Eagle Ford Transaction Progress
We have recently received a number of enquiries as to progress on the monetization of the Company's Eagle Ford oil project.
In February, the Company announced that it had appointed Houston based Albrecht & Associates, Inc. and Brisbane based RBS Morgans Limited with the intention to either fully or partially monetize (lease sale, corporate trade, farm out, joint venture) the Company's Eagle Ford to achieve the optimal outcome for shareholders.
In the Chairman's March 2012 letter, there is reference to a target completion date of mid-2012.
The intention of this process is to seek an outcome which recognizes the inherent value of its Eagle Ford holdings, while balancing the operational and commodity risks associated with having a high Working Interest. At this stage a transaction involving Texon's Eagle Ford is the subject of discussions with a number of parties based in Asia, the USA and Australia. These involve varying transaction types, ranging from joint venture arrangements to corporate trades, which have to be carefully assessed and compared.
As these discussions progress Texon will provide further updates when appropriate. We appreciate your support as we advance what is a significant and important strategic move for all Texon shareholders.
Fifth Eagle Ford Well Frac Amended
The fifth Eagle Ford well, Peeler EFS 1H, fracture stimulation scheduled for 10 July 2012 was originally planned with 14 frac stages has been modified to 15 stages so that the overlying Austin Chalk would be perforated and fracced.
Prospect Generation Agreement Extension
Texon is pleased to announce that it has recently signed a five year extension and enlargement of the exploration agreement with Wandoo Energy to generate new prospects using 24,600sq/km of 3D seismic data (180 surveys), and 30,000 km of 2D seismic data in an enlarged area of 212,000 sq/km.
The focus of the extension area is primarily in the prolific oil producing East Texas Basin.
Mosman/Rockingham Olmos Oil Project
The Wheeler #1 Olmos well, as noted in an earlier release, encountered an oil productive Olmos sand that tested at an initial production rate of 220 boepd will be put to sales through newly constructed production facilities during the first week of July, 2012. The Wheeler #1 and a planned 9 July 2012 refrac of the Hoskins #1 Olmos well if commercially successful could lead to a 30 well Olmos drilling program with 3MMBOE potential.
Clifford S. Foss President of Texon Petroleum commented "The Eagle Ford monetization process continues to progress and we hope to reach a conclusion soon. Additionally, we are very happy with the Wandoo Energy exploration agreement extension and enlarged area. The new discovery Wheeler #1 well in the Mosman/Rockingham area could be a significant discovery for the Company and finally we hope the additional frac stage in the 5th Eagle Ford well will enhance its productivity and be a guide for future Eagle Ford well completions."