American Petro-Hunter has acquired a majority working interest in an additional 2,000 acres of lands located in Payne County, Oklahoma. The acreage augments the Company's holdings at the North Oklahoma Project to 3,400 total gross acres.
With this recent acquisition, the Company has designated the new lands as the "Ripley Prospect" and the original lands as the "Yale Prospect," with both areas held as regional components of the North Oklahoma Project. The newly acquired Ripley acreage is located in a key area of an emerging horizontal drilling play where over 100 foot thick sections of Mississippi Formation are currently being aggressively exploited by regional players deploying laterally drilled, horizontal wells.
Surrounding the Ripley Prospect, numerous lease holdings are under development by Tulsa-based Calyx Energy, a private company. To date, Calyx has drilled 3 horizontal wells on leases within a mile and a quarter (1¼ mile) south of the Ripley block and, of major significance to the Company, the nearby C&N 25-1H well has been speculated to have had initial production rates (I.P.) of 1,000 barrels per day (BPD). Calyx also has plans for further wells immediately north of our Ripley Prospect holdings and is currently exploiting prospects on over 40,000 acres in central and eastern Oklahoma.
The 2,000 acre Ripley Prospect block is now part of the central focus of the Company's 2011 development plan. A location for our first Mississippi horizontal has been engineered and proposed. The 1,500 to 4,000 foot lateral will drill down and along the Mississippi which sits directly over the Woodford Shale. The lease block would allow, if successful, for the drilling of 5 horizontals on 320 acre parcels. Further information will be released regarding potential spud dates and particulars on the play.
Company President Robert McIntosh stated, "We are very pleased to have added this encouraging and very interesting horizontal Mississippi play to the North Oklahoma Project. With the new drilling combined with our existing lands encompassing both Woodford and Mississippi prospects, we have secured sufficient acreage to drill many horizontal and vertical wells in 2011. If we are successful, we will rapidly move the Company forward to our stated production goals and targets."
Given the added expense of horizontal drilling, American Petro-Hunter has developed a prudent "watch & learn" approach based on the experiences of the well-funded major operators at the Yale Prospect area. As the drill programs currently under development by the major players adjacent to our Yale Prospect are not yet underway, the opportunity to quickly move into a proven and highly productive area less than 10 miles away at Ripley presented itself as a desirable near term opportunity. The Company will continue to explore and develop vertical wells in the Yale area and plans to immediately follow up the NOS227 well dependent on completion results.
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