Project Information

Burleson Properties

The Company has a 40% working interest in the various Burleson County leases known collectively as the Burleson Properties. The leases cover a total of 8100 net acres located in the southern part of Burleson County in Texas in the USA, all located within the Giddings oil & gas field with the main reservoirs being the Austin Chalk and Georgetown Formations.

Burleson Energy also has a right to participate at cost in all leases acquired by AKG Energy, with a nominal total of 10,000 net acres targeted within an Area of Mutual Interest (“AMI”) in Burleson County.

Historically, wells drilled into the Giddings Field have a high probability of finding hydrocarbons. The critical factor will be whether flow rates and ultimate recoveries per well will be sufficient to generate an acceptable rate of return on investment. 

Other than a 2% overriding royalty which is payable by the Company to AKG Energy over its existing acreage, Burleson Energy is receiving a ground floor entry into the Burleson Properties and will pay no premium to AKG Energy for future leasing or drilling.   

AKG Energy has reviewed the locations for over 350 drilled wells and has accumulated a large amount of data, knowledge and expertise in the Austin Chalk trend.  Using this database and expertise AKG Energy has developed a geologic model that assists in determining the field limits, the trapping mechanism and the location of the extraordinary “sweetspots” in the trend. The key to real commercial success is to drill into the reservoir where fracturing is well developed (“sweetspots”) to maximize flow rates and reserve recoveries. An extensive sparsely drilled area of southern Burleson County has been identified from seismic data as including potential sweetspots, and is the focus of the proposed drilling.

It is intially proposed to drill two dual-lateral horizontal wells targeting oil and gas in the Austin Chalk and Gerogetown formations. However there are some 11 drilling targets identified to date with more leases being acquired. Drilling commenced on the first well in April 2007. See presentations and the Company's ASX releases to follow progress.

Champions Properties

In late 2006 AKG Energy brought a series of new Austin Chalk projects to Burleson Energy, involving some 16,500 acres included in several areas of mutual interest.  The large US independent Marathon Oil is very active in the Giddings Field in Grimes County, Texas, and invited AKG to participate in, and operate, the drilling phase of a number of infill gas development wells in the Champions area of this field.

The Champions properties are located on a broad anticlinal nose that is superimposed on regional southeasterly dip of the chalk, which has resulted in a high degree of local fracturing and a productive sweetspot. Marathon has produced 86 Bcf of gas from 20 horizontal wells in this area since May, 1997. Production is from deep (14,500 ft. +/- 500ft.), overpressured Austin Chalk.

AKG will operate these wells through drilling and completion, and Marathon will assume operations once the wells are put on production.

AKG offered BUR the opportunity to participate in the joint venture with Marathon on the same farmout terms.  In most leases BUR is to pay 20% to earn a 17.5% working interest in the wells/leases.  Some additional AKG held leases in the Champions area have been added, under similar terms. In return AKG has been issued with further BUR shares (including additional share tranches if wells are successful).

Under the arrangement 7 firm wells will be drilled with at least another 4 well locations available in current leases.  They will target the Austin Chalk reservoir with a single 5000’ lateral but at greater depths and higher pressure than the Burleson County wells.  The Champions wells therefore are expected to produce gas at higher rates and with greater reserves than those at Burleson.

The first of the Champions wells spudded in early July 2007. Progress can be followed in the Company's weekly drilling reports released to the ASX.

 Brazos Property

This single well will target three reservoirs (Austin Chalk, Buda and Georgetown Formations) in Brazos County in leases covering 487 acres. This location is essentially an infill location. It was identified and made possible by the fact that AKG held a significant acreage position with production from a shallower well, which is surrounded by productive Austin Chalk, Buda and Georgetown wells. Like in the Champions wells, BUR will pay 20% to earn a 17.5% WI, This well, the Weir 1, will be drilled as part of the Burleson County drilling campaign in the latter part of 2007.  

Giddings Field

Austin Chalk production began in the Giddings Field in 1960 with the City of Giddings #1 well in Lee County.  Giddings Austin Chalk drilling began in earnest after 1973 when this abandoned well was re-completed with an acid job and began flowing over 350 bbl/day. It has since produced over 600,000 barrels of oil. This established the chalk as a fractured reservoir play, and it was soon determined that fractures could be located with seismic data. A drilling phase of about 4,400 vertical wells ensued  through to December 2005, where the chalk  has produced 772 million barrels of oil and 4.8 trillion cubic feet of gas. The Giddings Field dominates the region, accounting for 65% of the oil and 75% of total production from the trend.

In 1988 new life was given to the Giddings Field with the advent of horizontal drilling technology. This enabled industry to drill horizontally through vertical fractures in the gently dipping chalk and thereby intersect more fractures in a single wellbore. This led to some extremely prolific horizontal wells, commonly in areas already densely drilled by vertical wells. 

Production occurs from 6,000 feet to 15,000 feet, and is predominantly gas below 9,000 feet and oil above.  The target depths for the Burleson Properties wells will be in the range of 9,500 feet to 11,000 feet. Both the Austin Chalk and Georgetown Formations are gently dipping, fractured carbonate reservoirs with near-vertical fractures. This makes them ideal for low risk development by horizontal drilling. 

About 45% of the Giddings Field oil and 66% of the gas have been produced from 2,100 horizontal wells drilled since 1988. Sweetspot wells have produced 57% of the oil and gas in this field from only 15% of the wells.

Access to the Giddings Field is excellent. The topography generally consists of low rolling hills, in a rural setting with numerous roads. Pipeline access is also very good and there is ample excess capacity in systems currently in place.


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