another update from e blastSaxon Oil Completes First Hudson Hills Well
DALLAS, TEXAS -- Saxon Oil Company Ltd. (TSX-V: SXN) is actively engaged in several oil and natural gas projects and prospects. Most notable is the Hudson Hills prospect in Central Texas. In early October Saxon completed its first well in the prospect. The well is averaging 30 bbls of oil per day during its first few weeks of production. In addition, Saxon, which holds a 75% working interest in the prospect, has drilled two wells adjacent to the first well that should be on production shortly. Saxon has leased approximately 2,000 acres in this area and will continue development of this prospect.
Saxon used a new completion technique called Radial Jet Drilling at Hudson Hills. This technology cuts one-inch holes approximately 300 feet horizontally into the prospective producing formation, creating a larger drainage area for the flow of oil and gas. This new technique has the potential to increase a well's ability to drain the surrounding reservoir. We will continue to experiment with this technology on other wells in the area.
Success at Hudson Hills was part of the impetus behind Saxon's recent acquisition of the 1,000 acre Heatherwood prospect neighboring Hudson Hills. Saxon anticipates drilling its first Heatherwood well before the end of the year and a second well shortly thereafter. Saxon currently holds a 100% working interest in this prospect.
The primary zone of interest in both the Heatherwood and Hudson Hills prospects is the Upper Cretaceous Navarro sandstone formation, a shallow oil-bearing sand ranging in depth from 2,800 to 4,000 ft. Saxon plans to leverage its experience in and understanding of the geographical area and geological formation, together with the operational techniques being implemented and refined on the Hudson Hills prospect, to lower operating costs and maximize ultimate recovery of reserves in Heatherwood.
In Washita County, Oklahoma, we are in the final stages of completing the Seger Indian Well #2-22 on the Cobb Creek prospect. The completion has been delayed while we wait on a compressor to be delivered to the well site. At this time, we do not think the well will be as strong as we originally anticipated. We believe the well has suffered some near-wellbore damage that is impeding flow. We are exploring other options with the well, but deem the well commercially viable enough to go ahead and complete now. Further, by completing the well we will retain our lease on the Cobb Creek prospect, which consists of 1,973 acres.
Saxon has committed to participate in two West Texas wildcat wells to be drilled in later this year. These wells will be drilled to the Ellenberger formation, known as a high-reserve formation when hydrocarbons are present.
Saxon owns a 10% interest in Preset Drilling Company, a shallow niche driller. Preset has three rigs running in Oklahoma and the Texas Panhandle. The newest rig is contracted to a major oil company for the next two years, on a day-rate basis.
In other company news, Saxon's Board of Directors appointed William Payne to the Board, replacing Larry Van Hatten, who resigned due to a conflict of interest with a new business affiliation. We want to thank Larry for his past contributions to the company as a member of its Board of Directors and Audit Committee. He will remain a consultant to the company. Mr. Tom Davis, a current Saxon board member, will head Saxon's Audit Committee.
Over the past few months Saxon has been in serious discussions with several companies about jointly developing acreage in the Barnett Shale. After a thorough due diligence, we have opted not to pursue these opportunities at this time. The high costs for leases, drilling rigs, and other equipment and services, coupled with the reduced selling price for natural gas, does not make the Barnett Shale as an attractive opportunity as it was a year ago. We continue to review prospects in many other areas, particularly in Central Texas where we believe there are number of shallow oil plays, similar to Hudson Hills and Heatherwood, which better fit our risk profile and growth strategy. In short, Saxon Oil remains firmly committed to finding and developing proper prospects that maximizes shareholder returns.
Saxon Oil Company is an independent energy company engaged in the acquisition, development and production of oil and natural gas reserves. Saxon is headquartered in Dallas, Tex., with operations in Texas, Oklahoma, Louisiana, and North Dakota.
This news release contains certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding plans for completion, production potential, other targeted areas and expansion and development plans and objectives of Saxon Oil Company Ltd. are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
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