Mainland Resources has deposited an aggregate total of $8.65m into escrow to be used to drill the Burkley-Phillips No 1 well to test the Haynesville shale formation on the Buena Vista Prospect in Mississippi.
The escrow funds are comprised of $7.785m contributed by Mainland’s corporate treasury and $865,000 contributed by Guggenheim Partners as its portion of drilling costs of the first well drilled on the Buena Vista prospect.
The estimated total cost to drill and complete the Burkley-Phillips No 1 well to test the Haynesville shale formation is projected to be $13.55m.
Mainland, as operator, will drill the Burkley-Phillips No 1 well using Rapad Drilling & Well Service. The total well depth is projected to be 22,000ft, or a depth sufficient to test the Haynesville shale formation, the company said.
According to Mainland, historic and proprietary data from a previous well drilled on the Buena Vista, combined with petrochemical analysis reviewed by the company, provide the basis for drilling the Burkley-Phillips No 1 well to the deeper Haynesville formation.
Mainland continues with drill site preparations for the Burkley-Phillips No 1 well, and is currently on schedule to spud the well on June 15, 2010. The permitting for the well is now complete, the company said.
The company’s working interest in the Burkley-Phillips No 1 well is 72%. It will fund 90% of the well costs to earn its 72% interest in the well. Guggenheim Partners will fund 10% of the well costs in order to earn an 8% working interest in the well. Mainland currently holds interest in excess of 17,000 acres in the Buena Vista prospect.