August Energy Corp., (PINK SHEETS:AENC) and ORION Petroleum Corp. (PINK SHEETS:ONPC) jointly announced today that work has commenced on its second well in Puckett Field. The operator has moved a workover rig onto the Laughlin #1 well in Section 18, Smith County, Mississippi and has so far cleaned out the hole to 8,800 ft.

The field geologist has recommended that a primary target should be a zone at 9,450 ft if it can be reached. Previous production records show a cement bridge plug placed in the well at 8,800 ft which will have to be drilled out and a cement plug at 9,775 ft. with possible debris from previous drilling activity on top which will also have to be removed. The hole was originally drilled and cased to 9,500 ft. Operator production personnel feel that both of these obstructions can be removed, however in the unlikely event that one cannot, current workover operations have already exposed alternative zones which will provide additional productive completion targets.

Studies by the geologist and production personnel have revealed numerous zones in an interval from approximately 7,500 ft to 9,500 ft that were either not produced in earlier production activities, or were not produced to depletion. Some of these zones were tested in the 1960's, when the market for gas was not as strong as it is today and oil was more economical to produce. The zones tested revealed rates from 250,000 cubic feet per day to over 1,000,000 cubic feet per day. Gas is now selling at over $7.00 per 1,000 cubic feet and the Puckett Field has gas facilities available to market the gas, which were installed by August Energy Corp.

As previously announced, August Energy Corp. (PINK SHEETS:AENC) and ORION Petroleum Corp. (PINK SHEETS:ONPC) entered into a farm agreement with U.S. Oil and Gas Resources Inc. on the Puckett Oil & Gas Field wherein U.S. Oil has the rights to restore production in six wells in Sec. 18 of the field where geological studies indicate that as much as 1,000,000 barrels of proved reserves are left to be recovered. Further progress reports will be forthcoming as work proceeds.

Certain information included in this communication (as well as information included in oral statements or other written statements made or to be made by August Energy Corp. or ORION Petroleum Corp.) contain statements that are forward looking, such as statements related to the future anticipated direction of the oil and gas industry, plans for future expansion, various property development activities, planned capital expenditures, future funding resources, anticipated production and reserve growth. These forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual operations or results to differ materially from those anticipated.