The agreement calls for Matrixx to acquire an undivided 57% interest covering 280 acres of land in Colorado County, Texas. Shallow development wells will be drilled on the property and completed to produce by-passed and attic gas reserves. The first well will be drilled to a depth of approximately 4,500 feet.
Drilling is expected to begin approximately August 15, 2006. Recoverable reserves for the project are estimated at 2 to 3 BCFG (Billion Cubic Feet of Gas). Net drilling cost is expected at $170,000 and net completion cost is expected to be at $160,000.
Closing on this acquisition is expected within 15 days. Matrixx will continue to seek additional opportunities to add value to its property holdings through acquisition. Matrixx believes that these additional assets will provide the company and its shareholders a much-improved increase in shareholder value. Further, the company will be filing the required forms and exhibits with the SEC and sending notice to shareholders on a timely basis. Terms and conditions of the transaction will also be provided in the aforementioned notices.
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