Pearsall gas flow to evoke Maverick drilling

Drilling may increase in the next 3 years in the Maverick basin in Southwest Texas after a vertical exploratory well flowed 10 MMcfd of gas from Cretaceous Pearsall on a short drillstem test.

By OGJ editors
HOUSTON, Oct. 3 -- Drilling may increase in the next 3 years in the Maverick basin in Southwest Texas after a vertical exploratory well flowed 10 MMcfd of gas from Cretaceous Pearsall on a short drillstem test.

TXCO Resources Inc., San Antonio, intends to deepen the Glass Ranch B 1-77 well, in which it holds 100% working interest, through the Pearsall after gauging the 4-hr flow from an interval defined as the top of Pearsall under its joint exploration agreement with EnCana Oil & Gas (USA) Inc.

Meanwhile, TXCO and EnCana forged a new exploration agreement to examine the Pearsall and exploit other formations.

TXCO acquired 100% of EnCana's interests in formations above the Pearsall in 250,000 gross acres in the southern part of EnCana's acreage position that are subject to lease maintenance obligations.

TXCO agreed to drill 3 horizontal Pearsall wells by July 31, 2008, carrying EnCana for a 50% working interest in each well. TXCO will acquire a 50% interest in the Pearsall and deeper formations in 1,280 acres around each well.

TXCO will have the option to drill 4 more horizontal Pearsall wells by July 31, 2009, carrying EnCana for 50% interest, and TXCO will earn a 50% working interest in the deep rights on 5,760 acres around each well.

TXCO will have a further option to carry EnCana for 25% interest in 16-20 horizontal Pearsall wells, depending on well costs, giving it the option to earn 50% of the deep rights in the remaining 250,000 acres in the block.

The vertical Glass Ranch well is the first effort by either company to drill the Pearsall in the southern part of the Maverick basin. TXCO said it believes that "horizontal wells will ultimately make the Pearsall a major producing interval in the Maverick basin."

Acquisition of the shallow rights gives TXCO the means to recomplete the 90-plus Glen Rose porosity wells drilled to date in other zones as they deplete.

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