The new lease is projected to be the first drilling target for the Company to be conducted in the Barnett Shale, with drilling scheduled to commence this month. The Company plans to drill horizontal wells on the Barnett Shale gas target estimated by management to be approximately 350-375 feet thick according to offsetting wells drilled by Encana Oil & Gas Inc., and XTO Energy, Inc. Further leases in the area are also under evaluation by management for possible acquisition.
The lease is under evaluation by management for horizontal well layout and well design. The Company's drilling rights on the acquired acreage relate primarily to the Barnett Shale gas target at approximately 7,000 feet. This is the Company's second land acquisition in the Barnett Shale since diversifying its lease inventory to Texas from a Coal Bed Methane bias in the Arkoma Basin in Oklahoma. The Company now holds a total of approximately 2,637 net mineral acres of Barnett Shale gas target lease acreage.
About the Barnett Shale: According to the American Association of Petroleum Geologists, over 1 trillion cubic feet of gas has already been produced by the Dallas Fort Worth area Barnett Shale play. Current well completions average 1.5 wells per day. The Barnett Shale produces more than 50% of all shale gas produced in the United States. Using a geology-based assessment methodology, the U.S. Geological Survey estimated a mean of 26.7 trillion cubic feet (TCF) of undiscovered natural gas, a mean of 98.5 million barrels of undiscovered oil, and a mean of 1.1 billion barrels of undiscovered natural gas liquids in the Bend Arch-Fort Worth Basin Province.
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