An exploration well is planned to spud in November 2007. The exact timing of the well is dependent on rig schedules. The prospect to be drilled, named the Big Ugly Fat Boy (BUFB) is a shallow target identified with high quality 3D seismic. The prospect has a strong amplitude anomaly very similar to thick gas pays in adjacent blocks. The prospect has a potential gas resource of between 8 to 40 BCF.
Entek will earn a 15% Working Interest in the Blocks by paying 20% of the first well to casing point. Thereafter, Entek's participation cost will revert to 15%. In the event that the initial exploratory well is successful, the joint venture plans to drill a second well to enable confirmation of connectivity through a large portion of the reservoir and prove sufficient reserves to justify development. The cost to drill and evaluate the exploratory well is approximately US$4 million. The follow-up well will be a similar cost.
Commenting on the farmin, Entek Chairman Mr. Russell Brimage said "the participation in this farmin further demonstrates our commitment to the Company's growth, focused on the continental shelf of the Gulf of Mexico where robust exploration targets can be identified using high quality 3D seismic and regionally experienced geo-scientists."
The farmin follows closely recent announcements made by the Company:
Production start-up at the High Island 24L Block on October 18th 2007.
Entek (through a wholly owned subsidiary) was high bid in the recent US Minerals Management Service, OCS Region, Central Gulf of Mexico Sale No. 205, held October 3rd 2007 on lease OCS G31602, Garden Banks Block 115, in which it will hold a 100% Working Interest. Award of the block is subject to MMS approval.
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