Texon advised that the second well on its Leighton Prospect, Tyler Ranch #1, is flowing oil and gas at the rate of approximately 420 boepd comprising some 260 bopd and 950 mcf of gas per day through a 10/64" choke, at a flowing pressure at the surface of about 2,900 psi. This is a smaller choke than used at the first Leighton well ("Peeler #1") which flowed about 400 boepd through a 16/64” choke at 1,500psi and this indicates that Tyler Ranch #1 is performing better than Peeler #1.
Tyler Ranch #1 is already connected to oil tanks and a gas sales pipeline so that the Company will now begin to obtain revenue from the production.
Texon has a 70% working interest (52.5% net revenue interest) in the Tyler Ranch #1. Shareholders and investors are referred to the Company’s 2008 Financial Report which set out our plans for the Leighton oil and gas field at that time.
The successful testing of Tyler Ranch #1 together with the first Leighton well (Peeler #1) has established a further nine (9) 40 acre proved undeveloped well locations contiguous with the Peeler and Tyler Ranch wells. Successful drilling of these locations could establish nine (9) more well locations which if successful would bring the total number of Leighton production wells to 20.
We have begun discussions with petroleum rights owners on additional prospects in the Leighton area that offer similar multi-well development potential if leases can be acquired and drilling is successful.
We also now plan to investigate the debt funding of drilling several more Leighton production wells in the second half of 2009 with oil and gas production from successful wells to begin early in 2010. If this program is successful, and the number of Leighton area potential well sites is along the lines set out above, then the Leighton production drilling program would most likely continue into 2010, subject of course to satisfactory well production performance and commerciality at prevailing oil and gas prices.
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