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Location
Wilkinson County, bordering Louisiana to the south
and immediately adjacent to the Mississippi
River to the west. Palmetto Point is approximately
150 miles southwest of Jackson, Mississippi and approximately
50 miles north/northwest of Baton Rouge, Louisiana.
Project
Details
Lexaria has a 32%
working interest in a 12-well program located
at Palmetto Point, Mississippi. The prospect
wells are targeting 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 low 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.
Our important Belmont Lake oil discovery is
located within this Palmetto Point area.
Drilling
of the original ten wells commenced in May
2006 (2 other previously drilled wells were
subsequently added to our interest) and all those 12 wells have now
been drilled. In total, 10 wells encountered some natural gas
and 3 of those wells also encountered some
oil.

In addition, Lexaria participated in the
first Belmont Lake development well (the PPF-12-3)
in 2007, where we made the original discovery
late in 2006 (the PPF-12). Lexaria owns a 32%
working interest in the development drilling on this lease. Both these
wells are currently producing oil. The complete development of the
Belmont Lake oil field could involve anywhere from four to twelve wells
and will represent a major accomplishment for the future plans of Lexaria
Corp.
Lexaria has a 45%-50% working interest in another
12 wells in Mississippi that were drilled between
September 2006 and November 2007. These 12 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 acre 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. Although several of the wells had geological success, only natural
gas was found and these wells are not economic with natural gas prices
under $4 per thousand.
Lexaria has a 60% working interest in the balance
of the Mississippi AMI. As of May 2009 there
are 38 wells remaining to be drilled. With
depressed natural gas prices there has been
less incentive to drill shallow gas wells.
Our exploration focus has centered on the idea
of attempting to concentrate on the discovery of additional Frio Oil
discoveries that might resemble our earlier Belmont Lake discovery.
If successful we believe we can add significant shareholder value since
there are a number of historic oil fields in our general area each
in excess of 500,000 barrels or more, and in some cases significantly
more.
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. |