Teon issued an update on its Leighton-Mosman-Rockingham projects. It has a 70-100% WI in 4,500 acres of leases over these projects, where there are two reservoir targets. These are the Olmos which is the oil and gas producing reservoir in the Company's five (5) producing vertical Leighton wells and which covers 3,000-3,500 acres, and the Eagle Ford which has 142ft (43m) of pay in the Company's vertical Tyler Ranch #4 well (the fifth Leighton Olmos producer), and which is expected to be present over the entire 4,500 acres.
In recent months, USA company Swift Energy has reported on three (3) of the four (4) horizontal wells drilled into the Olmos on the southern end of the AWP field which lies immediately south-east and east of Leighton and Mosman-Rockingham. The horizontal Swift wells achieved initial production rates of 8.1–11.5mmcfgepd (or 1,350–1,900 boepd), some 10 times higher than adjacent vertical Olmos wells which had initial production rates of 0.5-0.7mmcfgepd (80-115 boepd). In the Company's Leighton field the average initial production rate of Texon's five producing vertical wells was 433boepd.
There has been an increase in Eagle Ford drilling in the vicinity of the Company's Leighton–Mosman–Rockingham leases. Five (5) horizontal Eagle Ford wells are either drilling or have been "permitted" to drill near Leighton-Mosman-Rockingham. Three (3) by XTO Energy are located 3.8 miles to the south east of Mosman-Rockingham. Swift's well 1.6 miles (2.5.km) south-west of Mosman-Rockingham has been drilled and awaits testing. The surface location of the fifth well (by Swift) is some 200m (600ft) south of Leighton and site preparations have begun.
Olmos and Eagle Ford significance for Texon
Texon's Leighton-Mosman-Rockingham leases are located in the vicinity of recent very successful horizontal Olmos and Eagle Ford wells, and two Swift Eagle Ford wells close to these leases are about to be tested or drilled. The Swift Olmos horizontal wells indicate the potential outcomes from successful horizontal Olmos wells at Leighton-Mosman-Rockingham. Swift Eagle Ford success near Leighton-Mosman-Rockingham will further enhance the value of these leases. The Company is actively investigating the
drilling of Olmos and Eagle Ford horizontal wells in Leighton this year.