Through the Company's wholly owned subsidiary, Horizon Industries (USA), Ltd., Horizon has acquired a 25% working interest in the initial phase of the prospect with an option to acquire up to 37.5% working interest in the balance of the prospect currently comprising a total of 3,100 acres (75% net revenue interest).
The initial phase calls for the development of 400 acres of Jackson sands at a depth of approximately 2,800 feet. Drilling of up to five wells is contemplated on the initial 400 acres, with reserve potential of one to two Billion Cubic Feet ("BCF") of gas from the sand at 2,800 feet. The acreage may also host a second gas charged Jackson sand at approximately 3,100 feet based on logs from nearby wells. No reserves have been assigned to this stratigraphic trap, but the sand has produced gas in several wells in the immediate area. There is geological evidence for an additional 40 locations on existing leasehold and the possibility for even more (up to 80) potential locations if the geologic model associated with this prospect is accurate.
"It is exciting for a play to incorporate both low risk development drilling, and significant exploratory upside," said Denver Gartner, President of Pan American Production Co., Inc. "A second phase may expand the play from its current 3,100 acres, to over 6,500 acres. Associated with the two potentially productive Jackson sands, excellent Yegua, Cook Mountain, and Wilcox producing formations exist in the area."
North of the Companies' acreage, the lower Jackson has produced in excess of 1.8 BCFG from a Jackson well at less than 3,000 feet. The Yegua has produced in excess of 1.5 BCFG from a 4,000 foot well. Furthermore, a nearby 5,000 foot Cook Mountain well has produced over .75 BCF and over 4 BCFG was produced from a normally pressured Wilcox well (under 12,000 feet depth). The prospect area is also on trend with the Double A Wells Field in Polk County which has produced to date in excess of 387 BCFG and 18 million barrels of oil. All these formations are legitimate targets in the prospect area. There is drilling activity currently under way targeting each formation, on trend to this prospect.
The exploration and development plan calls for development of the initial 400 acres, and subsequent acquisition of additional existing 2-D seismic. This initial seismic acquisition will cover a one hundred square mile area and begin the process of exploring for all the other exploration targets that the Companies envision developing. Should the geological model for this prospect be accurate, exploration potential for the Jackson, Yegua, Cook Mountain, Wilcox, and Woodbine formations could achieve recoverable reserves similar to the Double A Wells Field.
The operator, Pan American Production Company Inc., was founded by Larry Hargrave, CEO, and Gartner, geologists with 34 and over 30 years of industry experience, respectively.
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.
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