The Mitchell #3-H well, spudded on Dec. 30, 2005, is located on the company's approximately 11,300-acre block in Erath County. Terax plans to fracture stimulate and complete the Mitchell #3-H well, pending completion of the Mitchell #1-H and #2-H wells, which is targeted for mid February, as well as the extension of the company's gathering systems to the Mitchell #3-H and Mitchell #4-H locations.
As reported in the company's Jan. 17 press release, the FMI log on the Mitchell #3-H well indicated natural gas in place of approximately 30.1 billion cubic feet ("BCF") per square mile, which compares favorably to a natural gas in place calculation for the Mitchell #1-H well of 27.6 BCF. In addition to valuable reservoir information, the FMI log indicated that Terax needed to change its horizontal drilling design to avoid several formation stress faults. Terax geologists believe these stress faults are consistent with the results of the company's aeromagnetic surveys.
"We continue to be pleased with the results of our geological focusing tools," said Lawrence Finn, chief executive officer and chief financial officer. "The combination of aeromagnetic data and log imaging technology continues to allow Terax to successfully evaluate our Erath acreage while avoiding formation faulting. The Terax team is off to a strong start in 2006, and we expect to build on this momentum as we bring production of our first three wells online in the first quarter."
After minor rig maintenance, Terax plans to move its Unit Drilling Co. rig to a fourth drill site in Erath County and expects to commence drilling of the Mitchell #4-H horizontal well by Feb. 6. The Mitchell #4-H well is approximately one-half mile from the Mitchell #3-H well.
Terax is continuing construction of its gathering system, which will connect both existing and planned wells in the Erath drilling project, and the company expects to tie into the Louis Dreyfus pipeline by mid February.
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