Powder River Basin Gas Corp. to Acquire CKG Energy's New Mexico Operations.

Business Editors

DALLAS--(BUSINESS WIRE)--Oct. 22, 2002

Powder River Basin Gas Corp. (OTCBB:PRVB) announced today that it has signed a letter of intent to acquire CKG Energy's New Mexico operation.

Powder River Gas Corp. has executed a Letter of Intent to purchase a 46,000-acre gas field near Tucamcari, New Mexico. The financial terms of the transaction are for PRVB to deliver to CKG Energy, Inc., 3,000,000 shares of Powder River's common stock and $500,000 in cash payable over a year from the closing date. In return, Powder River will receive a 74.5% net revenue lease with a guaranteed override in the area referred to as the "Randals Ranch Prospect." The transaction is scheduled to close within thirty days.

The Tucumari field contains an estimated 500 Bcf (1/2 trillion cubic feet of gas) at zones from 6650' to 6825'. The three test wells drilled in the 1980's tested: (a) 12,500 mcfpd on 1910 psi perforations at 6746' to 6819', (b) 12,700 mcfpd on 1820 psi perforations at 6650" to 6774', (c) 16,000 mcfpd on 1290 psi with perforations at 6742' to 6803'. The gas tested 2% helium, which sells at approximately $40 per mcf bringing net gas content to $5.50 net price per mcf at current prices.

"The Tucumcari gas field, with proper development and investment, could produce in excess of $3 million per month net to Powder River," said Greg Smith, Chairman. "This is in addition to the income from our Wyoming operations which could include another $250,000 per month once the Coal Bed Methane wells are completed in the Zulling field."

Smith further comments, "the key business component of the Tucumcari gas field is that we now have access to a pipeline less than five miles from where our drilling will commence. A-T-A Products Pipeline was abandoned and is being retrofitted as a natural gas pipeline. Powder River will have a distribution contract in place within the next 90 days and plans to have an industry partner to start drilling wells in the next 120 days from the Closing of the Contract. In addition, we are negotiating with our future partner in the refitted pipeline, Energy Processors Corp., to participate in the revenue stream created by future producers in the area."

The description of the leases related to the Tucamcari New Mexico property:

T-10-N, R-27-E, N.M.P.M.

Section 16: W2SE; Section 17: A 72 acre triangular shaped tract of land located in the S2S2; Section 19:E2, SW, Section 31: All; Section 32: All, Section 33: All

T-9-N, R-27-E, N.M.P.M.

Section 4: Lots 1 (39.63), 2 (39.67); 3 (39.73), 4 (39.77), S2N2, S2; Section 5: Lots 1 (39.82), 2 (39.88), 3 (39.92), 4 (39.98, S2N2, S2; Section 6: Lots 1 (37.08), 2 (37.20);. 3 (37.32), 4 (37.44), S2N2, S2; Section 7:N2, NESW, NWSE; Section 8: N2, SE, E2SW; Section 9: N2N2, S2NW, NWSW, SWNE, W2SE, SESE; Section 10: N2SW; Section 17: NW, NWSE, NESW

About Powder River Basin Gas Corp.

Powder River Basin Gas Corp. is an exploration, development and production company historically 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 current focus is to find undervalued proven properties in the Rocky Mountains, New Mexico and West Texas with long life reserves and price stability. The acquisition of the aforementioned New Mexico gas properties combined with the company's previously acquired Powder River CBM properties is a further indication of PRVB'S business plan. As of June 30, 2002, the Company has 20,207,833 shares outstanding and approximately 4,000,000 shares owned by non-insiders.

Forward-looking statements contained in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Certain important factors could cause results to differ materially from those anticipated by some statements made in this release. You are cautioned that all forward-looking statements involve risks and uncertainties. Among the factors that could cause results to differ materially are the following: lack of availability of financing; inability to control costs or expenses; success rates for exploratory drilling for oil and gas, transportation problems; and lack of market acceptance of the Company's products, etc. Reference is also made to the risk factors contained in the Company's Registration Statement on Form S-3, which are incorporated herein by reference.

For additional information on Powder River Basin Gas Corp. go to: powderriver-gascorp.com.