TransTexas stock has been in a downward spiral in recent months, but this month's discovery should put a stop to the free-fall. Currently at about $12 a share, TTG stands to make a good buck from the three McNeil wells.
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Another stock I have a significant interest in, Edge Petroleum, will also participate but I don't expect it to be meaningful to their bottom line. I also have a position in the McNeil wells personally, which could be significant to me (full disclosure).
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Recommendation: TTG: ACCUMULATE HERE
EPEX: BUY ON WEAKNESS.
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TransTexas Gas Corp. and Edge Petroleum Make Natural Gas Discovery in Live Oak County
HOUSTON May 7, 1998--TransTexas Gas Corporation (NYSE:TTG - news) today reported that drilling of the McNeil No. 1 exploration well in Live Oak County, Texas been successfully completed.
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Electric logs of the well indicated hydrocarbon pay in both the Luling sand and Tom Lyne sand of the Wilcox formation. These logs indicated net pay of 24 feet in a gross interval between 15,806 and 15,842 feet, with porosity up to 28 percent, in the Tom Lyne sand and 37 feet of indicated net pay in two separate zones between 12,966 to 13,022 and 13,274 to 13,327 feet in the Luling sand.
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This discovery is expected to be accretive to net reserves and production, which is expected to commence after surface natural gas treatment facilities are put in place. TransTexas said that it intended to test production from both zones as soon as possible and expected to drill 2 additional offsetting wells to develop the area before the end of this year. The porosity of the deeper pay is better than originally anticipated and does not appear to require fracture stimulation.
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TransTexas Gas Corporation is the operator of the prospect and owns an 87 percent working interest in the area of approximately 3,200 gross acres. This 3-D seismic prospect was developed by Edge Petroleum Corporation (NASDAQ:EPEX - news), who also owns a working interest in the prospect, that increases after payout.
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In Wharton County, TransTexas has also completed drilling of its Rioux No. 1 well to the Wilcox formation at 14,370 feet depth and is currently completing this well so as to commence production testing.
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TransTexas Gas is engaged in the exploration, production and transmission of natural gas and oil, primarily in South Texas, including the Eagle Bay field in Galveston Bay. For further information on the Company, please visit our web site at transtexasgas.com.
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Contact:
TransTexas Gas, Houston
Simon Ward, 281/987-8600
Email: ir@ttxg.com
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