The fracture stimulation for the Mitchell #5-H well is currently scheduled for the second week in August 2006. Terax will continue working to secure a frac date for the Mitchell #6-H well.
For the month of June 2006, Terax produced 912 mcf per day gross equivalent and 743 mcf per day net equivalent from the Mitchell #1-H, #2-H and #3-H wells, with the #3-H well producing for 24 days during June, due to its completion schedule. Terax's natural gas sales delivered into the Louis Dreyfus pipeline for the month of June were 20,610 gross mcf and 16,797 net mcf, which were net of fuel and shrinkage. In addition, Terax sold 576 bbls gross and 469 bbls net of oil for the month.
“With each well completion, we are fine tuning the fracture stimulation formula to produce the optimum natural gas rates,” said Lawrence Finn, Terax’s president, CEO, and chief financial officer. “We are encouraged by the higher production rates for #2-H and #3-H wells and look forward to completing the Mitchell #4-H, #5-H and #6-H wells this quarter. Terax's first six wells drilled represent E&P efforts without significant geological modeling. For the past two months, the company has been developing a refined model of the Barnett Shale geology within our acreage to help guide future drilling activity.”
The natural gas production rate of the Mitchell #3-H well, which began production on June 7, 2006, increased to approximately 650 mcf per day and then declined to approximately 390 mcf per day on a 32/64 choke. On July 20, 2006, Terax opened up the choke on the well, and the production has since increased to approximately 800 to 1,000 mcf per day. The well currently has a casing pressure of approximately 780 psi, a flowing tubing pressure of approximately 300 psi, and is producing approximately 45 bbls water per hour.
On July 14, the compressor servicing the Mitchell #1-H and #2-H wells developed a significant mechanical problem, and the wells were shut-in. A new compressor is currently being installed and was slated to resume operation on Monday.
The Mitchell #2-H well, which began production on May 22, 2006, has produced natural gas at rates up to 640 mcf per day and 44 bbls of 40 gravity oil per day. The well was producing at approximately 300 mcf per day and 15 bbls of oil per day on a 34/64 choke on July 14, 2006, when the well was shut-in. The well had a casing pressure of approximately 450 psi, a flowing tubing pressure of approximately 90 psi, and was producing 6 bbls water per hour.
Terax continues to chemically treat the bacteria issue in the Mitchell #1-H well, which began production on April 10, 2006. To date, the company has seen no change in production as result of the chemical treatments, which allow the well to keep producing. The well has produced natural gas at rates up to 400 mcf per day and was producing at approximately 85 mcf per day on a 34/64 choke on July 14, 2006, when the well was shut-in. The well had a casing pressure of approximately 300 psi, a flowing tubing pressure of approximately 70 psi, and was producing 2 bbls water per hour.
Terax is currently laying the flow lines for the Mitchell #5-H and #6-H wells to connect to the compressor station.
Terax Energy Inc. is an independent gas exploration, development, and production company, headquartered in Dallas. The sole focus for Terax is the optimal exploitation and development of approximately 27,500 gross acres in two mostly contiguous blocks, consisting of prospective Barnett Shale development acreage located in Erath and Comanche counties, Texas.
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