The evaluation carried out by MHA assumed a 100% working interest in the project area and utilized high, most likely, and low scenarios to estimate OGIP. Combining the high case scenario OGIP of 22.846BCF per 640 acres with the total Nextraction holdings of 70,130 acres gives an estimated gas in place for this prospect of 2.5 TCF.
Traditional natural gas production in this region produces from formations overlying the Devonian shale which were not considered in the MHA study, but will add to the production potential of the acreage, the company said.
Nextraction’s next actions will include completing the vertically drilled Mountain Minerals #5 well in the Devonian shale and three overlying formations to test initial flow rates for the well. Then the company plans to continue its drilling program that includes completing three additional wells in 2010 and 25 wells by the end of 2011.
Nextraction currently holds a 95% interest in the first 30 wells drilled in the Appalachian Basin project area, and its joint venture partners will have the option to participate as 25%-35% interest owners after the wells reach payout of invested capital. Thereafter, the company will own 47.5% of the undeveloped leasehold.
