News:,
Cons Odyssey to acquire Barnett Shale interest
Thu 7 Jun 2001
News Release
See Consolidated Odyssey Exploration Inc (ODE) News Release
Mr. John Thornton reports
Consolidated Odyssey Exploration and Golden Arch Resources have reached an
understanding pursuant to which Odyssey will have the right to participate
in the drilling and development of up to five Barnett Shale wells located
in Jack county, Texas, and thereby acquire a 5-per-cent working interest in
each well from Golden Arch which itself has the right to acquire a
25-per-cent working interest in the wells to be drilled.
In order to earn a 5-per-cent working interest, Odyssey must pay Golden
Arch $25,000 (U.S.) for each well it wishes to participate in. In addition,
upon successful drilling, completion and production of a minimum of 100,000
million cubic feet per day from each well, Odyssey is required to issue
100,000 common shares in its capital stock to Golden Arch. In order to
secure its participation in this program, Odyssey has agreed to advance a
refundable deposit of $35,000 to Golden Arch as its initial contribution to
the program. Advance of any further funds and the issuance of the shares in
Odyssey are subject to execution of a formal agreement, closing of the
private placement referred to below and acceptance by the Canadian Venture
Exchange.
The Barnett Shale field is located approximately 40 miles northwest of
Forth Worth, Tex., ranges in depth from 6,000 to 8,000 feet and averages
550 feet of pay. Based on a 1998 forecast prepared by the U.S. Geological
Survey, this extensive gas accumulation was estimated to have 10 trillion
cubic feet of recoverable reserves over all, equivalent of a
1.67-billion-barrel-of-oil field. The use of light sand fracture technology
-- forcing massive amounts of water carrying small amounts of sand into the
formation -- is driving the development rush in the Barnett. This new
technology reduced total well costs by 20 per cent, and more importantly,
made it possible to expand the limits of the Barnett Shale field. Barnett
Shale production was first established in the Newark East field in Wise and
Denton counties, where it grew from less than one billion cubic feet of gas
from 25 wells in 1985 to 19.2 billion cubic feet from 306 wells in 1995.
During the past five years, production has more than doubled to 189 million
cubic feet of natural gas per day from over 500 wells. Current expected
recoveries amount to only 8 per cent of the actual gas in place.
The operator of the project is the Cumming Company Inc. (CCI) of Fort
Worth, which operates several other recently completed Barnett Shale wells
in the vicinity, including the recently completed No. 7 Wimberly. CCI
considered the No. 7 Wimberly to be a significant shale discovery and
within the next weeks the participants will commence drilling two offset
wells to further develop the Wimberly acreage. Golden Arch currently holds
a 4-per-cent working interest in the No. 7 Wimberly. Contingent to the
success of the next two wells, the participants are preparing for a 25-well
development program for the newly discovered field.
In addition, Odyssey has negotiated a private placement totalling $125,000
by the issuance of 500,000 units at 25 cents per unit in order to finance
its respective portion of the exploration program to earn its 5-per-cent
working interest. Each unit will consist of one common share and one share
purchase warrant entitling the holder to purchase one additional share at a
price of 33 cents per share for a period of two years. A finder's fee of
7.5 per cent is payable by Odyssey in shares on $100,000 of the private
placement. The private placement and payment of the finder's fee are
subject to closing of the formal participation agreement referred to above
and acceptance by the Canadian Venture Exchange.
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