Nextraction announced that MHA Petroleum Consultants estimates Original Gas in Place ("OGIP") ranges from 419 Billion Cubic Feet ("BCF") to 2.5 Trillion Cubic Feet ("TCF") with a most likely/best estimate of 903 BCF for Nextraction's Appalachian Basin Chattanooga (Devonian) Shale prospect.
The evaluation carried out by MHA assumed a 100% working interest in the project area and utilized high, most likely, and low scenarios to estimate OGIP. Combining the high case scenario OGIP of 22.846 BCF per 640 acres with the total Nextraction holdings of 70,130 acres gives an estimated gas in place for this prospect of 2.5 TCF. The most likely and low scenarios give gas in place volumes of 8.242 BCF/640 acre section and 3.825 BCF/640 acre section, respectively.
Mark S. Dolar, President of Nextraction, said, "We are extremely pleased with the results of our drilling and investigation in this new part of the Appalachian Basin. This play fits our model of using our technical knowledge to extend into new areas along known plays. Our results clearly indicate the Devonian Shale gas opportunity extents into our area of interest."
Traditional natural gas production in this region produces from formations overlying the Devonian shale which were not considered in the MHA study, but will add to the production potential of the acreage.
Nextraction's next actions will include completing the vertically drilled Mountain Minerals #5 well in the Devonian shale and three overlying formations to test initial flow rates for the well. Then the Company plans to continue its drilling program that includes completing three additional wells in 2010 and 25 wells by the end of 2011. Nextraction currently holds a 95% interest in the first 30 wells drilled in the Appalachian Basin project area, and its joint venture partners will have the option to participate as 25%-35% interest owners after the wells reach payout of invested capital. Thereafter the Company will own 47.5% of the undeveloped leasehold.
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