TXCO Resources Announces Record 2008 CAPEX, Updates Current Operations.SAN ANTONIO San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. -- TXCO TXCO The Exploration Company TXCO Temperature-Compensated Crystal Oscillator Resources Inc. (Nasdaq:TXCO) today announced its board of directors has approved a record capital expenditure budget and drilling program for 2008. It also provided an update on current activity. CAPEX The Company's initial CAPEX for next year has been set in a range of $100 million to $110 million, including 97 scheduled wells. TXCO expects to fund its capital program through proceeds from a recent private placement of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , internal cash flow and an existing bank credit facility. The budget may be revised, based on drilling plan changes by partners, rig availability, drilling results, operational developments, unanticipated transaction opportunities, market conditions or commodity price fluctuations. The Glen Rose formation The Glen Rose Formation, located in the Dinosaur Valley State Park in Glen Rose, Texas, is a fossil bearing bed dating from the Aptian-Albian boundary of the early-Cretaceous. The Glen Rose Trackway is located at the base of the formation, which covers 1500 acres. , including the Maverick Basin's prolific Porosity oil play (50-100 percent working interest) will continue to receive the largest share of the budget - $40.7 million for 35 wells, including 10 re-entries. In the East Texas Fort Trinidad Field, $12.5 million has been set aside for 10 wells targeting TXCO's new Glen Rose Glen Rose was the head basketball coach at the University of Arkansas at various times during the 1930s through the 1960s, as well as the head football coach for two seasons during World War II. B shoal gas play (50% WI). In the Maverick Basin, $10.0 million has been allocated for TXCO's 50 percent share of expenses for drilling and steam generation equipment in the San Miguel San Miguel (sän mēgĕl`), city (1993 pop. 118,214), E El Salvador, at the foot of San Miguel volcano (6,996 ft/2,132 m). It has textile, rope, and dairy-products industries. The region produces cotton, henequen, and vegetable oil. tar sand tar sand or bituminous sand Deposit of loose sand or partially consolidated sandstone that is saturated with highly viscous bitumen. Oil recovered from tar sands, commonly referred to as synthetic crude, is a potentially significant form of fossil fuel. project. Also, the CAPEX has $7.0 million for two wells targeting the Pearsall shale gas
Shale gas is natural gas produced from shale. Because shales ordinarily have insufficient permeability to allow significant fluid flow to a well bore, most shales are not sources of natural resource play (100% WI) and $1.3 million for a Jurassic well (25% WI). Some $10.0 million will go to expansion of the Pena Creek San Miguel waterflood. In the Midcontinent (10-22% WI), the initial CAPEX includes $7.4 million for four wells in Oklahoma's Anadarko Basin The Anadarko Basin is one of the most prolific natural gas reserves in North America, with ultimate gas production in excess of 100 trillion cubic feet of gas.[1] External links
References 1. . In the West Texas Marfa Basin (50% WI), prospective for the Barnett and Woodford shales, the Company has allocated $1.5 million for exploration and development work. [TABLE OMITTED] Management Perspective "TXCO begins 2008 with more potential than ever to appreciably increase production and reserves," said CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. James E. Sigmon. "We will continue ramping up our CAPEX next year as we pursue the Company's multiple growth opportunities, including the San Miguel tar sand, Pearsall resource play and Fort Trinidad shoals - while waiting for Schlumberger's report before expanding our successful Glen Rose Porosity oil play. Coupled with our strong balance sheet, high oil price realizations and excellent cash flow, I believe 2008 will see an acceleration in our shareholder value growth." Current Operations Through early December, TXCO had spudded or re-entered 85 wells this year, including eight wells currently drilling. In the Maverick Basin's Pearsall gas play, the Glass Ranch B 1-77 (100% WI) has been initially completed vertically and is expected to go on production before year end. In its latest tests, the well flowed at a rate of 2,000 mcfd at 6,000 psi flowing tubing pressure for four days prior to being shut in pending construction of an 8.5-mile pipeline to produce the well. The Glass well is the first by TXCO to the Pearsall in the southern portion of the Maverick Basin. Targeting the same formation, TXCO has completed drilling its first horizontal Pearsall well, the Cage 26-2H (50% WI), having placed five open-hole packers at various intervals in the lateral in preparation to fracture-stimulate the interval by the end of January 2008. Meanwhile, the Burr Estate 1-68ST1 (100% WI) was successfully re-entered horizontally in the Pearsall and is awaiting a fracture-stimulation completion. In the tar sand pilot, the Company has successfully completed its initial, two-well cyclic steam pilot phase, having mobilized the oil and established a favorable WTI WTI West Texas Intermediate WTI Western Transportation Institute (Montana State University) WTI World Tribunal on Iraq WTI With The Idea (used in chess to point to the idea behind