Mississippi:
Alberta:
Oklahoma
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Lexaria has a 30% working interest in a 12-well program located at Palmetto Point, Mississippi. The prospect wells are located in the Frio Geological formation. Frio wells typically enjoy low finding costs and have a high degree of success. The natural gas and oil targets occur at shallower depths, and have minimal completion costs. Palmetto Point is a 50-square mile (32,000 acres) 3-D seismic area that has generated a prolific number of shallow Frio targets. At this time many valid drilling targets remain. Drilling of the first of ten wells (the "PP F-40") commenced in May 2006 (2 other previously drilled wells were subsequently added to our interest) and all 12 wells have now been drilled. 2 wells were plugged and abandoned and 7 are currently producing. 10 wells encountered natural gas and 3 of those same wells also encountered some oil. The well depths and pay zone depths of each of the successful wells are set out below:
In addition, Lexaria expects to commence development drilling around the PP F-12 well sometime in 2007, where we made an oil discovery late in 2006. Lexaria owns a 30% working interest in the development drilling on this 160-acre lease.
Lexaria has a 45% working interest in a 7-well program in Mississippi that was drilled between September 2006 and May 2007. These 7 wells were not located in Palmetto Point, but were located on other lands that together form part of the 50-well Area of Mutual Interest (AMI) wherein Lexaria and the other participants have an exclusive option from the top of the Frio formation to the bottom of the Wilcox formation, over a roughly 200,000 acrea area. Although Palmetto Point is within the 200,000 acre AMI, seasonal flooding during the Winter/Spring of 2006/07 made it difficult to begin new drilling operations in that location at that time. The results of the 7-well program are shown here:
Lexaria has a 50% working interest in the balance of the Mississippi AMI. As of June 30 2007 there were 43 wells remaining to be drilled, into which drilling operations began again in August 2007. It is not certain how many wells will be drilled during 2007, but it is likely that initial drilling will again focus on the Palmetto Point area, where both natural gas and oil discoveries were made in our earlier drilling programs. The Prospect Drilling operations are being conducted by Griffin & Griffin Exploration in its capacity as Operator. This consists of the drilling, logging, testing, completing and equipping for production (or if applicable, the plugging and abandonment) of the wells. Griffin anticipates drilling to a subsurface depth equal to such depth as is necessary to penetrate the sands of the Frio Formation identified as potentially productive of oil and/or gas. Griffin has drilled, owned or operated more than 100 Frio wells in the region. 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. View FF-36 well log results chart View surface scan of FF-36 well showing "bright spot" technology 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 outs 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. |
