Nextraction Energy has successfully drilled, logged, and set production casing on the Mountain Minerals #5 vertical well as part of its initial evaluation and development of its ongoing unconventional shale gas program in the Appalachian Basin, near the Kentucky and Tennessee border.
The Mountain Minerals #5 well was 100% funded by Nextraction. The project is under the field direction of Nextraction's operating partner, Vinland Energy LLC, and monitored by Nextraction's VP of Operations, Dr. Paul B. Trost. The well reached total depth of 2,521 feet (768.4 meters) on March 17, 2010. Production casing was set to total depth in anticipation of completion activities. The Company invested approximately $170,000 (US) to drill and set production casing, which is within the projected budget for the project. The Company anticipates completion expenditures of approximately $120,000 to frac, complete and establish natural gas sales.
Gas shows, as defined by both electric log interpretation and visual observation, were evident in the secondary targets of the Big Lime, Knifely, Ft. Payne, and Waverly formations.
Nextraction's primary target, the Devonian-age Chattanooga Shale formation, was encountered from 2,323-2,408 ft. (708-734 meters) as expected. Nextraction is pleased to report that a naturally-occurring gas show, near the top of the Chattanooga shale, was observed.
Based on initial log review, the shale character of the Mountain Minerals #5 well is similar to the core data of the George Brown #3 well that was previously drilled and evaluated by TerraTek, Inc (a Schlumberger company), for shale gas properties. The George Brown #3 well was cored in June of 2009 with the sole purpose of evaluating the mechanical properties and reservoir quality of the Chattanooga shale. Third party consultants' review of the Chattanooga reservoir rock properties within the area of interest in Whitley County, KY and Campbell County, TN, coupled with analysis by Nextraction's internal geochemist and VP of Operations, Dr. Paul B. Trost, showed that the reservoir rock parameters and contained gas content appear favorable for shale gas development.
The George Brown #3 core is located approximately 12 miles northwest of the Mountain Minerals #5 well.
The Company plans to conduct a complete evaluation of the log of the Mountain Minerals #5 well and design a comprehensive, multi- stage frac program, not only for the main target zone of the Chattanooga Shale interval, but also for the additional gas bearing zones encountered in the secondary targets.
Fracing and completion of the well is anticipated to occur within the next 8 weeks. A gas pipeline is located approximately 500 ft (152 meters) from the wellhead, and initial flow rates will be produced directly into the gas sales pipeline.
"Within two months, we have successfully drilled the initial Proof of Concept wells on both our Appalachian Basin and Pinedale Anticline projects," says Mark Dolar, President of Nextraction. "We believe our accelerated progress towards production and generating revenues speaks highly of our technical team, and will add significant shareholder value moving forward."
In addition to the completion planning on the Mountain Minerals #5 well, Nextraction is currently planning a completion program for the recently drilled Noble 6-24 well on the Pinedale Anticline in Sublette County, Wyoming.
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