORTUNITIES ***

Powder River Basin Gas Corp. currently has the following opportunities needing to be exploited: 

A) Powder River Basin Gas Corp. owns or controls through leasehold and farmouts approximately 10,400 gross/net acres m/l of coal bed methane leases. Thirteen coal bed methane wells in various stages of drilling, completing, connection. The Estimated budget necessary to bring all of these wells into production is approximately $1mm. 

B) Powder River Basin Gas Corp. has available drilling opportunities on remaining owned/controlled leasehold totaling approximately 150 +- coal bed methane wells.  These wells are anticipated to be drilled over the next year and a half at an estimated cost of $10mm.  I have included with this letter two engineering reports covering approximately 6,000 acres of current coal bed methane leasehold acreage held by Powder River Basin Gas Corp. 

C) Powder River Basin Gas Corp. is currently evaluating five producing well packages representing $10mm of producing value in coal bed methane, Frontier, Leo and Dakota sands of current production all of which have solid upside potential and offset growth opportunity.

D) Powder River Basin Gas Corp. has made a proposal to a group holding 24,000 long-term leasehold acres in the Rocky Mountian region with significant coal bed methane production potential.  This acreage block is offsetting a field having ultimate recoverable reserves of over 6 TCF of coal bed methane.

E) Powder River Basin Gas Corp. owns an additional 4,000 gross/net acres of currently producing Muddy formation wells in need of rework, re-completion and exploitative work.  An engineering and budget analysis is currently underway for this block of acreage.
 
 

*** PLAN OF OPERATION ***

The Company's business strategy for the next twelve months includes focused acquisitions and drilling operations which may be curtailed, delayed or canceled as a result of a variety of factors, including unexpected drilling conditions, pressure or irregularities in formations, equipment failures or accidents, weather conditions and shortages or delays in equipment delivery. The Company has drilled two gas wells that will produce commercially viable gas resources once the appropriate infrastructure (i.e., pipeline) is in place. The Company plans on implementing its drilling plan and begin recognizing revenues during the fiscal year 2002.

*** EXCERPTS FROM RECENT NEWS RELEASES ***

Powder River Basin Gas Corporation Chairman Purchases 500,000 Shares 

DENVER--(BUSINESS WIRE)--July 18, 2002--Powder River Basin Gas Corporation (OTCBB: PRVB) announced today that its Chairman and Founder, Greg Smith, has converted $100,000 of debt into Powder River Basin Gas Corporation (OTCBB: PRVB) common shares at a share price of 20 cents per share effective immediately. This conversion reduces corporate debt by 20% and indicates a strong vote of confidence by the Chairman in the new management team's ability to implement the Company's business plan. 

The decision to exercise at this price rather than the current market price was due in part to management's commitment to maintaining shareholder value while minimizing dilution. The company currently has approximately 19 million shares issued and outstanding. 

Powder River Basin Gas Corporation Announces New Gas Field Discovery in Wyoming 

DENVER--(BUSINESS WIRE)--July 17, 2002--Powder River Basin Gas Corporation(OTCBB: PRVB) announced today that through its "proposed" partnership with LZT Properties, LLC., a Wyoming based oil & gas company, the Grande #1 exploration well in Converse County, Wyoming has encountered a gas bearing "commercial pay zone" at a drill test depth of approximatley 650 feet. The well had a hydrocarbon bearing reservoir defined by log and pressure gradient sampling. 

The Grande #1 well, the first "approved" of 2 locations "staked," penetrated approximately 20 feet (gross) of electric log calculated gas bearing reservoir below the White River Sand in the Dakot/Lakota Formation. Located in an area 3 miles south of Douglas, Wyoming the new field has 3 "major" gas  pipelines available for immediate delivery. 

Powder River Basin Gas Corporation Moves Headquarters to Denver

DALLAS--(BUSINESS WIRE)--July 11, 2002--Powder River Basin Gas Corporation (OTCBB: PRVB) announced today that it is moving its corporate headquarters from Dallas to Denver effective August 1, 2002. The company cited a desire to be near its operating base and asset holdings in Wyoming as the primary reasons for the move. 

"We are excited about the move as we have quietly assembled a very seasoned management team based in Denver with several years of Rocky Mountain oil & gas experience to exploit the company's thousands of acres of  coal bed methane leases in the prolific Powder River Basin region of Wyoming," said Greg Smith, Chairman, Powder River Basin Gas Corp. 