a specific move) price differential from area refiners. Based on continuing reservoir simulation Reservoir simulation is an area of reservoir engineering in which computer models are used to predict the flow of fluids (typically, oil, water, and gas) through porous media. studies, TXCO has decided to convert this pilot to a Steam-Assisted Gravity Drainage (SAGD SAGD Steam-Assisted Gravity Drainage (oil extraction process) SAGD Security Architecture Guidance and Directions ) process by the addition of two horizontal wells. TXCO currently is drilling the new horizontal wells with its recently purchased shallow drilling rig. The SAGD technique is used extensively in the Athabasca tar sands Tar sands is a common name of what are more properly called bituminous sands, but also commonly referred to as oil sands or (in Venezuela) extra-heavy oil. They are a mixture of sand or clay, water, and extremely heavy crude oil. in Canada. This marks the first time that a SAGD pilot will be applied to the San Miguel tar sands. The SAGD well pair is being drilled in between the existing cyclic steam wells, which will be converted to temperature-monitoring wells. Existing steam generation capacity will be doubled by the addition of a second 25 mmBtu steam generator A steam generator is a device used to boil water to create steam. It may refer to:
TXCO also will utilize its new drilling rig to establish a second pilot during the first half of 2008, featuring 8-16 new horizontal/vertical wells utilizing modified Fracture-Assisted Steamflood Technology (FAST), a technique proven by Conoco in years past. The wells will be drilled on a schedule consistent with expected deliveries of two new 50 mmBtu steam generators in April and May 2008. In the East Texas Fort Trinidad Field, intermediate casing has been set in the vertical portion of the Forrest 2H (50% WI), the first horizontal well to be drilled into the Glen Rose B shoal. TXCO expects to begin drilling the horizontal portion of the well within the next few days. The Company has identified 40 prospective locations in the B shoal, one of five gas-charged shoals located in the field, where it has 8,300 net acres under lease. TXCO's net Glen Rose Porosity oil sales early in the fourth quarter were averaging 2,440 bopd, an 8 percent increase from 2,253 bopd in the third quarter. Fourth-quarter sales levels are expected to be comparable to third-quarter results, consistent with the Company's seasonal activity slowdown due to the annual hunting season drilling moratorium. Currently, only one drilling rig is active in drilling Porosity wells. Schlumberger is continuing its comprehensive reservoir optimization study of the Porosity, which is anticipated to be concluded about the end of February 2008. About TXCO Resources TXCO Resources, formerly The Exploration Company, is an independent oil and gas enterprise with interests in the Maverick Basin, the onshore Gulf Coast region and the Marfa Basin of Texas, and the Midcontinent region of western Oklahoma Western Oklahoma can usually be defined as all territory west of Interstate 35, and west of Oklahoma City. It is usually broken up into two primary regions: Northwestern Oklahoma and Southwestern Oklahoma. . It has a consistent record of long-term growth in its proved oil and gas reserves, leasehold acreage position, production and cash flow through its established exploration and development programs. TXCO's business strategy is to build shareholder value by acquiring undeveloped mineral interests and internally developing a multi-year drilling inventory through the use of advanced technologies, such as 3-D seismic and horizontal drilling. It accounts for its oil and gas operations under the successful efforts method of accounting and trades its common stock on Nasdaq's Global Select Market under the symbol "TXCO." Forward-Looking Statements Statements in this press release that are not historical, including statements regarding TXCO's or management's intentions, hopes, beliefs, expectations, representations, projections, estimations, plans or predictions of the future, are forward-looking statements and are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements include those relating to oil and gas prices, capital expenditures, production levels, well test results, drilling plans, including the timing, number and cost of wells to be drilled, projects and expected response, and establishment of reserves. It is important to note that actual results may differ materially from the results predicted in any such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the costs of exploring and developing new oil and natural gas reserves, the price for which such reserves can be sold, environmental concerns affecting the drilling of oil and natural gas wells, as well as general market conditions, competition and pricing. More information about potential factors that could affect the Company's operating and financial results is included in TXCO's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended Dec. 31, 2006, and its Form 10-Q Form 10-Q See 10-Q. for the quarter ended Sept. 30, 2007. These and all previously filed documents are on file at the Securities and Exchange Commission and can be viewed on TXCO's Web site at www.txco.com. Copies are available without charge, upon request from the Company. |
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