KFG Resources has made a new oil discovery at the Fayette Field, Jefferson County, Mississippi.
The Company's "Spring Hill No. 1" well was drilled to a total depth of 5,500 ft. and encountered two Wilcox oil sands: the "Stewart A" Sand (3870 ft. - 3880 ft.) and the "4600" Sand (3941 ft. - 3949 ft.). Production casing was set to 4,100 ft. and the well will be completed in the Stewart A Sand. A completion attempt will be made and if successful, oil sales are anticipated to begin in late June 2009.
The Company drilled a 4,100 ft. Wilcox test at a location one mile west of the Spring Hill No. 1 well, the "Wagner No. 1", and abandoned it as a dry hole. It had 7 ft. of oil show in the "Stewart B" Sand, and the geology and seismic is being reviewed to determine whether or not there is an offset location.
Finally, the Company is spudding a third shallow Wilcox test, the "Spring Meadow No. 1". It is anticipated the results of that test will be available next week.
The Company has a 100% working interest (a 70.16% net interest) in all three wells, reverting to a 74.9% working interest (59.2% net interest) at payout of all seismic, acreage, drilling, completion, taxes, and operational costs.
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