Palo Duro, West Texas
In November 2005, Maxim signed a “letter of intent” with Kendrick Oil & Gas Company to acquire a 75 percent net revenue interest in 1,390 acres in the new and emerging prolific Pennsylvanian Sands play in the Palo Duro Basin in Motley County, Texas. In consideration for the Palo Duro property, Maxim advanced $150,000 (US) to Kendrick Oil.
The Palo Duro Basin is located in west Texas, and is approximately 260 miles northwest of the Fort Worth Basin, which is home to the famous Barnett shale play. The Palo Duro Basin (Lower Pennsylvanian Bend) and the Fort Worth Basin (Barnett Shale) have significant geological similarities.
COMPARISON OF LOWER PENNSYLVANIAN BEND TO THE BARNETT SHALE
Basin
Forth Worth
Palo Duro
Depth (feet)
6,500 - 8,500
8,250 - 9,500
Thickness (feet)
200 - 400
400 - 1,000
Total Organic Range %
0 - 12.5
0 - 10
Total Organic Average %
4.0 - 5.5
2.8 - 5.0
Thermal Maturity % (Ro)
1.0 - 1.3
1.0 - 1.2
Reservoir Pressure (PSI)
3,000 - 4,000
3,000 - 3,240
Ultimate Reserves, BCI
16.0 per section
32.0 per section
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Through development and improved fracture techniques, Barnett Shale transformed has become the largest producing natural gas field in Texas, estimated to contain 1 trillion cubic feet (Tcf) of recoverable gas per 45,000 acres in the core area.
The property borders Bankers Petroleum Ltd. (TSX: BNK) and Vintage Petroleum Inc. (NYSE: VPI). The acreage is 1.5 miles N.E of the successful Stephens # 1 well, recently completed by Tyner Resources Ltd. (TSXV: TIP).
The geological similarities between the Lower Pennsylvanian Bend and the Barnett Shale look promising. Maxim is well positioned in this area with its 75% percent revenue interest and is currently looking at options to advance this property along. In the mean time, the Palo Duro Basin continues to be evaluated and tested to identify the best fracture techniques to recover the known gas reserves. |
