Nextraction has commenced drilling the Mountain Minerals #5 well located near the Tennessee/Kentucky border.
The well is permitted to a depth of 762 meters (2500 feet) and will be drilled to test the unconventional Chattanooga (Devonian) Shale formation in this well-known oil and gas producing region of the Appalachian Basin. Several operators in the region, including CNX Gas Corporation (CXG) and Atlas Energy (ATLS), have recently had success targeting this formation. Drilling will also target several shallower conventional zones including the Big Lime, Knifely and Warsaw formations.
The commencement of the Mountain Minerals #5 well follows a nine month long extensive geologic, geophysical and technical study of the regional area, including the Nextraction/Vinland acreage. Nextraction initiated its initial study in the area by coring George Brown #3 well in summer 2009 (see news release dated October 2, 2009) to determine the shale's mechanical and petro physical make up. The location was selected based on identifying highly fractured sectors where the highly organic Chattanooga shale will be encountered. The new well is located in close proximity to existing pipeline and compressor infrastructure that will allow for immediate production and sales of initial gas flows.
"We are delighted to be starting our Proof of Concept wells in the Appalachian Basin," says Mark Dolar, President of Nextraction. "This well, and the three wells to follow (our "Proof of Concept" wells), will allow us to perfect the completion program necessary to extract the known reserves on our acreage. Our success in the Proof of Concept wells will give us the confirmation to move forward with developing up to 500 well locations in this play. By spending the time necessary to develop solid prospects to drill, we believe we have increased our opportunity to develop multiple pay zones, thereby maximizing the potential for revenue from each well drilled."
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