Wilon Resources, Inc. (Other OTC:WLON.PK - News), an energy company engaged in the production of natural gas, today issued an update to its shareholders on the status of several matters currently facing the Company.

For over a year, the third party company through which the Company had been selling its gas into the interstate transmission pipeline owned by Columbia Gas Transmission Company has not accepted delivery of the Company’s natural gas. In order to overcome this situation, the Company has been working over the past several months to complete a new, direct pipeline connection from its existing gathering system into a connection that is more centrally located for delivery into the interstate transmission pipeline owned by NiSource, Inc. d/b/a Columbia Gas Transmission (”Columbia/NiSource”). The Company is pleased to report the following progress towards accomplishing this goal :

– The Company has completed the construction of a new pipeline
connection and meter run from its existing gathering system into the
interstate transmission system owned by Columbia/NiSource, including the
installation by the Company of one new, leased compressor unit with a
capacity of 500,000 cubic feet (500 Mcf) per day to assist in moving
natural gas from the Company’s gathering system into the new
Columbia/NiSource tap.

– Wilon personnel, using the Company’s swabbing unit, work over rig and
related equipment, have swabbed out, re-worked and prepared for delivery 50
of the Company’s 90 natural gas wells located in Butler District, Wayne
County, West Virginia. The Company anticipates that its personnel will
continue to swab and rework an additional two to three of its existing
natural gas wells per week.

– The Company is also in the process of replacing corroded pipeline and
fittings in portions of its current gathering system that are located
further away from the new Columbia/NiSource tap, to enable these additional
wells to be tied into the new tap as they are re-worked. The Company has
replaced approximately 25,000 feet of pipe to date as part of this process,
and management presently expects this work to be completed within
approximately the next six weeks.

– At present, Columbia/NiSource has completed the setting of its meter,
meter house and accessories at the new tap where the Company’s gathering
system is tied into the Columbia/NiSource pipeline, and the Company is
waiting on the local power utility to run a new service line to supply
power to the meter.

– As soon as the power line connection for the Columbia/NiSource meter
is completed and the Company makes final adjustments to the compressor and
a recently acquired dehydration unit, management expects to be able to
deliver up to 500,000 cubic feet per day of natural gas from the Company’s
existing wells into the new Columbia/NiSource tap. In order to accommodate
the increase in production that is expected to occur as additional wells
are brought online, the Company also has leased another compressor that
will be able to deliver an additional 1,000,000 cubic feet per day (1
mmcfd), for a total initial capacity of 1.5 mmcfd. Management is hopeful
that the initial resumption of natural gas deliveries will occur within the
next 20 working days.