Mainland Resources Inc. and American Exploration Corp. have entered into a letter agreement to jointly develop their contiguous acreage in Mississippi.
Mainland Resources will commit approximately 8,500 net acres and American Exploration will commit approximately 5,000 net acres to the project.
Mainland Resources will be the operator of the project area and has committed to pay 80 percent of the initial well (drilling and completion costs) to earn a 51 percent working interest in the well and total project area. American has agreed to pay 20 percent of the initial well (drilling and completion costs) to earn a 49 percent working interest in the well and total project area. Future costs for oil and gas activities of the 13,500 net acre project area will be split on a 51percent/49 perccent basis between Mainland and American, respectively.
American recently announced it has received a shale gas analysis completed by Schlumberger evaluating the total gas in place within the Haynesville Formation (Shale) on its 5,000 net acres held in the project area. From existing well data, the assessment confirms similar reservoir attributes to those of the Haynesville Shale of Northweste Louisiana and demonstrates estimated gas in place of at least 300 billion cubic feet per section.