Goldman Sachs, one of the world's most influential investment banks, on Friday raised its oil price forecast for the second half of the year to $141 a barrel, up from $107 previously. Analysts at the bank argue that the oil market is undergoing a "structural repricing" that will continue to play out for some time to come (Source: Associated Press). In eight of the last ten trading sessions, oil has set a new record high, and industry observers don’t seem to see any end in sight. Since September 2007, the prices of oil have increased from approximately $75 per barrel to nearly $130 per barrel and natural gas has increased from $6.13/mmBtu to $11.29 per MMBtu at the Henry Hub, an increase of over 84% in less than eight months. Global consumption of natural gas is expected to increase more in absolute terms than that of any other primary energy source, almost doubling to 4,900 bcm in 2030. Demand for natural gas is projected to grow 2.8% annually through 2025, faster even than projected demand for oil. (Source: International Energy Agency). In particular, demand for natural gas in Canada, the United States, and Mexico is increasing. In the United States, 60% of all homes are heated with gas, and 70% of new homes are designed for natural gas consumption. Due to its clean burning qualities, natural gas is the fuel of choice by environmentalists over coal for electric power production. With increasing pressures on the market, it is almost inevitable that natural gas will remain a strong prospect for the foreseeable future.

Mammoth Energy Group, Inc. (OTC: MMTE) is a regional resource exploration firm intent on applying time-tested exploration and drilling strategies along with extensive local knowledge to the historically productive oil and gas regions of Oklahoma. The Company is convinced that far too many resource exploration firms fail due to overly aggressive exploration and drilling programs that are designed to chase big returns, but are fraught with crippling capital expenditures and substantial risk. Instead, Mammoth Energy is dedicated to implementing a prudent, risk-averse business plan based on careful analysis, detailed knowledge of regional and local conditions, and time-tested exploration and drilling strategies. By remaining committed to this model, Mammoth is convinced that market conditions present excellent opportunities for sustained, long-term growth in this sector.

Mammoth has signed an agreement to acquire United Gas OK, Inc., an Oklahoma company that currently holds working interests in 17 producing gas wells in the state of Oklahoma. The Company, through United, has also recently completed the payment of a deposit to acquire drilling rights to a 1,400 acre field in which there is projected to be the potential to drill an additional 60 shallow gas wells in Noble and Kay counties of Oklahoma. The Noble and Kay County leases provide exploration and drilling rights to approximately 1,400 acres of land for which the primary objective is the penetration of the Herrington Limestone Formation and the completion of profitable shallow gas wells.

According to a report by Jackson Engineering, the Herrington Limestone Formation is known to produce sweet gas, with initial production rates of between 50,000 and 100, 000 cubic feet per day. The nature of the Herrington Limestone Formation allows for a very rapid drilling and completion schedule. Given sufficient funding, the only limiting factor to continually increasing production is the availability of drilling equipment and the pipeline operator's ability to keep up with the flow of production. Mammoth Energy believes that as a result of the characteristics of this formation, the exploration, drilling and completion costs of the gas wells will prove to be highly economical. Enhanced production is expected to be attained through the use of a compressor, which will allow gas from the wells to flow at a production rate slightly higher than that occurring under "natural" pressure. Based upon findings of the Jackson Engineering Report, this technique will allow the wells in this formation to produce gas at an estimated rate of 65,000 cubic feet per day, which is nominally higher than the average rate of production. Income projections indicate that each three well program should reach "payout" before the end of the first year of production.