Magellan Energy has signed a participation agreement with TMD Energy for the Lankford Lease in Morgan County, Tennessee. The lease/agreement consists of eleven wells that are currently producing natural gas.
We are extremely excited to begin another project with TMD Energy Inc., who will be the operators of this lease. The acquisition of this lease has occurred at an opportune time, as operators in this area are now able to get their gas to market via the new compressor set in by Citizens Gas. The compressor blends the gas from all area producers thereby resolving the high BTU issue that previously prevented producers from selling their gas. The eleven wells on the property produce gas from the Monteagle formation and are currently tied into a collection system, which is tied into Citizens Gas Utility District.
The operators, TMD Energy Inc., will work with Magellan Energy to ensure that the wells continue to produce natural gas and additional revenues for both parties. Magellan has an option on this lease to frac two shale wells in the future, which would increase the gas production per well on a daily basis. These two wells will be relatively easy to frac as they are located on the thin exposed part of the Chattanooga Shale in Eastern Tennessee.
With gas production from a total number of twenty-four producing wells, The Company will continue to execute its business strategy of acquiring additional gas and oil leases. Magellan Energy is embarking on a new era devoted to achieving a profitable future for the Company.
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