Mainland Resources, Inc. has signed a Letter Agreement to acquire 5,000 net acres in Mississippi where the Company plans to drill the first test well to evaluate the potential Haynesville Shale gas formation in the region.
Under the terms of the Letter Agreement, Mainland Resources, Inc. will acquire 100% Working Interest and 75% Net Revenue Interest on all gas formations within the 5,000 net acres ("the leases"), which are located in southwestern Mississippi within the Mississippi Interior Salt Basin.
A number of USGS and US Department of Energy resource assessments have been commissioned over this area over the last decade. All report the deep gas potential of the area, pointing to the Upper Jurassic as a favorable exploration target. According to public records, no wells have been drilled to test the Haynesville Shale formation in the target region to date.
Company President Mike Newport commented, "We have data that suggests the potential Haynesville Shale in this region could be similar in nature to the gas bearing Haynesville Shale in northwest Louisiana. Our geological team believes that this could be just as productive as the groundwork that's been laid in the Louisiana play.
"No one knew just how good the deep shale in northwest Louisiana was until an exploration company stepped up and drilled the Haynesville, Hosston and Cotton Valley formations. That's what we're setting up to do in this potential new Haynesville shale play in Mississippi," added Newport.
The Letter Agreement for the acquisition of the Leases is set for closing on or before October 15, 2008 and is subject to standard due diligence review by Mainland Resources, Inc.
Mainland Resources, Inc. is on schedule for its first Haynesville test well with joint-venture partner Petrohawk Energy in De Soto Parish, Louisiana. The Griffith No. 1-H well is stated in the JOA as having a target depth below 10,360 feet in order to test formations. Petrohawk, which will act as operator on the Griffith, has stated that the rig is on schedule and set to spud the well and drill as planned in September 2008.
According to industry sources, the Haynesville Shale is now regarded as the 4th largest natural gas field in North America, with the leading exploration company in the play announcing it is projecting 52 BCF (Billion Cubic Feet) of gas per section in the Haynesville fairway.
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