Austin Exploration gets Burleson County, TX, Eagle Ford Shale acreage by closing a previously announced deal. The company closed on two prospects, which expands the company's operations into the Eagle Ford and Niobrara. A few notable points in the Austin Exploration press release are that the company believes the formation is 300 feet thick in this area of Burleson County and expects initial production rates in excess of 800 barrels per day on wells spaced at 120 acres. The expected IP would be a good well almost anywhere in the play. The working interest (WI) compared to the net revenue interest (NRI) indicates the company has a total royalty burden of approximately 25%. That's a big royalty for an unproven area. I'd be interested to hear if that includes some assignment or override to the company or broker who initially leased the acreage.
Austin Exploration Limited (ASX:AKK) is pleased to announce that settlement of its two North American Oil and Gas Shale assets has successfully been completed, with a fully funded multi-well drill program due to commence mid next month.
Austin has acquired more than 16,000 acres that lie within two of the most prolific Oil and Gas Basins in North America. Both properties are located in close proximity to infrastructure and drilling conditions are excellent.
Approximately 11,000 acres have been acquired in Freemont County, Colorado, covering the Niobrara Shale within the Denver Julesburg (D.J) Basin. An additional 5,000 acres covering the Eagle Ford Shale have also been acquired in Burelson County, Texas.
The first well has been set to spud on Monday the 19th September 2011, US time. The Company will first drill 3 vertical wells, after which engineers will examine and review the electronic logs and the core samplesfrom the 3 wells. The best results from these wells, in terms of oil production and formation characteristics, will be re-entered and a 5,000ft horizontal "multi-stage frac" will be drilled into the Eagle Ford formation. An independent report on Austin's acreage has highlighted potential for 32 development wells with potential of 179,000 - 810,000 barrels of oil per well from the formation, with additional potential from Austin Chalk and Buda/Georgetown Limestone (see ASX announcement 7 July 2011).
E.F. SHALE "BIRCH PROSPECT" - BURLESON COUNTY, TEXAS
1. Approx 5,000 acres with a 93.5% Working Interest and a 70% Net Revenue Interest
2. Interpreted thickness of 300 feet in Eagle Ford formation
3. The Shale is mainly clay-rich limestone with low quartz content making less brittle than typical shale reservoirs (Barnett), yet with high fracturing capability.
4. Potential IP for horizontal well of > 800 BOPD.
5. At 120 acre spacing, this will allow for 32 wells to be drilled horizontally.