One square mile of data was initially acquired over the 240-acre north tract of the lease, including adjacent acreages hosting several producing wells. Analysis and interpretation of the 3D data have identified several prospective targets throughout the property. Horizon's technical staff has been correlating the 3D data with well log data from local producing wells to compile a comprehensive data set over the lease and to reduce drilling risk.
The most prospective targets occur in the Yegua formation at approximately 5,500 feet to 5,700 feet. Three separate high-amplitude anomalies have been identified on the north tract of the property having similar amplitudes to nearby producing wells. The largest anomaly lies near the Cambridge Holland #5 well, which was drilled in 1986 directly east of the lease boundary. This well encountered 120 feet of gaseous shale sands in the Yegua formation and produced 0.1BCF of gas and 1,400 barrels of condensate. Amplitude analysis indicates this well penetrated outside the zone of high porosity, which is located within the Funk lease.
Another strong Yegua target is located in the southwestern part of the tract. A well drilled in 2002, the GeoGoliad #4, was drilled through the Yegua formation directly north of this target. Seismic profile maps indicate this well was located off the main porosity. The well log has poor porosity development in the Yegua section, which produced a marginal amount of gas. The well is currently shut in with 1,100 psi. A new location has been recommended to properly test this target.
The third Yegua anomaly is located in the northern part of the lease. Horizon plans to drill and test the first of the Yegua anomalies as soon as a rig is available.
A second target horizon identified from the 3D data set occurs in the Frio formation at approximately 2,900 to 3,900 feet. The 3D seismic coverage shows several strong gas anomalies, both produced and un-produced. Horizon's technical team continues to develop these and other prospects.
A third prospective horizon was discovered in the Catahoula formation. Production in the area, from the Catahoula, is encountered in sands from 2,000 feet to 2,600 feet. The map of the Catahoula amplitude shows a strong gas anomaly covering approximately 120 acres at an expected depth of 2,100 feet to 2,150 feet. Based upon this information and anticipated porosity and permeability values, a well location has been recommended to drill a well to 2,400 feet to test and develop this target.
The compilation of the 3D data set and well log data is providing Horizon with a strategy for its future drilling and a plan to rework two shut-in wells on the property. Results of the rework and confirmation of drill rig availability will be announced shortly. The company has received Authorizations For Expenditures (AFEs) to drill both a Catahoula well and a Yegua well and is awaiting confirmation of rig availability to drill these two wells as soon as possible.
Horizon has also purchased a further 1.5 square miles of 3D seismic data covering the southerly 160-acre tract of the Funk prospect and other adjoining lands. The company's technical team is now in the process of evaluating this data to identify and refine additional targets in the horizons described above. These findings should also be available within the next 2 weeks.
The Funk Prospect is located in the G. Barrera survey A-2 in Goliad County and consists of two tracts of land comprising 240 acres and 160 acres. It is situated in the prolific Middle Yegua gas trend, a formation that has produced gas and condensate in the nearby Maetze Yegua, Perdido Creek, and Jobar fields.
The Perdido Creek field is located 1.5 miles northeast of the Funk Prospect. Perdido Creek hosts seven producing wells with cumulative production of approximately 3-4 Bcf and 80,000 bbl. of oil and condensate from the Yegua sands. The best well in Perdido Creek, the Vrazel #1, produced 1.8 BCF and 30,000 barrels of oil and condensate from a 90-foot sand covering 36 acres. These Yegua sands appear to be similar to that underlying the Funk prospect, which hosts 2D-defined Yegua sand bodies of 35 to 50 acres in aerial extent.
The Maetze Field is located 3,500 feet to the southeast of the Funk lease. Total production from this field was approximately 5BCF. The best well in this field, the Cron Dreier, drilled in the early 1950s and blew out for more than 6 months and released up to 2 BCF of gas before being shut-in.
Horizon Industries Ltd. is an emerging oil and gas exploration and production company building a high-quality asset base in focused areas throughout the United States. The company is developing strategic alliances in high-impact oil and gas plays in Western Canada.
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