The company has the right to acquire a 100 percent working interest and 75 percent net revenue interest in this project
Prospect Background
On December 31, 2010, the Company entered into an option agreement to acquire leases and available oil and gas mineral rights within a 1,000 acre tract on South Padre Island, Texas.
The land tract is part of the Padre Island Gas Field. The option gives the Company exclusive right to develop the property for a period of one year. Under the terms of the option, the Company will have full access to the land and may conduct geophysical or seismic testing to ascertain the potential gas reserves and development opportunity that may be available.
The Padre Island Gas Field is located approximately 15 miles north of Port Isabel, Texas. The field was discovered by Gulf Oil in 1960 and produced approximately 3.8 billion cubic feet (BCF) of gas to October 1, 1980 from two Miocene Sands at 6,000 feet and 6,500 feet.
Three wellbores are currently shut-in and will be re-evaluated for activation. These wells were producing 14 million cubic feet (MMCF) per month when they were shut-in in 2002. One of the wells could be recompleted at 6,000 feet, and another could be put on pump to flow gas up the backside. In addition, there is a 4 foot gas sand on water at 1,712 feet indicated by well logs and a gas core that has not been previously produced. A formation test of this sand had immediate pressure of 465 psi.
A successful completion of this sand could have potential of 2 BCF proved undeveloped reserves (PUD) of natural gas.
There is an intact pipeline available to transport gas to onshore facilities. Compression facilities could be installed to further recover gas. The wells are located on Padre Island and are accessible by road.
Under the option agreement, the company, through its partnership with Aurora Energy Partners, will have the right to acquire a 100 percent working interest and 75 percent net revenue interest in this project.
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