Alabama
In December 2008, BWB Exploration LLC ("BWB") entered into a purchase and sale agreement with BNK Petroleum Inc. ("BNK") under which BNK sold to BWB approximately 2,800 acres of oil and gas leases which are adjacent to BNK's East Tishomingo Field development, in Carter County, Oklahoma and an estimated 86,000 acres of leases in the Black Warrior Basin of Mississippi and Alabama for US$10 million. LNG Energy owns 60% of BWB.
BNK has also entered into an Exploration Agreement with BWB in regard to the Black Warrior acreage whereby BNK can earn up to a 50% working interest in a portion or all of the Black Warrior acreage by drilling a series of test wells on identified prospects. The exploration program requires BNK to pay for BWB's share of costs in an eight well test program. BNK is currently projected to incur an expenditure of up to US$10 million in the eight well program in order to earn the 50% working interest.
On October 14, 2009, the Hickman Farms 30-15 well was successfully drilled and production casing run to total depth targeting the Pottsville Sands. The Pickens County, Alabama well exhibited numerous gas shows while drilling. A full suite of logging tools was run in the well. The log data will be analyzed and interpreted over the coming weeks. It is anticipated that four different zones will be tested for commerciality. The testing is expected to commence in the second half of November.
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Oklahoma
Looking South West from North East
corner of the lease
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In May 2009, BWB participated in a successful exploration well targeting the Woodford shale (Berwyn 1-15H) in the Ardmore Basin of Oklahoma. Most details of the test are being held confidential but the operator was a major US independent oil and gas producer and horizontal ("HZ") drilling was employed to drill the test. BWB has a substantial leasehold position in the area totaling over 2,950 net acres in 12 contiguous sections (7,680 gross acres). The Company holds a 7.9% working interest and a 6.419% net revenue interest in this new producing HZ well.
Berwyn 1-15H wellhead
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In August 2009, BWB completed all legal regulatory submissions to the Oklahoma Corporate Commission ("OCC"), to become the recognized operator to drill the offsetting two sections to the south. These two sections, where BWB has a 77.8% and 50.1% working interest respectively, are part of a contiguous 12 section block that BWB believes contains the Woodford Shale with similar geological characteristics as those experienced in the original non-operated HZ well. BWB has initiated geophysical and drilling studies, to compliment a detailed economic analysis, that would support the drilling of the first of two to four HZ Woodford Shale wells in the two sections where BWB is the recognized OCC operator. A preliminary internal reservoir engineering analysis suggests effective shale resource drainage requires four to eight HZ wells per section.
Sales Gas Meter to Atlas Pipeline
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This area of the Ardmore Basin has existing oil & gas gathering infrastructure that is capable of transporting and processing all anticipated gas and liquid production for sale. Pending a successful technical & economic assessment, spudding of the first HZ well in this initial program, is anticipated within the 1 year timeframe mandated by the Oklahoma Corporate Commission approval process. Full scale development could incorporate all existing acreage, with BWB as operator.
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Looking South towards Ardmore
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Looking North from Section 22
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Location of Berwyn 1-15H
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LNG Energy Drilling Locations
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LNG Energy Drilling Locations
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