LYNDEN ENERGY CORP. V.LVL

mitchell ranch farm out

[zadman]

Didn't chk have to make a decision by year end whether to extend or terminate their agreement with lvl? If so, we should hear something very soon no?? Zad

[Barnett_Vet]

The farm out agreement was effective sometime in July 2011 and had a 30 month term, and could be extended through continuous development.  To my knowledge CHK hasn't filed any permits recently on the farm out land and they have pretty much abandoned their holdings in the Midland Basin.  So it has either already expired or it will expire sometime this month if they don't drill

[Pandora]

So that doesn't speak highly of the land?

[Barnett_Vet]

Not necessarily. As I understand it, everything CHK leased in the northern and eastern Midland Basin was a play on the Miss Lime formation, which didn’t work out for them or really anyone else. The recent drilling offsetting the Mitchell Ranch by Devon et al has been in the Cline formation. CHK was in the red so they got a new CEO and refocused on plays that were working.  

[Pandora]

Thanks Barnett_Vet for the synopsis.