Doxa Energy Ltd. (Doxa or the Company) is pleased to report encouraging early production test results from its activities in the Mississippian Lime Play in northern Oklahoma. As previously disclosed, Doxa owns 20% undivided interest in approximately 18,000 acres (3,600 net acres) within the Mississippian Lime Play, primarily located in Alfalfa, Garfield, Grant and Kay Counties, Oklahoma. As of this date, the Company reports that it has participated in a total of eight horizontal wells that have been successfully drilled and completed, all of which are targeting the Mississippian Lime formation. Of the eight wells, six have been producing for at least thirty days and have achieved an average thirty day peak rate of 175 barrels of oil per day (BOPD) and 784 MCF of natural gas per day (MCFPD), or 306 barrels of oil equivalent per day (BOEPD) per well. These results compare favorably with the current "type" well thirty day peak rate average of 275 BOEPD reported by SandRidge Exploration and Production, LLC ("SandRidge"). One of the eight wells mentioned above was completed recently and commenced producing, but as of this news release has not been on-line for thirty days, and the other is shut-in temporarily pending pipeline and other operations.
In addition to the foregoing, the Company is actively participating in three horizontal Mississippian wells currently being drilled or completed, and plans to participate in 8-10 additional wells by the end of 2012. The Company could potentially participate in as many as 300-400 horizontal wells during the life of the Play (assuming spacing of 3-4 wells per 640 acre drilling unit). All of the wells Doxa has participated in to date are located in Alfalfa, Grant and Kay Counties, Oklahoma, and are within the area management believes to be the core area of the Play. Each of the active wells is managed by a designated operating partner, being SandRidge, Chesapeake Operating, Inc., Eagle Energy Production, LLC, Panther Energy Company, LLC, Cisco Operating, LLC, or PetroQuest Energy LLC. The Company's participation in each of these wells average 3-4% working interest with each well costing an average of US$3.6mil gross.
Finally, in keeping with management's decision to intensify its efforts and resources on the continuing development of its interests in the emerging Mississippian Lime Play, the Company has closed on the sale of its 20% leasehold interest under the undeveloped portion of the Peeler Ranch project, along with its 13% interest under the Pfluger project, both part of the Eagle Ford Shale Play in Atascosa County, Texas. Collectively, the divestiture included Doxa's interest under 2,565 gross acres (465 net acres), and resulted in sales proceeds net to the Company of approximately $644,000. Cost associated with the divested interests totaled $403,030, net to the Company. Doxa has retained its existing interests under various other Eagle Ford Shale leases and wells, including the Peeler Ranch No. 1H and 2H in Atascosa County, Texas, and the Epley No. 1H well in adjacent McMullen County. Company management believes the prospective economics from continued participation in the Mississippian Lime Play are more attractive than those associated with its Eagle Ford Shale Play holdings.
John D. Harvison, President and CEO, commented today that:
"We are excited that our early results continue to confirm our belief that Doxa's acreage is favorably positioned within the defined core area of the Mississippian Lime Play, and that this Play represents years of potential growth for Doxa in what is considered by some to be one of the most attractive onshore plays in the United States."