The New Waverly Prospect currently totals over 3,100 acres consisting of two Areas of Mutual Interest ("AMI"). Horizon holds a 25% WI in the first phase of the prospect currently comprising approximately 400 acres and a 37.5% WI in the second phase of the prospect currently comprising approximately 2,700 acres. Horizon has the right to participate in additional lands acquired within both AMI's in proportion to its Working Interest ownership.
Horizon is paying US $78,750 cash consideration plus 200,000 shares in the capital stock of Horizon Industries Ltd. to Pan American Production Company, Inc. ("Pan American") or its nominee(s), at a deemed price of CDN $0.25 per share in respect of this acquisition. In addition, upon the successful completion of six wells on the prospect lands, Horizon will pay further consideration to Pan American equaling US $60,000 in shares of Horizon to Pan American or its nominee(s).
Pan American is the operator of the New Waverly Prospect and has successfully completed drilling of the first of up to 40 prospective wells in several shallow formations. The Hammond #1 well will be tied into sales upon acquisition of an existing tie-in and production facility on adjoining lands, which is expected to conclude within the next several days. Sales line installation is currently underway. It is anticipated that an independent four point flow test will be conducted and the well turned to sales within two weeks. Geologic evidence also supports prospectivity in the deeper Yegua, Cook Mountain, and Wilcox formations.
Pan American is an oil and gas production company specializing in low risk oil and gas prospects where opportunity exists to generate high return through production enhancement and application of exploration techniques. Pan American currently holds production and prospects covering approximately 30,000 acres in Texas.
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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