Live Oak County Prospect.Through the interpretation of 3-D seismic data, we identified and participated
in the drilling of a 16,500 foot test well in Live Oak County, Texas in the fourth quarter of 2007 and tested the well in December 2007. The well was completed with first production commencing in the second quarter of 2008. We have identified further opportunities within an Area of Mutual Interest (“AMI”) agreement covering approximately 22,000 gross acres.
In the Other Onshore region, we currently have approximately 41,000 net acres under lease with an average non-operated working interest of 47%.
Other South Texas
Olmos Trend. On December 23, 2008, we closed on the acquisition of a 70% non-operated working interest in 231 gross producing Olmos wells in the Olmos trend of South Texas. Production from these wells was approximately 5 MMcfe/d net at year end 2008.
Dinn Sand Trend. In 2008, we acquired a significant acreage position with approximately 100% operated working interest adjacent to our existing Perdido development trend. This leasehold acquisition has potential in the intermediate depth Dinn Sand trend. The Dinn Sand has been sparsely developed with vertical wells, and has potential for additional horizontal and vertical well development over most of the leasehold. Additionally, much of the leasehold has potential for extending the Perdido sand trend horizontal development from our adjacent non-operated 50% working interest acreage to this operated 100% working interest leasehold.
Eagle Ford Shale Trend. In 2008, we acquired several sizable acreage tracts with potential in the emerging shale gas play in the newly discovered Eagle Ford Shale trend. Along with acreage acquired in previous years, and the deep rights acquired with the Olmos production acquisition, we now have approximately 25,000 net acres in the Eagle Ford Shale trend. Most of this acreage also has potential in the Austin Chalk and Edwards formations.
