Strike has signed the joint venture agreement governing the Eagle Ford Shale Exploration in Texas.
Under the terms of the joint venture, Strike has secured a 27.5 per cent stake in the venture, which also includes four Texas-based companies. The joint venture is formally named Eagle Landing Joint Venture.
Currently the joint venture has secured 12,400 acres, with 3,410 acres net to Strike. This acreage has been acquired over the last 12 months and the leasing activities will be ongoing for several months.
The majority of the leases are located in Fayette County, Texas, which are on trend with high activity areas in Gonzales and De Witt Counties being drilled primarily by EOG and Petrohawk. Published projected recoveries in these areas range of 450,000 to 1,000,000 barrels of oil equivalent per well based on 160 acres spacing.
Other operators are successfully extending the productive Eagle Ford trend into eastern Gonzales County in the vicinity of the joint venture acreage position, including Penn Virginia, Forest Oil and Magnum Hunter. Three wells recently drilled in Fayette County by Southern Bay Operating, LLC (a subsidiary of GeoResources Inc) are now being fracced and tested. These wells Flatonia East Unit 1H, Flatonia East Unit 2H and Black Jack Springs Unit 1H are in the vicinity of the Strike joint venture leasing. Australian listed company Eureka Energy (ASX: EKA) has a 9.4% working interest in the Black Jack Springs Unit 1H well.
If published recoveries are extended onto leases secured by the Eagle Ford joint venture to date, this provides a target potential of gross 35 to 77 million barrels of oil equivalent or 10 to 21 million barrels of oil equivalent net to Strike's acreage position.
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