There are two main target zones of potential gas production on the South Lamar Gas Prospect; both the Hartshorne Coal zone and the Caney Shale zone that is found somewhat deeper are estimated to exist on the acquired lands. The lease includes access to all gas bearing zones with the exception of the Jefferson/Cromwell zones at approximately 3,400 to 3,500 feet and provides a 78.5% Net Revenue Interest and a 100% Working Interest. An additional 320 acres in the Prospect as part of the farm out is under negotiation and may be acquired as part of the announced acquisition. Further negotiations for other adjacent properties forms part of the Company's active leasing activities in the area. The prospect is well positioned, lying south of Oklahoma City and has good access by road and to existing gas pipelines.
The Company plans drilling of horizontal wells into the coal seams and or gas zones located on this prospect, however, the thicker Caney Shale zone estimated at the 4,000 foot level may form an initial vertical drilling target for the Company due to the relative availability of drilling rigs in the area, and the fact that the Company needs data on the Caney Shale zone to coordinate and plan future possible horizontal drilling initiatives into this zone.
Future horizontal drilling is also planned for the shallower Hartshorne Coal zone of the South Lamar Gas Prospect similar to the well completed on the Company's Wagnon lease.
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