Black Dragon & Petroleum Partners to Develop Denton Field

Black Dragon Resources is entering into joint venture negotiations with Petroleum Partners, Inc. The joint venture involves the Denton Field located in Denton, Texas. This field contains approximately 2000 acres with a potential of 50 wells. There are currently 9 wells on the field 4 of which are producing. Currently these wells are producing revenues of approximately $40,000 per month.

There are three confirmed pay zones from the geological studies: the Consolidated, Caddo Lime and Barnett Shale. The Consolidated has been producing for over 50 years. Although The Caddo Lime and Barnett Shale have not been developed, they are commercially feasible in both gas and oil. The Caddo Lime has 30 - 40 feet of pay sands, whereas the Barnett Shale has as much as 900 feet of pay.

During the past 10 years, the Barnett Shale has become one of the most "Significant Gas Play's" in the Continental United States. Due to its organic richness, petroleum potential and thickness, it has been termed a "World Class" petroleum source rock. The United States Geological survey has estimated there are 10 trillion cubic feet of recoverable gas in the region. There is little doubt that the Barnett Shale has made Mitchell Energy & Development Corp. one of the biggest producers of natural gas liquids. Mitchell's holdings in this region (approximately 600,000 acres) were a large contributing factor when Devon Energy stepped up to the plate and acquired Mitchell for $3.5 Billion. Further testament to the richness of the area is that as of February 2002 there were some 1120 wells (operational and permitted) in the field, operated by 33 companies. This was up from 120 wells in 1994. Probably the most impressive statistic is that there were approximately 700 Barnett Shale Wells operational with NO DRY holes. Mitchell Energy reached its success through the discovery of the Barnett Shale and the reason the Denton lease has not been developed was due to the fact that there wasn't a pipe line to sell through. However, in 2003 all easements and pipe lines were completed.

The Company's plan in moving forward on the Denton Field is as follows:

  • The Company will rework three of the wells for a total cost of $300,000. The Company estimates that this would increase the yield from each well to $200,000 of oil and gas revenues per well per month.
  • The Company's plan is to drill 17 new wells on the first 800 acres on the field. The cost to drill these new wells (approximately 9000 feet) is approximately $1-1.5 million per well. The Company estimates that each well will have the potential to produce approximately 30 Million cf of gas and 3,000 barrels of oil which is equivalent to $250,000 of oil and gas revenue per well per month ($3 million per well per year).