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Gold/Mining/Energy : Golden Arch Resources---GAI.V -- Ignore unavailable to you. Want to Upgrade?

To: andre dallaire who wrote (339)	4/17/2001 12:25:09 AM
From: Oak Man.	Read Replies (1) \| Respond to of 359

Yes Andre company mangement has been working since last July on a significant play that is now bearing fruit. The GAI return to drilling in Texas is best explained by the comments of Mitchell Energy President published in their news release July 2000. (edit below by YT) "but now we're also able to use this technology to significantly extend the life of a well and increase the amount of reserves recovered per well. The benefits of this combination are magnified...even after working the Barnett play for nearly 20 years.......A dramatic example of the success refracturing can have is the recent re-entry of the oldest well in the field, which had earlier been temporarily abandoned. After the refracture treatment, the well began producing over 1.1 million cubic feet of gas per day, approximately the same rate as a new well...."We knew we had found a crucial key to unlocking the potential of this tight gas reservoir when the results from our light sand fracture completion technology came pouring in," said Mr. Mitchell." The Woodlands, Texas, July 13, 2000 - Mitchell Energy & Development Corp. (NYSE: MND) today announced that results from its accelerated development program in the Newark East Barnett shale field in North Texas are significantly exceeding expectations. In just over a year, the company's gross natural gas production from the Barnett field has doubled to 172 million cubic feet per day and is pushing the company's total production ahead of its 15 percent growth target for this year. The Barnett field, located about 40 miles north of Fort Worth, Texas, ranges in depth from 7,000 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 an overall 10 trillion cubic feet of recoverable reserves, the equivalent of a 1.67 billion barrel oil field. George P. Mitchell, chairman and chief executive officer noted, "Over the last few years our estimated recovery efficiency in the Barnett has more than doubled, but we are still only recovering less than 10 percent of the total gas in place. Light sand fracture technology has helped us tremendously in our efforts, but we continue to look for new ways to increase reserves." The use of light sand fracture technology – forcing massive amounts of water carrying small amounts of sand into the formation – is driving the company's expansion program in the Barnett. This new technology reduced total well costs by 20 percent, and more importantly, made it possible to expand the field limits as well as complete the Upper Barnett interval, both of which had been marginally uneconomic. The rapid increase in gas production from the Barnett is the result of an aggressive four-pronged effort using this new technology, both to maximize production and ultimate recovery from the reservoir. First is the acceleration of the company's drilling program, which has added 153 wells to the field since late 1998. Currently six rigs are working and will drill at least 140 new wells each year; a significant future increase in well completions is expected as the company contracts additional rigs. Second is the addition of the Upper Barnett interval to about 400 existing wells and all new wells drilled. The Barnett shale is separated into two sections by a layer of impervious rock and completion of the Upper Barnett interval prior to the advent of light sand fracture technology was uneconomic due to the high fracture treatment cost. Addition of this interval increases per well recoverable reserves by 250 million cubic feet, a 25 to 33 percent increase in total per well reserves. The third undertaking is to significantly increase the per well drainage area and thus the overall recovery from the reservoir. To achieve this, the company is applying follow-up fracture treatments to mature wells in the field. A dramatic example of the success refracturing can have is the recent re-entry of the oldest well in the field, which had earlier been temporarily abandoned. After the refracture treatment, the well began producing over 1.1 million cubic feet of gas per day, approximately the same rate as a new well. "We knew we had found a crucial key to unlocking the potential of this tight gas reservoir when the results from our light sand fracture completion technology came pouring in," said Mr. Mitchell, "but now we're also able to use this technology to significantly extend the life of a well and increase the amount of reserves recovered per well. The benefits of this combination are magnified when you consider that we likely have another 2,000 to 5,000 undrilled locations even after working the Barnett play for nearly 20 years."