Mainland Resources, Inc. and American Exploration Corp. Enter Into Letter Agreement to Jointly Develop Mississippi Acreage
HOUSTON, Sept. 17 /PRNewswire-FirstCall/ — Mainland Resources, Inc., (OTC Bulletin Board: MNLU; 5MN-Frankfurt) a Nevada Corporation (the “Company”) and American Exploration Corp. (“American”), (OTC Bulletin Board: AEXP; EQO-Frankfurt) have entered into a Letter Agreement to jointly develop their contiguous acreage in Mississippi.
Mainland Resources will commit approximately 8500 net acres and American Exploration will commit approximately 5000 net acres to the project. This represents a total of 13,500 net acres to the composite project area.
Mainland Resources will be the Operator of the project area and has committed to pay 80% of the initial well (drilling and completion costs) to earn a 51% working interest in the well and total project area. American has agreed to pay 20% of the initial well (drilling and completion costs) to earn a 49% working interest in the well and total project area. Future costs (ie. drilling, completions etc.) for oil and gas activities of the 13,500 net acre project area will be split on a 51%/49% basis between Mainland and American respectively.
American recently announced it has received a shale gas analysis completed by Schlumberger evaluating the total gas in place within the Haynesville Formation (Shale) on their 5000 net acres held in the project area. From existing well data, the assessment confirms similar reservoir attributes to those of the Haynesville Shale of northwestern Louisiana and demonstrates estimated gas in place of at least 300 Bcf/section. This places more than 2 TCF of estimated gas covering just the 5000 acres of American Exploration lands and does not include the potential gas in place amount for the additional 8500 net acres that Mainland is contributing to the project area.
A single deep well was drilled in the 1980s on this prospect at a time when neither the technology for developing nor the understanding of shale gas reservoirs existed. The well penetrated a greatly over-thickened Haynesville shale reservoir that was completely gas charged and over pressured. The Haynesville shale on the acreage is more than eight (8) times the thickness of that found in northwestern Louisiana.
The gas in place assessment by Schlumberger was performed having first conducted mineralogical and geochemical analyses on rock cuttings samples from the well, which penetrated the Haynesville Formation. These results were then integrated with the petrophysical log data from which the gas volumes were determined.
The 13,500-acre project area has been completely remapped with reprocessed seismic data. The results confirm the acreage is prospective for the Haynesville shale.
Mainland has experienced previous success in the Haynesville shale through its participation in the drilling and completion of two producing wells in DeSoto parish, Louisiana. Mainland expects to complete a third well in DeSoto parish in the fourth quarter of 2009 or the first quarter of 2010.
Company President Mike Newport states, “We are very fortunate and excited to participate in this project area with American Exploration with such a large acreage position. The Haynesville Shale is the top gas play in North America and we feel this is one of the best new shale prospects in the region. This project could add tremendous value to our company.”
About Mainland Resources, Inc.
Mainland Resources is a junior company engaged in the exploration and development of oil and gas resources. The Company’s current initiatives are focused on the acquisition and development of leases in emerging gas regions with the potential for discoveries including the Haynesville shale.
See: www.mainlandresources.com for more information.
Symbol: MNLU - OTCBB, Symbol: 5MN; Frankfurt, WKN No.: A0ND6N Contact: Investor Relations (USA) Tel. 281-469-5990 Investor Relations (Europe) Tel. +49-69-7593-8408
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SOURCE Mainland Resources, Inc.