Mesa Energy Holdings provided the results of an independent engineering review of the material assets of the Company in the Java Field located in Wyoming County, New York.
This review was prepared by Jeffrey A. Chadwick, an independent licensed petroleum engineer on July 10, 2009, prior to the Company’s acquisition of mineral rights to approximately 3,200 acres in the Java Field. Chadwick's review was based on an analysis of a 7,000 acre field, therefore, the Company has adjusted Chadwick's numbers downward to reflect the smaller acreage acquired. The Company's existing natural gas acreage in Wyoming County, New York is estimated by Chadwick, as adjusted by the Company, to have potential gas in place in the Marcellus and associated shales in a range from 106 billion cubic feet (BCF) at 50 feet of shale thickness to 425 BCF at 200 feet of shale thickness. Accordingly, potential recoverable gas reserves using a 25% recovery factor and 200 feet of shale thickness would be approximately 106 BCF.
Based on 106 BCF of potential recoverable reserves in the shale, the Company projects total potential net revenue over the life of the project to be as much as $405 million gross before expenses, or $332 million net of expenses ($151 million at PV 10). These projections are based on a price of $5 per thousand cubic feet (MCF) of gas.
"We are very pleased with Jeff Chadwick's findings regarding the potential of the Marcellus and associated shales in the Java Field," said Randy M. Griffin, CEO of Mesa Energy Holdings, Inc. "In addition to the Marcellus, we believe there are multiple stacked pay zones present in the field, including the Utica Shale, and that there is also significant potential for enhancement and expansion of the Medina Sandstone using modern technology."
"We have completed the evaluation of our 19 existing wells and have determined which wells will be selected for testing of the Marcellus Shale as well as the best locations for the drilling of new wells. We believe we have the team and the expertise to develop our Java Field project to its fullest potential," added Griffin.
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