Jan. 18, 2011 (GlobeNewswire) --
DALLAS, Jan. 18, 2011 (GLOBE NEWSWIRE) -- Saxon Oil Company Ltd. ("Saxon") (Pink Sheets:SXNOF) (TSX-V:SXN) (Frankfurt:OVG) (Berlin:OVG) announced today it has signed an agreement to participate in a gas sand development project in Live Oak County, Texas. Saxon will participate in this play with three other companies. Each party will participate with a 25% working interest. Saxon will not be the operator of the project but will have direct input into the implementation of the project.
The original plan includes a 1,280 acre lease position, but the agreement also defines a 40,000 plus acre area of mutual interest (AMI). This known gas sand has the potential to develop into a resource-type play due to the known areal extent and geological continuity of the formation. The first part of the development will involve re-entering an existing wellbore and stimulating the sand of interest. Subsequent work will include drilling a horizontal well and looking at multi-stage stimulation technology.
Ted Wooten (President) has pointed out that "we are all keying off of wells that have produced in excess of 1 BCF of gas from vertical wellbores in this formation. Due to low drilling costs in this area, and the potential for doubling and even tripling the recovery factors utilizing horizontal well drilling and stimulation technology, we anticipate developing significant gas reserves at a total finding cost of approximately $1 - $1.5 / MCF. This initial project commitment, and the access to additional acreage, makes this a play that could keep Saxon and the other companies busy adding gas reserves for several years."