Mainland Notes Program Costs for Burkley-Phillips Well
Mainland has finalized the Authorization For Expenditure cost estimate (the "AFE") for the completion program for the Burkley-Phillips #1 well drilled in Jefferson County, Mississippi. The forecasted costs for the completion program are approximately $8 million to be shared on a 90/10 percent basis between Mainland and joint venture partner, Guggenheim Energy Opportunities LLC. The completion will allow the Company to flow test the well and further determine its resource potential.
The Company is in the process of obtaining and evaluating bids from several industry leading companies to execute the frac stimulation and will select a provider from bids received. Additionally, Mainland is selecting other service providers for the completion program along with ordering longer lead equipment as previously announced.
Mainland expects to commence completion operations during the third quarter of 2011 and anticipates a timeline of approximately three to five weeks.
Mainland and its working interest partners control in excess of 17,800 net acres or 28 sections on the Buena Vista prospect area where the Burkley-Phillips #1 well was drilled to 22,000 feet, cored and logged. Upon successful completion of its proposed merger with American Exploration, Mainland would own 92% of the 28 sections in the Buena Vista prospect. As recently announced, core analysis has determined that gas in place in the Buena Vista prospect could be up to 500 BCF/section based on the cored interval.