Black Dragon announced the closing of the agreement to acquire an interest in a 640 acre lease in the Caddo-Pine Island Field in Caddo Parish, Louisiana. This was reported in progress in earlier releases. This is a very attractive oil and gas region. Black Dragon has rights from the surface down to the top of the Haynesville Shale reservoir, and the depths below the Haynesville. However, as a good extra, the Company also obtained a royalty override in the Haynesville. The Haynesville is a highly productive gas zone at depths around 9000 ft. A major gas company has the majority interest in this Shale in this lease. The Haynesville Shale stretches across East Texas and North Louisiana. It has been highly productive and has been exploited most recently by several major gas companies for its immense reserves. Holding a percentage in the Shale is an attractive economic asset for Dragon.
Black Dragon CEO, Dr. Bailey, reported that on one side of the new lease, a new well was drilled that is producing around 29 mmscf a month and 190 barrels of oil. On the other side of Dragon's lease is another new well, perhaps the largest ever in the Cotton Valley zone there, producing 11 mmscf per month. This bodes well for the Dragon potential with a number of oil and gas zones.
Dragon has engaged Petrolind Drilling Co. to drill two gas wells as soon as permits are approved by the Department of Conservation. It is expected that drilling will commence within the next 60 days in the Nacatoch zone around 1000 ft. In this upper zone, Dragon has an 80% revenue interest, with a 75% working interest. The potential of this lease remains to be proven, but these first two wells have the potential to add attractive reserves. Pending commercialization of this project, it will open the opportunity for several more wells in this program. Also below the gas zone there are other oil reservoirs that might also be targeted.
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