Eagleford has acquired from an arms length party a 10% working interest (7.5% net revenue interest) before payout and a 7.5% working interest (5.625% net revenue interest) after payout of production of the sum of $15,000,000 gross (the "Interest") in a Mineral Lease comprising approximately 2,629 gross acres of land in Zavala County, Texas (the "Matthews Lease"). As consideration for the Interest the Company paid USD $200,000, satisfied by $25,000 paid in cash on closing and a $175,000 5% secured promissory note. The acquisition has closed in escrow pending receipt of Defensible Title to the Interest in the Matthews Lease.
The Matthews Lease
The Matthews Lease is located in Zavala County which is part of the Maverick Basin of Southwest Texas and downdip from the United States Geological Studies (USGS) north boundary of the Smackover-Austin-Eagle Ford total petroleum system. Although the property comprises multiple prospective stacked formations, the two initial formations on the Company's newly acquired Interest in the Matthews Lease targeted for production are light sweet crude oil from the Eagle Ford Shale and heavy oil from the San Miguel formation. The Eagle Ford Shale, which blankets the region, is located directly below the Austin Chalk formation at approximately 4,600 feet, and above the Edwards limestone formation. The Matthews Lease is surrounded by Eagle Ford Shale acreage leased and drilled by Petrohawk Energy's 87,000 acre "Red Hawk" land block, and situated in the "oil window" section of the Eagle Ford Shale play. Petrohawk Energy reported oil production rates of 350 BOPD on their recently completed initial well on Red Hawk and are in the process of drilling an additional well on the property. The San Miguel formation contains 5 stacked sands including A, B, C, D1 and D2 with estimated original oil in place of approximately 150 million barrels.
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