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lowman

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lowman

Re: None

Thursday, 01/18/2007 4:45:42 PM

Thursday, January 18, 2007 4:45:42 PM

Post# of 51429
Email to/from Keith:


G'morning Keith,

Nice PR today! Wanted to ask if you could elaborate on this lease in whatever way you might feel comfortable?

Thanx,

L~



Lowman, this Sabine lease is one of my favorite stories on how we found it. We acquired the initial information in 2000? 2001? Back in the early 1970’s a wildcatter drilling for oil hit some very large gas wells out in the Sabine National Forest, the National Forests are heavily regulated by the U.S. BLM. Back then the old wildcatter decided 25 cent natural gas and miles of paper work and gas lines wasn’t worth the effort.

Anyhow we looked over the results and locations and really had no interest in this because of the location, pipeline issues, government regulation and the costs of drilling one of these wells was $1,000,000+, plus Sabine County has never had very much in historic production. It really was the end of the earth as far as Texas petro production. All those factors added up to us building the file and filing it. Later, I heard about some very big gas discoveries in Shelby County, just north of our Sabine location and decided to give the file a second look. On top of the file was the well blow out list for District 6 of Texas. For some reason I didn’t see it or it didn’t register when we did the researched the first time but...here is the link

http://www.rrc.state.tx.us/divisions/og/blowouts-mm/district6.html

Scroll down to the date 5/12/88 and 5/15/88 (there is a third not on the list). A church that was trying to drill WATER WELLS were blowing out, ie; they were drilling water wells and hitting natural gas. I have seen that only once before around Humble Texas, on the Moonshine Hill Salt dome (world class discovery in 1901).

So between the water wells blowing out from Shallow gas and the deep well results, it pretty much confirmed the Hemphill area has gas...a LOT of gas! Anyhow, we had the opportunity to lease this acreage from the BLM in 2003. We got as close as we could to that church (the actual northern lease lines touch Hemphill city limits). Even though we are in the National Forest we aren't in the boonies and have great infrastructure available. As things drilled up to the North in Shelby county and trends to us, it has proven this right so far.

Due to the huge amount of regulation and costs to drill, we have taken the wait and see approach and got on with other projects. I cannot start name dropping yet, but we have been approached by several large O&G companies about us selling the lease, a joint venture, partnership or something of this nature. No decisions made, we are weighing all options.


Keith A.








L~



"took me 3 long years to make a million bucks over night"

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