Nextraction Receives Permit to Drill in Tennessee; Operations to Commence ImmediatelyMarch 2, 2010
Vancouver, BC - Nextraction Energy Corporation (TSX-V: NE) (the "Company") announced that its wholly-owned subsidiary, Nextraction Energy (US) Inc. ("Nextraction"), through its operating partner, Vinland Energy Operating, LLC has received permit approval to drill the Mountain Minerals #5 well located near the Tennessee/Kentucky border. The well is permitted to a depth of 762 meters (2500 feet) and will be drilled to test an unconventional Chattanooga (Devonian) Shale target in the well-known oil and gas producing region of the Appalachian Basin. Drilling will also target several known conventional zones including the Big Lime, Knifely and Warsaw formations. The rig is moving on location with plans to commence drilling early next week.
The well is the second location approved to be drilled by Nextraction and its partners in the highly fractured region of the southern Appalachian Basin. Upon evaluation of prospective target zones a completion program will be designed for the well. Estimated costs are $162,000 USD to drill and set casing, and $120,000 to complete a two stage frac in the shale.
The Mountain Minerals #5 well has been chosen as the first obligation well in the project because of its potential to encounter multi-pay horizons, and its proximity to existing pipeline and compressor infrastructure. The well is within 152 meters (500 feet) of an existing compressor, which will allow Nextraction to tie into the pipeline and sell gas immediately to generate revenue. Natural gas from the southern Appalachian Basin is sold on the NYMEX market, which renders the highest commodity prices in North America. The well is within approximately 350 meters (1148 feet) of, and on trend with, the Giles #2 well that was completed in 1993 with an initial flow rate of 5.228 million cubic feet of gas per day. The Giles #2 well produces from the Big Lime formation at 595 meters (1952 feet) deep.
Nextraction is one of several operators targeting the development of the Chattanooga Shale in the Appalachian Basin. Other operators in the area include CNX Gas Corporation (CGX) and Atlas Energy (ATLS). Nextraction Energy plans to drill four Proof of Concept wells that, if successful, could lead to the development of up to 500 wells on the existing leasehold.
Nextraction and Vinland Energy Eastern, LLC, a private company from London, Kentucky, USA, have entered into a farm-out and joint venture agreement to explore over 70,130 acres in the Appalachian Basin, between and on trend with recent Chattanooga Shale producing areas located both northeast and south-southwest of the Nextraction/Vinland acreage.
Vinland Energy Operating, LLC is the acting Contract Operator for the project. The Project Area is located in the Devonian shale trend which stretches from New York to Tennessee. The Devonian age shale group includes the Marcellus Shale (New York and Pennsylvania, West Virginia), and continues into the Kentucky and Tennessee border region where it is known as the Chattanooga Shale.
About Nextraction Energy Corp.
Nextraction Energy Corp. is a Canadian junior oil and gas company engaged in the exploration and development of conventional and unconventional oil and gas resources. Nextraction targets projects with known reserves that provide lower risk, high return development opportunities in unconventional resource projects. The Company is headquartered in Vancouver, BC, Canada, and is currently developing a tight-sands gas play on the Pinedale Anticline in the Green River Basin region of western Wyoming, and a large Chattanooga shale gas resource play in Eastern Kentucky.
On behalf of the Board of Nextraction Energy Corp.
"Mark S. Dolar"
President and CEO
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For further information on behalf of Nextraction Energy Corp, please contact:
Karmen Jade Birss
Manager, Corporate Development
Nextraction Energy Corp.
Toll Free: 1-888-630-0370