Brinx Expands Natural Gas Interest in Palmetto Point

Albuquerque-based Brinx Resources has agreed to purchase for cash a 10% interest in a new 10-hole drilling program at Palmetto Point, Mississippi. The targets are primarily but not exclusively natural gas, and the first drilling is expected to commence during the month of March.

"Depending upon the success of this ten well program, we are most interested in our ability to participate in a long-term development project of potentially over eighty wells at Palmetto Point," said Leroy Halterman, President of Brinx Resources, who added that "this project has the potential to deliver significant value to our Company."

Drill locations are typically identified by 3D seismic, and the company notes that more than 80 targets have already been identified. The operator, Griffin Exploration, has acquired or shot extensive areas of both 2D and 3D seismic and has a long history of operations in the area. It has used seismic "bright spot" technology, which helps to identify gas reservoirs and to delineate the reservoir geometry and limits. Utilizing these critical factors has improved reserve estimates and the geologic success ratio.

The drilling program will consist of the drilling, logging, testing, completing, and equipping for production (or, if applicable, the plugging and abandonment) of ten wells. Griffin anticipates drilling to a subsurface depth equal to such depth as is necessary to penetrate the sands of the Frio Formation identified as potentially productive of oil and/or gas.

The prospect wells are located in the Frio Geological formation. Frio wells typically enjoy low finding costs and have a high degree of success. The gas targets occur at shallower depths and have minimal completion costs.

The Frio in the area of Southwest Mississippi and North-Central Louisiana is a very complex series of sand representing marine transgressions and regression and therefore the presence of varying depositional environments. Structurally, the Frio gas accumulations are a function of local structure and/or structural nose formed as a result of differential compaction features. However, stratigraphic termination (i.e., up dip shales outs of sands) also plays a role in most Frio accumulations. The stratigraphy is so complex that seismic HCL evaluations are the only viable exploratory tool for the Frio prospect.

Brinx expects the acquisition to close within 30 days.