"The Jurassic Cotton Valley group on the west flank of the East Texas basin generally consists of a succession of about 1,000 ft of terrestrial and marine sands and shales, 800 ft of dark (Bossier) shale, and 300 to 500 ft of limestone at the bottom known as the Cotton Valley Lime or Haynesville. The group covers more than 250,000 sq miles in the East Texas basin and adjacent parts of Louisiana and southeast Arkansas. The Cotton Valley Lime in the Fallon and North Personville area has been a known gas area since its discovery in 1969. However, its poor permeability pay at a depth of about 11,000 ft had produced at rates too low for commercial development under the price schedules and technology of the past decade. Due to fracture porosity, beginning rates were moderately good (1 to 4 MMcf/D), but the natural fracture system was not sufficient to maintain the high rates of flow; consequently, the rates dropped to 0.200 to 0.500 MMcf/D in less than 2 years. Lately, advances in stimulation technology and improved economic incentives renewed interest in this area. Conventional acid stimulations and small fracturing jobs brought some improvement. Bigger fracturing jobs brought further improvement, but MHF appears worthwhile"
"Australia-listed Texon Petroleum has acquired a 50% stake in a Cotton Valley Lime prospect in eastern Texas.
The Roundhouse prospect, comprising 28.48 gross square kilometres of Cotton Valley Lime reservoir potential in the Navarro County, will continue to be operated by private US company, Tanos Energy Holding. Tanos will also retain a 50% working interest in the project.
Tanos, which has retained a 50% working interest, planned to drill an initial horizontal test well on the Roundhouse prospect during the first quarter of 2013.
Texon believed the prospect had an overall potential of 10 million to 12 million barrels of oil equivalent, estimating that 200,000 to 300,000 barrels could be recovered from each well.
The Cotton Valley Lime play in east Texas is a naturally occurring fracture oil reservoir in the early stages of development as a new horizontal drilling play.
The reservoir had been drilled previously and produced through natural fractures in the adjacent Cheneyboro field through non-stimulated vertical wells.
Texon said the Cheneyboro field had yielded more than three million barrels of oil to date."
TXN Price at posting:
37.5¢ Sentiment: Hold Disclosure: Held