 Powder River Basin Gas Corporation Announces Joint Venture With Emerald Operating and Rocky Mountain Exploration 

DALLAS--(BUSINESS WIRE)--June 28, 2002--Powder River Basin Gas Corp. (OTCBB: PRVB) announced today that it has entered into a 60/40 "joint venture" with Emerald Operating Company (EOC) and Rocky Mountain Exploration Inc. (RMEI), both privately-held Colorado Corporations to co-develop gas properties in a 7 county region of the Powder River basin of Wyoming. 

The "offering" party of any leaseholds and/or producing properties in this area  would retain 60% interest with the participating party(s) carrying 40%. In the event the property(s) are shared, Emerald Operating will be the Operator. 

"This strategic joint venture in one of the hottest gas plays in the country, provides the necessary synergies and efficiencies to quickly capture some of the many opportunities that abound in the Powder River Basin Region," said Alex Campbell, President and CEO of Powder River Basin Gas Corp. "We are extremely excited about this new partnership as both Emerald Operating and Rocky Mountain Exploration have nearly 10 years of experience operating in Wyoming with the last 4 years successfully completing 54 producing Coalbed Methane(CBM) wells in the Powder River Basin," Campbell also said. 

Powder River Basin Gas Corporation Announces New CEO

 DALLAS--(BUSINESS WIRE)--June 4, 2002--Powder River Basin Gas Corp. (OTCBB: PRVB) announced today that it has hired a senior oil & gas executive to run the operations of the company. 

Mr. Alex B. Campbell will become President and CEO of Powder River Basin Gas Corp. effective immediately, assuming the responsibilities for initiating the exploration program of the company's leasehold interests in the prolific Powder River Basin in Wyoming. 

Mr. Campbell has over 20 years development experience as a principal with oil and gas companies, including LaTex Energy, Aspect Energy and Aspect Resources. Most recently, he and his partners built a "developmental energy company," Aspect Resources, into a $200 million entity that was sold to Samedan Oil Corporation, a subsidiary of Noble Energy, Inc. (NYSE:NBL). 

*** MANAGEMENT ***

The overall management of the Company will be under the direction and control of Mr. Alex B. Campbell President and CEO , Mr. Gregory C. Smith who will serve as Chairman of the Board and, Alan L. Edgar who will serve as Director

ALEX B. CAMPBELL 

Mr. Campbell has over 20 years development experience as a principal with oil and gas companies, including LaTex Energy, Aspect Energy and Aspect Resources. Most recently, he and his partners built a "developmental energy company," Aspect Resources, into a $200 million entity that was sold to Samedan Oil Corporation, a subsidiary of Noble Energy, Inc. 

GREGORY C. SMITH 

Mr. Smith, age 47, has been involved in the workout and structured finance business for almost 18 years. From 1996 to 1998, Mr. Smith was an independent merchant banker in the real estate industry, where he primarily acted as an investor and developer. Since 1998, he has served as President of Renaissance Companies, Inc., a privately held firm specializing in providing debt and structured finance advisory services to real estate opportunity funds,  institutional investors and developers. Previous experience includes work in the commercial real estate field as both a principle and advisor and the financing and ownership of oil and gas properties in Texas and Oklahoma. Currently, Mr. Smith also serves as a Special Consultant to Fossil Bay Resources, a junior oil and gas company listed on the CDNX. Mr. Smith holds a Bachelor of Science in Business from The University of Nevada. 

ALAN L. EDGAR

Mr. Edgar, age 54, has been involved in energy related investment/merchant banking and equity analysis for almost 30 years. Since 1998,  Mr. Edgar has served as President of Cochise Capital, a privately held investment bank specializing in independent exploration and production related mergers and acquisitions advisory and financing. Previous public company mergers and acquisitions, investment/merchant banking and energy financing positions include serving as Managing Director and Co-Head of the Energy Group of Donaldson, Lufkin & Jenrette Securities, Inc., (Credit Suisse First Boston Corporation) from 1990 to 1997; as Managing Director of the Energy Group of Prudential- Bache Capital Funding from 1987 to 1990 and as Corporate and Research Director of Schneider, Bernet & Hickman, Inc. (Thompson, McKinnon) from 1972 through 1986. Mr. Edgar has an MBA from Southern Methodist University and a Bachelor of Economics from Monash University, Melbourne, Australia.
 
 

*** CONTACT ***

Powder River Gas Corp.
511 16th Suite 302
Denver, CO 80202

Please Contact:

Jay Shrewder
888-743-2165
tfg1@cox.net

Corporate  Web Site

http://www.powderriver-gascorp.com

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