According to Lexington, production from this single well could potentially double the company's production over its current Arkoma Basin Coal Bed Methane gas production. This important new resource underscores Lexington's strategic decision to expand production to the Barnett Shale play in Texas, states the company.
Frac Tech Services is scheduled to frac the Barnett Shale zone from April 12 to 14 in order to stimulate gas production for maximum gas flows. Based on successful frac stimulation, subsequent flowback of the frac fluid and final well completion would result in Lexington Resources' first Barnett Shale Well producing and selling gas this month.
In order to prepare for final production flows, a 300- to 400-foot pipeline will be constructed to tap into the existing gas line on the lease. Lexington is negotiating pipeline right of way permitting and has completed contractual arrangements pertaining to well tie-in, metering, transportation, gas treatment and compression, and gas marketing.
A workover rig is scheduled to perforate and further prepare the well this week in advance of the scheduled frac stimulation. In addition, tank battery and production equipment is also scheduled for delivery and installation this week. The frac pit next to the well has been filled with at least 80,000 bbls of water and is built to accommodate the entire frac requirements of the Oliver Unit #1H well in addition to subsequent well(s) on this lease.
Lexington acquired the Oliver lease with a 100-percent working interest and a 70-percent net revenue interest in the 312 acres obtained. The Barnett Shale gas target is estimated by management to be approximately 350 to 375 feet thick, according to offsetting wells drilled by EnCana Oil & Gas and XTO Energy.
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