Mainland Drills Ahead at Buena Vista Well
Mainland has penetrated the top of the target Haynesville Shale at a depth of 19,980 feet at its Burkley-Phillips #1 well on the Buena Vista prospect located in Jefferson County, Mississippi.
As of Dec. 2, 2010, the Company is drilling ahead at 20,078 feet on its vertical well and is on course to reach the programmed depth of 22,000 feet. Upon reaching total depth, the well will be logged and the shale section will be evaluated utilizing Schlumberger and industry leading technology to confirm reservoir parameters and the Company's contention that an extensive natural fracture system exists within the Haynesville Shale. This information will provide a more accurate understanding of the prospectivity of the Haynesville Shale. The Company believes that the Haynesville Shale may extend beyond a 2,000 foot vertical section based on technical information gathered to date.
The Burkley-Phillips #1 well was developed by Mainland in order to explore the gas potential of this section in a region of Mississippi where the Haynesville is largely unexplored, except for an offset well that was drilled through a 2,000 ft Haynesville Shale section by Chevron in 1981 prior to the application of modern shale gas identification and production techniques.
Mainland previously discovered and developed a Haynesville play in the East Holly Field area in DeSoto Parish, Louisiana. Mainland confirmed the field through drilling and completing five Haynesville Shale gas wells with Petrohawk Energy Corporation and subsequently sold its interest in the Haynesville in a single transaction for over $28 million to Exco Operating Company (a subsidiary of Exco Resources, while retaining 100% of the shallower zones including the Hosston, Cotton Valley, and Upper Bossier formations. The Company has recently engaged Ryder Scott Company to quantify these retained resources.
To date, the Company has spent $7.6 million drilling the well in a timely and cost efficient manner. As of the current depth, the Burkley-Phillips #1 well depth has been advanced approximately 30 days faster than the most recent offset well.
Nick Atencio, CEO, stated, "Mainland is now drilling into the primary target interval of the Haynesville Shale. Our exploration concept is that the Buena Vista structure has the potential for a significant accumulation of gas, and based on our past experience in the Haynesville Shale, this prospect could result in multiples of reserves and value when compared to our successful De Soto Parish development. The analysis of the data currently being captured from this well will enable us to more accurately define potential gas reserves and production rates."