Petrogen Expands Position in Texas
|Thursday, June 09, 2005
Petrogen has completed the acquisition of a 100% working interest and 70% net revenue interest in and to the Tiller Ranch Lease, located within the Tom Graham Field, Jim Wells County, Texas. The Tom Graham Field, covering a total aerial extent of approximately ten thousand acres, has produced a total of thirteen billion cubic feet of natural gas (13 BCFG) from twenty-five distinct sands. Pay from these sands has ranged in depths from between 2,700' to 5,300'. In addition, Tom Graham Field has produced six million eight hundred thousand barrels of oil (6.8 MMBO) from six sands ranging in depths from 3,600' to 5,600'. The Lease consists of 822 acres and will allow up to six new drilling locations capable of testing the multiple Frio and Vicksburg age reservoir sands located on the Lease. Extensive subsurface control, provided by approximately twenty- five wells located on or adjacent to the Lease, indicate that potentially up to 18 BCFG reserves are recoverable.
Petrogen's Chairman and CEO, Sacha H. Spindler stated, "Petrogen's business strategy is focused on the acquisition, development and expansion of low risk, high reserve Texas Gulf Coast and Permian Basin opportunities. The Tiller Ranch Lease is a prime example of a Texas Gulf Coast opportunity that provides for immediate low risk development potential with substantial upside and expansion." Mr. Spindler further stated, "As with our other projects, Petrogen will operate all developments on the Lease and plans to initiate operations in the fourth quarter of 2005."
The Lease consists of potential natural gas exploitation opportunities trapped along a north-south striking, underdeveloped, low relief anticline. The majority of wells on the Lease were drilled during the 1940s and 1950s when local natural gas prices were in the 1 to 2 cent per MCF range. These extremely low gas prices resulted in limited development of the natural gas reserves on the Lease, providing for substantial infill and step out drilling potential. Wells in the area have average production histories of approximately eight to ten years with cumulative production ranging from approximately 2.6 to 3.5 BCFG per well. Extensive natural gas infrastructure exists within the area providing for immediate transportation and sales of any potential upcoming natural gas production.