Saxon Oil Gears Up for More E&P Activity

Saxon Oil Company has commenced drilling on its Arnold Rust 2-3 development well. Saxon is the second largest working interest owner in the 10,400-ft Cotton Valley well with an 18.7% interest. The Rust 2-3 well, operated by Comstock Resources, is located in the North Tatum field in Rusk County, Tex., which is a prolific gas-producing field. The gross completed well cost is estimated to be more than $2 million USD. Saxon expects this well will reach target depth by mid October.

A second development well, the Arnold Rust 1-3, will be drilled immediately after the completion of the Rust 2-3 well, using the same drilling rig. Comstock Resources will act as operator on this well, in which Saxon again has an 18.7% working interest. The Rust 1-3 well costs are anticipated to be the same as the Rust 2-3 well.

Saxon Oil Company commenced drilling on the Jackson-Williams #3 development well in early September, in which Saxon owns a .085% working interest. The operator, Tri C Resources of Corpus Christi, Tex., has set intermediate casing below 10,000 feet and intends to continue drilling to a proposed total depth of nearly 14,000 feet. Drilling is expected to be completed by early October.

The operator in New Mexico has now staked the Eumont State #1 well, in which Saxon previously announced its participation. The well is located in Lea County and will be drilled later this year. Saxon has a 20% working interest in this well.

Earlier this month Saxon acquired interest in 30 Kansas wells in two previously announced transactions. These acquisitions, combined with the acquisition of non-operated working interests in 17 wells in New Mexico, nearly double Saxon's net production in barrels of equivalent oil per day. Workover and basic maintenance activity have been completed on three leases in New Mexico with successful results, and Saxon has begun work on several of its wells in Kansas. The company hopes to maximize production and decrease lease-operating expenses with the Kansas work, which should take several months to complete. Further, Saxon anticipates drilling several development wells on its recently acquired leases in Kansas during late 2007 or early 2008.

Saxon currently owns interest in 108 oil or gas wells in Texas, Oklahoma, New Mexico, North Dakota, Kansas, and Louisiana. Saxon has completed four acquisitions since June 2007, with plans to acquire more properties that complement its existing production and technical capabilities.