"This new well is in a great location, on trend with existing producers and offsetting excellent Red Fork Sandstone production to the southeast and northwest," said Richard Green, President and CEO of Saxon. "This is a low-risk development well in which we are pleased to participate. With average gross estimated ultimate recovery in the section of over 3 billion cubic feet and current prices for gas and oil, this is an attractive development location for our company and consistent with our goal to increase production and reserves."
Saxon has various working interests in four existing producing wells in close proximity to the proposed well. According to Saxon's year-end 2006 reserve report prepared by the independent engineering firm of LaRoche Petroleum Consultants, the gross estimated ultimate recovery of these four wells average more than 3 billion cubic feet of gas and 9,000 barrels of oil.
The operator, Western Oil and Gas Development Corporation, anticipates cost to drill and complete the DG Williams 3-9 well to be $2.4 million. Drilling should start in November 2007 and take approximately 30 days to reach the proposed target depth of 13,900 ft. Saxon currently owns a 1.6% working interest in the proposed Williams 3-9 well.
Elsewhere, Saxon is currently drilling two wells in Texas - the TriC Resources Jackson-Williams #3 well in Jackson County and the Comstock Arnold Rust 2-3 in Rusk County. Both wells should reach target depth in mid-October. Saxon has an 18.7% working interest in the Arnold Rust 2-3 well and 0.8% working interest in the Jackson-Williams #3 well. Saxon also plans to participate in the drilling of the Eumont State #1 well in New Mexico and Arnold Rust 1-3 well in East Texas later this year. Saxon owns an estimated 20% working interest in the Eumont State #1 well and an 18.7% working interest in the Arnold Rust 1-3 well.
With recent acquisitions in Kansas and New Mexico, Saxon now has working interests in 106 wells. Saxon has doubled its daily oil and gas production in the last three months.
Saxon Oil Company is a Tier One Texas-based Canadian company, trading on the TSX Venture Exchange under the symbol SXN. The Company is an independent oil and gas company engaged in the acquisition, development and production of oil and natural gas reserves. The Company seeks to deliver strong shareholder returns through an effective exploration and development program that incorporates sound business practices with the latest oil field technologies. The goal is to steadily increase proven reserves of oil and natural gas - which, in turn, will lead to enhanced cash flows and earnings per share.
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