Our growth efforts are focused primarily on finding and developing natural gas reserves in known tight gas sands and shale areas onshore in the United States and British Columbia. Since May 2006, we have acquired leasehold interests covering 10,300 gross (4,850 net) acres in East Texas, 90,300 gross (81,000 net) acres in Northern New Mexico, 74,000 gross (44,400 net) acres in Western Kentucky and 28,860 gross (6,865 net) acres in British Columbia.
In total, we have assembled leasehold interests of 278,556 gross (194,637 net) acres in our five operating areas - West Texas (Wolfcamp, Canyon Sands and Ellenburger), East Texas (Cotton Valley Sands, Bossier Sand, Bossier Shale and Cotton Valley Lime), Northern New Mexico (Mancos Shale), Western Kentucky (New Albany Shale) and British Columbia (Montney tight gas and Doig Shale).
Summary Total
- 193.7 Bcfe of proved reserves
- 44% developed, 85% natural gas
- 23.5 MMcfe/d production for 3Q 2008 (through 8/31/2008)
- 20+ year reserve life index
- 278,556 (gross) acres/194,637 (net) acres
- 950 identified drilling locations
- 330 producing wells at June 30, 2008
North Bald Prairie prospect
In July 2007, we entered into a joint drilling venture with EnCana Oil & Gas (USA) Inc. in the East Texas Cotton Valley/Bossier trend. As part of the joint venture, we agreed to drill up to five wells at our cost to earn a 50% working interest in approximately 13,600 gross (4,850 net) acres. We believe significant potential exists for producing from multiple zones in the prospect area. Our primary targets are the Cotton Valley Sands, Bossier Sand, Bossier Shale and Cotton Valley Lime, all unconventional tight gas formations where we believe we can apply our technical and operational expertise to successfully recover natural gas.
Cinco Terry project
Since late 2005, we have leased and acquired options to lease 31,380 gross (14,406 net) acres two miles northwest of the Ozona Northeast field to evaluate the Wolfcamp, Canyon and Ellenburger formations. As of June 30, 2008, we had drilled and completed 14 Ellenburger wells and 16 Canyon or Canyon/Ellenburger wells.
Ozona Northeast field
The Ozona Northeast field, in Crockett and Schleicher counties, Texas, is our largest operating area on the basis of proved reserves and production. The Canyon Sands of the Val Verde Basin in West Texas are located in a prolific tight gas reservoir with more than 11,800 total productive wells and cumulative historical production of more than 3.8 Tcfe over more than 50 years.
On July 1, 2008, we acquired the remaining 95% working interest in the deeper Strawn and Ellenburger formations. We now own substantially all working interests in all levels of the subsurface in our Ozona Northeast field. We also own 140 miles of gathering system and related compression facilities.
El Vado East prospect
Our El Vado East prospect is a Mancos Shale play located in the Chama Basin in Northern New Mexico in close proximity to several highly productive fields, including the West and East Puerto Chiquito fields and the Boulder field, which collectively have produced in excess of 29 MMBoe of oil.
Boomerang prospect
Our Boomerang prospect is a New Albany Shale play located in Western Kentucky in an under-explored area of the Illinois Basin. We believe the attributes of the New Albany Shale in the Boomerang prospect make it a promising resource play, particularly with the introduction of horizontal drilling technology.
British Columbia prospect
In August 2007, we acquired a 25% non-operating, working interest in a lease acquisition and drilling project targeting unconventional gas reserves in the emerging Triassic Shale and tight gas sands play in Northeast British Columbia. Our operating partner began drilling operations in the project in August 2007.
