Only one well from the Phase II program has been connected. Additional wells from both Phase I and Phase II are expected to be connected and producing soon. Our Mississippi Area of Mutual Interest (AMI) has over 7,500 miles of 2D seismic and 250 square miles of 3D seismic already shot which have identified over 100 drill targets. The immediate focus area, Palmetto Point, is a 32,000-acre area within the much larger AMI of over 200,000 acres. We are exploring for and during the last year have encountered both oil and gas bearing zones in this drilling program.
In Oklahoma, the Isbill #2-36 well has been producing oil and gas for several months. Production has stabilized at approximately 40-45 barrels oil per day and 10Mcf/d natural gas. Lexaria has a 7.5% interest in this well and remaining drilling prospects in this Owl Creek property.
In recent drilling operations, the PP F-111, which was spud on August 11th has reached total depth. Sidewall cores indicated a non-commercial natural gas encounter and as a result this well is being plugged and abandoned.
Production of natural gas has generally increased during 2007 as additional wells have been connected and existing wells optimized. Gross production has been as follows:
Phase I Production (20% - 30% WI) April 16,503 mcf May 16,360 mcf June 18,176 mcf July 23,156 mcf Phase II Production (45% WI) April 3,621 mcf May 3,212 mcf June 2,920 mcf July 2,788 mcf Total Production (20% - 45% WI) April 20,124 mcf May 19,572 mcf June 21,096 mcf July 25,944 mcf
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