Galloway Energy has further evaluated the previously mentioned 2D and 3D seismic work in order to establish target objectives in relation to the Company's two natural gas exploration and development projects.
The projects are situated in the Central Valley of California, in a currently prolific gas-producing location. Galloway has acquired a 10% working interest in the two gas plays from Swiss corporation Dominus Energy AG. The projects' potential meets Galloway's corporate mandate of being high-value and reasonable risk that will, if commercially viable, enable Galloway to become a "near-term" producer with sustainable cash flow. The Company has positioned itself through these acquisitions into becoming a producer of natural gas late in the 2009 calendar year.
The two projects have the combined potential to contain over 50 BCF gas and thus, Galloway's 10% working interest in the projects would net 5 BCF of gas to the Company. Galloway has executed an agreement to acquire these two projects by paying 10% of the acquisition and development costs. The two plays have completed extensive engineering including 2D and 3D seismic across multiple target objectives including several rock formations showing as prospective for gas and which are undergoing final selection as well locations for a 2009 drilling program. The targeted locations are very close to existing production that has produced 100s of BCF gas and are also in close proximity to pipelines and other key infrastructure.
Galloway believes there is a high probability of success for the completion of commercially viable gas wells on the target lands. Analog production from nearby wells in the area is currently in the 1,000 to 2,000 Mcf per day range and all preliminary indicators suggest that a similar outcome is a reasonable expectation at this time.
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