Blast Energy Services have deployed their proprietary applied fluid jetting ("AFJ") rig to Kentucky to begin working under a previously announced 100-well program with Resource Energy Technologies, LLC ("RET"). Under the terms of the RET agreement, Blast will earn a 40% share of the revenues generated from any increase in natural gas produced from the use of the AFJ rig on the field. Additionally, Platinum Minerals, Inc. ("Platinum") has expressed a strong interest in using Blast's AFJ service for a 20 to 30 well program in Eastern Kentucky on a cash-for-services basis.
"The limestone formations in Kentucky are similar to the Austin Chalk in Texas, where our process had proved to be successful at improving oil and gas production. We expect to be very active in Kentucky over the next several months fulfilling our commitments under the RET agreement and by pursuing cash-for-service contracts with Platinum and other local operators," said John O'Keefe, President and CEO of Blast.
The producing field operated by RET contains wells as deep as 1,200 feet with two separate producing zones, the Fort Payne and the Coniferous. Each zone has 20 to 40 feet of net pay which should allow Blast to jet laterally up to 90 feet in multiple directions at several intervals in each zone. Similarly, the wells operated by Platinum have multiple limestone pay zones in wells as deep as 2,400 feet.
Representatives from Platinum are planning to visit the RET well locations in the coming week, and following a successful demonstration of the jetting process, we expect to contract with Platinum for services on fields they operate in Eastern Kentucky.
Since successfully jetting several separate horizontal penetrations in wells operated by Reliance Oil and Gas in the Austin Chalk play in Texas, Blast has hired and trained a three-man rig crew on the AFJ operations and conducted further equipment upgrades to the rig to improve its operational effectiveness and consistency. During May 2009, Blast attempted some laterals in the Brown Dolomite formation in the Texas Panhandle, which were not successful. However, we plan to return to the area once the jetting procedure has been adapted for the down-hole environment encountered there.
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