Conway Resources Inc CWNYF

Barnett Shale...

[wildkyd]

The Barnett Shale is looking to be an exciting play. Following is a comment on the play... From EECI Property description: Parker County, Texas: This 3,000-acre lease is located approximately 30 miles west of Fort Worth and has six key wells that are currently producing gas from various sand and conglomerate formations on the lease. Empire has a 50% working interest. Development plans for the lease include an exploration program to determine if production is possible from the popular Barnett Shale underlying the area which has recently been discovered to be economical in the area. Drilling will commence upon completion of engineering evaluation and rig availability. Comments by George Mitchell, President of Mitchell Energy and Development Corp, 9 May 2001 Let me take just a few minutes to explain the basics of the Barnett shale drilling program that give us such optimism about our projected 25 percent gas production growth in 2001 and 20 percent annualized growth through 2003. First, the Barnett shale formation lies under 10 counties in North Texas where we produced 194 million cubic feet of gas per day in the first quarter this year and have developed only one-third of our 230,000 acres of leases. Within the Barnett area, we have drilled over 600 wells to-date on 55-acre well spacing and have what we reasonably expect are another 2,000 wells to drill. This alone gives us a 7-year backlog of future drill sites at the current drilling pace of 276 wells per year. But our opportunities don't stop here. Based on sophisticated scientific tests performed on Barnett core samples, only 8 percent of the estimated gas reserves in place are being recovered from our current 55-acre spacing. To increase reservoir recoveries to the 20 to 25 percent range that reasonably can be expected from tight gas formations, we are currently experimenting with a reduced well spacing pattern of 27 acres in 6 pilot tests. If the 12 to 18 months of production history that it takes to fully analyze well performance on tighter spacing proves out, then we easily have an additional 2,500 wells to drill. Another method we are using to significantly increase per well reserves and production is the application of a second frac on existing wells after they have produced about 3 years. In the 80 plus refracs and reworks performed to date, we have experienced an average 8 fold increase in the wells' production and have added 500 million cubic feet of incremental gas reserves per well at about one-third the cost of a new well. While we have only been able to perform one subsequent refrac due to the time interval needed between fracture treatments, the potential exists for multiple refrac opportunities for each well.