As previously announced, Galaxy, through a wholly owned subsidiary, and Exxel Energy Corp., Galaxy's partner in the project, have accumulated over 5,000 undeveloped acres in the Piceance Basin. Under its agreement with Exxel, Galaxy has undertaken operations for the project's development as contract operator for Exxel.
The agreement makes available to Galaxy the service provider's vast technical and operational experience in the project area and allows Galaxy to leverage its in-house capabilities. The agreement also provides for a favorable pricing structure for goods and services to be provided by the services provider's various integrated companies.
Surveying, permitting, and location preparation for access and drilling are underway for the drilling of Galaxy's first operated well in the Piceance Basin, which will be located in Garfield County, Colorado. Drilling of the well is expected to commence by mid-November 2005 and will be followed by a continuous drilling program in the project area.
Mark E. Bruner, Galaxy's Chairman and CEO, stated, "This new agreement is a significant step forward in the development of Galaxy's Piceance Basin project. It will allow us to launch and maintain an aggressive drilling program in the basin."
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