Nextraction Gets Green Light to Drill in Tennessee

Nextraction Energy received permit approval to drill the Mountain Minerals #5 well located near the Tennessee/Kentucky border. The well is permitted to a depth of 762 meters (2500 feet) and will be drilled to test an unconventional Chattanooga (Devonian) Shale target in the well-known oil and gas producing region of the Appalachian Basin. Drilling will also target several known conventional zones including the Big Lime, Knifely and Warsaw formations. The rig is moving on location with plans to commence drilling early next week.

The well is the second location approved to be drilled by Nextraction and its partners in the highly fractured region of the southern Appalachian Basin. Upon evaluation of prospective target zones a completion program will be designed for the well. Estimated costs are $162,000 USD to drill and set casing, and $120,000 to complete a two stage frac in the shale.

The Mountain Minerals #5 well has been chosen as the first obligation well in the project because of its potential to encounter multi-pay horizons, and its proximity to existing pipeline and compressor infrastructure. The well is within 152 meters (500 feet) of an existing compressor, which will allow Nextraction to tie into the pipeline and sell gas immediately to generate revenue. Natural gas from the southern Appalachian Basin is sold on the NYMEX market, which renders the highest commodity prices in North America. The well is within approximately 350 meters (1148 feet) of, and on trend with, the Giles #2 well that was completed in 1993 with an initial flow rate of 5.228 million cubic feet of gas per day. The Giles #2 well produces from the Big Lime formation at 595 meters (1952 feet) deep.