Texon Enters Gas Purchase Agreement with Laser Midstream
Texon Petroleum Limited announced that with the Company's planned drilling activity in the Leighton/Mosman/Rockingham/Sutton ("LMRS") leases and the increasing Eagle Ford drilling activity anticipated in surrounding areas over the next 12-18 months, Texon entered into a gas purchase agreement with a Texas based company, Laser Midstream.
Laser constructed a new 6km gas pipeline connecting the Leighton area to the Enterprise pipeline system. Enterprise represents one of the largest transporters of gas and natural gas liquids in the Eagle Ford trend.
The Laser pipeline provides some 20mmcfgpd capacity, adequate to support the Company's production needs from the LMRS leases for the foreseeable future.
In 2012, Enterprise plan a new gas trunk line for the area which will provide addition outlets for the LMRS gas if the production exceeds the Laser pipeline capacity.
The Company is finalizing arrangements to build a 4km spur gas line from the Laser pipeline to the Company's second Eagle Ford well (Teal EFS #1H). This line will be in place in time to take gas production from the second Eagle Ford well when it is tested in March.
David Mason said "this is an important initiative because it secures access to markets for all of the gas and natural gas liquids produced from the Leighton/Mosman/Rockingham/Sutton leases. The Laser pipeline is already being used to transport the gas and natural gas liquids from the Company's first Eagle Ford well and six of the Olmos producers at Leighton."
Oil and gas futures prices (Source: NYMEX February 2011 contracts)
- Oil: US$89.94/bbl
- Gas: US$4.11/mmbtu (approx. US$4.70/mcf for all Texon gas - including US$6.60/mcf for LMRS, Eagle Ford and Olmos gas).