Target Energy to Earn 50% Interest in Buffalo Project

Source: www.gulfoilandgas.com 12/13/2010, Location: North America

US?focussed oil and gas exploration and production company, Target Energy Limited, is pleased to advise that it has entered into an agreement to earn up to a 50% working interest and operatorship of properties covering approximately 13,000 acres (the “Buffalo” Project) in South Texas, USA.

  Under the terms of the agreement Target will fully?fund the fracture stimulation (“frac”) of an existing well at the Buffalo Project to earn a 100% working interest in the relevant zone in the borehole until pay?out with  Target’s working interest to revert to 50% after pay?out.

      Target will also earn an option to frac a second well under similar terms, which in turn will earn it an option to drill and complete a new horizontal well in the project area on the same terms. 

    Following the drilling of the new well, should Target then elect to undertake more work in the project area, it will be assigned a 50% working interest in the entire leasehold. The Company will also retain options to frac any other wells in the project area owned by the existing partners. The partners in the project are private US companies.

     Target will operate the frac and drilling programs and will be assigned operatorship of the entire project at such time as it i assigned the 50% working interest in the entire leasehold.

    Target’s Managing Director, Laurence Roe, said this project offered considerable upside for the Company. “We are fundamentally testing a new resource play which appears to have considerable areal extent. Our analysis suggests that there is considerable un?tapped potential in the zone in question – both for gas and oil. 

    “Once we can confirm this with our proposed frac programs, we plan to go ahead and drill a new horizontal well to fully assess its potential. Success in the drilling will then allow us to develop a substantial ongoing campaign. 

  “Target’s entry cost for this is low risk – just the fraccing of one well and some leasing costs. All other work will be at Target’s discretion and subject to the results of the preceding programs. 

  “Importantly, as Operator, Target will have control over the timing and extent of the programs. We have already commenced the design of the first frac and are looking to engage a suitable frac crew in the next few weeks,” Mr Roe said.  


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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