Nextraction Energy (Nextraction), through its operating partner Vinland Energy Operating, has received permit approval to drill the Mountain Minerals #5 well located near the Tennessee/Kentucky border.

The well is permitted to a depth of 762mt and will be drilled to test an unconventional Chattanooga (Devonian) shale target in the oil and gas producing region of the Appalachian basin. Drilling will also target several known conventional zones including the Big Lime, Knifely and Warsaw formations.

The well is the second location approved to be drilled by Nextraction and its partners in the fractured region of the southern Appalachian basin. Upon evaluation of prospective target zones a completion program will be designed for the well. The estimated costs are $162,000 to drill and set casing, and $120,000 to complete a two stage fracture in the shale.

The Mountain Minerals #5 well has been chosen as the first obligation well in the project because of its potential to encounter multi-pay horizons, and its proximity to existing pipeline and compressor infrastructure. The well is within 152mt of an existing compressor, which will allow Nextraction to tie into the pipeline and sell gas immediately to generate revenue.

The well is within approximately 350mt of, and on trend with, the Giles #2 well that was completed in 1993 with an initial flow rate of 5.228 million cubic feet of gas per day. The Giles #2 well produces from the big lime formation at 595mt deep.

Nextraction is one of several operators targeting the development of the Chattanooga shale in the Appalachian basin. Other operators in the area include CNX Gas and Atlas Energy. Nextraction plans to drill four proof of concept wells that could lead to the development of up to 500 wells on the existing leasehold.

Nextraction and Vinland Energy Eastern have entered into a farm-out and joint venture agreement to explore over 70,130 acres in the Appalachian basin, between and on trend with recent Chattanooga shale producing areas located both northeast and south-southwest of the Nextraction/Vinland acreage.