The Kellster 1-5 well is the Company's first horizontal CBM gas well drilled. Once the well drilling capital cost is repaid, the Company's operating subsidiary will "back-in" to a residual 53.2% working interest in net proceeds from well production throughout the well life.
Pursuant to further drilling activity on the Company's Wagnon gas lease, the Company reports that two additional wells (Kyndal #2-2 and the Bryce #3-2) are scheduled to be drilled on the property back to back beginning before the end of the month. Drilling site locations have been determined and final site preparation in contemplation of drilling is in process.
The Company further advises that drilling of the Company's first Caney Shale vertical well is scheduled to begin in the next two weeks on Lexington's new Middlecreek Gas Prospect located in Hughes County, Oklahoma. The drilling prospect into the Caney Shale zone is planned to an estimated depth of 4,500 feet.
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