Under the terms of the farm-in agreement, Fidelis advanced $260,000 to Miramar, the operator of the project, representing a two-thirds share of the costs for the drilling to completion of the 7,500-foot "Lepovitz A" natural gas well. Presently, Miramar Petroleum Inc., PI Energy and Discorbis Oil Company are the companies active in the Hidalgo field.
The Hidalgo Prospect has under lease approximately 312 gross acres. The multi-objective gas reservoir target is Frio aged sands that have produced from 27 sand horizons 338 Bcf gas through 2004. The main objectives of the Hidalgo Project are the Bell and Cord sands that have a combined potential reserves of 16.1 Bcf gas. The Bell sand in the Miramar Petroleum, Inc. #2 Theser Gas Unit well has produced 20 Bcf gas at an average recovery of 2.96 Mmcf/day from seven wells. In addition, the Cord sand in the same well has a cumulative production over 62.9 Bcf from eight wells with an average recovery of 7.87 Mmcf/day.
Fidelis and Miramar are hopeful that if successful, the well could drain the entire lease acreage, however several wells may be required to fully exploit the lease. President Dan Hodges states, "The Company is pleased to have a strong, working interest partner in Miramar as they have a proven and successful track record in developing significant gas production from the Hidalgo field."
Fidelis has now been informed from Miramar that a potential spud date of the well could occur earlier than previously anticipated, possibly within two weeks, based on rig availability.
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