Palo Pinto
Palo Pinto County
The area in which the Company has acquired its working interest covers approximately 1,279 acres and affords easy access and contains no adverse environmental conditions. The wells and transmission line are located in the eastern portion of Palo Pinto County, Texas approximately 80 kilometres north west of the city of Fort Worth.
The Palo Pinto project lies along the western part of the Fort Worth Basin, a prolific oil and gas producing region of east/centre Texas. It is characterised by natural gas and minor oil accumulations in stratigraphic and structural traps associated predominantly with early Pennsylvanian quartz sandstones and conglomerate reservoirs.
Palo Pinto County - Lone Camp Project
In February of 2006, Advance Energy Limited acquired a 71.5% average Working Interest (53.625% average NRI) in nine producing gas wells, one salt water disposal well and a 90.0% interest in a five mile natural gas transmission line. The 1,280 acre project is located in the eastern portion of Palo Pinto County, Texas approximately 50 miles west of Fort Worth, Texas.
To date, five workovers have been executed that have increased the production fourfold form the time of acquisition.
The development plan scheduled for 2008 includes drilling two developmental wells and performing two workovers. The development wells were originally scheduled to be drilled in June of 2007 but were delayed due to poor weather, and a pending Barnett Shale joint venture opportunity.
Palo Pinto County - Possum Kingdom Project
In December 2006 Advance Energy Limited purchased an average working interest of 90% in the nine well, 1,015 acre Possum Kingdom project located in Palo Pinto County.
In the 3rd quarter of 2007, three major workovers were performed to increase production on these assets and several routine maintenance items were performed in order to stabilize production.
Currently these assets are being reviewed for a secondary development program planned for the 2nd quarter of 2008. This development plan will include the drilling of at least one development well, two behind pipe workovers and three mechanical procedures.
Palo Pinto County - Barnett Shale History and Overview
As a part of the Palo Pinto County acquisitions, Advance has gained rights to the Barnett Shale Field. The Barnett Shale is geological formation with excellent economic possibilities and is estimated to stretch from the city of Dallas west, covering at least 17 counties.
Some experts have suggested the Barnett Shale may be the largest onshore natural gas field in the United States. The United States Geological Service predicts that in excess of 26.8 trillion cubic feet of gas will be produced from this field. Oil has also been found in lesser quantities, but sufficient (with recent high oil prices) to be commercially viable.
Adjacent to the Company's Lone Camp Project, EOG Resources had completed its third horizontal Barnett Shale well. Advance Energy Limited, in conjunction with EOG participated in a seismic shoot across its acreage and was able to view the seismic in the 2nd quarter of 2007. The seismic proved up viable locations in which to drill the Barnett shale on this project. The Company continues to negotiate a farmout agreement with EOG and plan on either co-developing the Barnett with EOG or drilling the wells solo in 2008.
