The well, the McPeak #2, located in Denton County, Texas, will be drilled to a total depth (TD) of approximately 8,000 feet. It is an offset to Dune's McPeak #1, currently producing natural gas from the Barnett Shale at an average rate of 600 Mcfe per day. The company expects to reach TD in about 30 days. Dune owns a 95% working interest and a 76% net revenue interest in this well.
The McPeak #2 is the first of four wells that Dune has committed to drill with the same rig. In addition, Dune expects delivery of the Itera #1 rig in mid August 2006, for an initial term of 2 years. The Itera #1, which will be dedicated solely to Dune, will be capable of drilling both vertical and horizontal wells. Management expects to drill at least four wells with the Itera rig by year’s end. Coupled with the rig presently being utilized, Dune anticipates drilling a minimum of eight Barnett Shale locations this year. The company continues to seek to procure additional rigs in order to fast-forward its overall program.
"After a brief delay relating to the industry-wide difficulty of securing drilling rigs, we now embark on our aggressive drilling program, designed to exploit our high-quality acreage located on the fairway of the prolific Barnett Shale play,” said Amiel David, Dune’s president and chief operating officer. “Production and cash flow should rise appreciably throughout the remainder of 2006 and calendar 2007."
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