Lexaria has a commitment to investors to find economically viable projects strategically located in proven oil and natural gas producing areas of North America.
The locations benefit from an extensive pipeline network, top-class infrastructure and a large pool of industry proven resources. The prospects are particularly attractive. These highly competitive areas offer multi-zone potential for both exploration and development opportunities.

We have entered into a strategic relationship with privately held Griffin & Griffin Exploration, L.L.C. (“Griffin”), of Jackson, Mississippi wherein they are our operator and provide extensive experience and knowledge. We have participated in several agreements with Griffin since 2005.

Our current production is virtually 100% oil with little or no natural gas.

We currently hold interests of between 42% and 50% in several producing oil wells in the Belmont Lake oil field; various interests in mostly shut-in gas wells; and a 60% interest in over 30 exploration wells to be drilled on Griffin’s extensive land base covering over 130,000 acres east of the Mississippi River in south-western Mississippi.

We selected Griffin as our strategic partner based on their over-40 years of experience in this area, and their knowledge gathered through their drilling, owning or operating over 100 wells in the area over the last 15 years. The Griffin family has lived in the Jackson, MS area for many years and has built solid personal and business relationships during that time. Griffin holds lands or options on lands of substantially more than 130,000 gross acres in the region, making it one of the largest independent producer/explorers in Mississippi. There are currently over 100 identified drill locations and more than 220 square miles of 3-D seismic has been attained.

Why Mississippi?

We have made this region a key focus of our company for several reasons.

First, superior economics drive our exploration and development plans. Drilling costs for shallow holes are inexpensive and completion times are quick. Reliable and extensive infrastructure exists, including pipeline gathering systems. Success rates, particularly of the Frio wells, are high. And this location, close to Henry Hub in Louisiana, ensures maximum natural gas revenue rates. Our operations are far enough removed from the coast of the Gulf of Mexico to prevent most potential hurricane-induced disruptions.

Main targets

Our main target in 2012 is the shallow Frio formation; one of three main geological zones in southwest Mississippi and in Louisiana.

Frio   Characterized by shallow depths of up to about 4,000 feet; these are relatively inexpensive wells (currently about $650,000 each) that are generally quick to drill and complete. The use of "Bright Spot" technology has yielded a geologic success rate of about 80% for Frio natural gas exploration. Economic success will necessarily be lower, depending on many variables.

Lexaria and its experts are trying to unlock the riddle of how to use Bright Spot technology in the identification of oil targets, instead of gas targets.

The term "Bright Spot" is used to describe a geophysical amplitude anomaly which is simply a velocity change from high to low. Sands that contain gas are predicted by this method because the gas provides a slower velocity response giving an abnormally intense trough-peak reflection, therefore termed a "Bright Spot."

The Frio in the area of Southwest Mississippi and North-Central Louisiana is a very complex series of sand representing marine transgressions and regression and therefore the presence of varying depositional environments. Structurally, the Frio gas accumulations are a function of local structure and/or structural nose formed as a result of differential compaction features. However, stratigraphic termination (i.e. up dip shales out of sands) also plays a role in most Frio accumulations. The stratigraphy is so complex that seismic HCL evaluations are the only viable exploratory tool for the Frio prospect.

Griffin has utilized seismic "bright spot" technology, providing a tool to identify gas reservoirs and to delineate the reservoir geometry and limits. Taking advantage of these critical factors has improved reserve estimates and the geologic success ratio that has made the Frio an economical and predictable reservoir.

Wilcox   Normally found at up to about 9,000 feet, but still enjoying relatively fast and easy drilling, these wells generally cost less than $1 million to drill and complete. Normal Wilcox criteria include the presence of a regional structural nosing overlain by a bar sand which terminates to the north either by shaling-out or loss of porosity and permeability, thereby providing the trapping mechanism for hydrocarbon accumulation. We are not planning to drill any Wilcox targets in the immediate future.

Tuscaloosa   We are interested in the Tuscaloosa geological zone and could pursue this type of target either in Mississippi or in Louisiana. These are deeper wells, generally between 12,000 and 14,000 feet that are nevertheless rarely overpressurized and thus not often technically challenging to complete. The objective Lower Tuscaloosa "A" Sand was deposited on a broad carbonate platform (Lower Cetaceous Shelf). This Sand is generally deposited in a fluvial-deltaic depositional environment with numerous reservoir studies conclusively identifying the sand systems as predominately point-bar sands positioned on regional monoclinal dip. Since these point-bar sands are "enclosed" sand bodies encased in shale, the necessary parameters for a stratigraphic trapping style are available.

All known productive Lower Tuscaloosa reservoirs in southwest Mississippi and north central Louisiana have displayed these types of trapping characteristics. High-resolution stratigraphic seismic data can enable geological success rates of up to about 65%. Drilling and completion costs are typically over $3 million for each Tuscaloosa well, with up to a 20-year well life possible.

Select a project from the list at left for details.