Canary Resources Creates Service Companies to Enhance Forest City Basin CBM Gas Drilling Program

Canary Resources Creates Service Companies to Enhance Forest City Basin CBM Gas Drilling Program

August 9, 2006 Filed Under: Mining Services, Oil and Gas  

Canary Resources Inc. today announced the formation of a new drilling company and a well service company. Canary’s management has hired experienced employees and procured equipment and inventory over the past several months, enabling Canary to reduce its reliance on an increasingly expensive and scarce third party services industry.

With the creation of these wholly owned companies, Canary has met the challenge of procuring services on a continuous long term basis in order to expedite and safeguard its drilling and development program for coal-bed methane in the Eastern Forest City Basin of Kansas and Missouri. Besides assuring Canary’s access to essential services in an exceptionally tight market, the new subsidiaries provide Canary with two new profit centers.

The drilling company’s staff has many years of experience drilling shallow gas and oil wells. The range of experience includes drilling with mud and air rigs in the Cherokee and Forest City Basins of Kansas, Oklahoma and Missouri. The well service company’s highly skilled employees have extensive experience contracting for many energy companies in Colorado, Kansas, Oklahoma and Missouri, working on oil and gas wells at depths of 500 to 3,000 feet.

The newly formed companies are structured primarily for Canary’s operational benefit, although they will also provide services for outside oil and gas customers in Kansas and Missouri. This strategy gives Canary priority access to reliable services, yet allows high equipment utilization rates while enhancing revenues and growth potential for Canary.

Canary Resources Inc. is an independent Oil and Natural Gas Company engaged in the acquisition, exploitation, production and development of oil and natural gas properties. Canary has an active leasing program and farm-out agreements covering acreage in Johnson and Miami Counties, Kansas, and in Bates and Cass Counties, Missouri, for which it is the operator. Canary has offices in Houston, Texas, and Stilwell, Kansas.

Additional information on Canary Resources Inc. is available from: Canary Investor Relations Department (281) 255-4160

Or visit the Company’s website at

Portions of this document include “forward-looking statements,” which may be understood as any statement other than a statement of historical fact. Forward-looking statements contained in this document are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “potential” and similar expressions. Actual results may vary materially from management’s expectations and projections expressed in this document. Certain factors that can affect the Company’s ability to achieve projected results include, among others, production variances from expectations, uncertainties about estimates of reserves, volatility of oil and gas prices, the need to develop and replace reserves, the substantial capital expenditures required to fund operations, environmental risks, drilling and operating risks, risks related to exploratory and development drilling, competition, government regulation and the ability of the Company to implement its business strategy.


Canary Investor Relations Department (281) 255-4160

Source: Canary Resources Inc.

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