Lexington Resources Announces Current Projects Drilling and Completion Update
Lexington Resources, Inc.’s (OTC Bulletin Board: LXRS; Frankfurt, Berlin: LXR) (the “Company”), announces the following with respect to drilling project interests in progress:
Oklahoma
New Well interest – Gates 2-19 horizontal Coal Bed Methane (“CBM”) well: Following from the successful Gates 1-19 horizontal coal bed methane (“CBM”) gas well recently completed by Orion Exploration, LLC, the Company announces its election to participate in the Gates 2-19 horizontal CBM proven undeveloped well on the same leasehold acreage. The Company and its Arkoma Basin CBM exploration-drilling partner Dylan Peyton, LLC participate equally in the 11.25% non-operated working interest and 8.91% net revenue interest in the Gates 19 series of wells to be drilled by Orion Exploration, LLC in McIntosh County, Oklahoma. The Company and Dylan Peyton, LLC have 72 acres of the 640 acre section undergoing drilling by Orion, which hold an aggregate of three horizontal CBM drilling sites with the same participation percentage, the second of which is in drilling development stages. The acreage forms part of the Company’s original 5,170 acre H-9 Prospect that is under drilling development by Lexington Resources and Dylan Peyton, LLC.
Peyton 1-25 vertical CBM well: The Company’s Arkoma Basin exploration partner Dylan Peyton, LLC has completed its CBM gas targeted vertical Peyton 1-25 well in an alternative gas sand zone located in close proximity to the CBM zone in which the well was drilled. The new well is located on Lexington Resources’ South Lamar lease in Hughes County, OK. An 8,000 foot pipeline is in process of being completed to accommodate imminently expected production from both the Peyton 1-25 and the Nicole 1-23H well also in final completion stages.
The well encountered multiple possible gas bearing sand zones in addition to the Hartshorne Coal target. Acid and fracture stimulation (“frac”) have been conducted. Production equipment has been installed. The Company and Dylan Peyton, LLC each have a 50% working interest in this well.
Nicole 1-23H horizontal CBM well: The Company’s Arkoma Basin exploration partner Dylan Peyton, LLC is currently completing the Nicole 1-23H horizontal CBM gas well. The Nicole 1-23H well is located on the Company’s South Lamar lease. The Nicole 1-23H has been fully drilled to a vertical depth of approximately 2,800 feet. Production equipment is being installed in conjunction with a water pumping unit and final hook up to the 8,000 foot pipeline also being utilized for the Peyton 1-25 well. The Company and Dylan Peyton, LLC each have a 50% working interest in this well. The well has not been fracture stimulated, and current plans are to not frac the well at this juncture to obtain early production and flow information.
Dylan 1-24H horizontal CBM well: The Company’s Arkoma Basin exploration partner Dylan Peyton, LLC is also currently drilling the Dylan 1-24H horizontal CBM gas well. The vertical and curve sections of the well are complete at the current date with drilling now being conducted on the lateral section of the well bore. The Company and Dylan Peyton, LLC each have a 50% working interest in this well.
Texas
Oliver Unit #1H horizontal Barnett Shale well: The Company’s wholly owned drilling company, Oak Hills Drilling and Operating, LLC (“Oak Hills”) continues completion work relating to the Oliver Unit #1H well located in Tarrant County, TX. Oak Hills continues to recover frac fluid from the well bore and has effected well cleanout and mechanical work. Well production is in the 200-300 MCF/Day range and remains unpredictable. Management believes the well is not performing to expectation and production logs and relating testing have been ordered to further attempt to increase production. The Company owns a 100% working interest in this well.
Martin #1H horizontal Barnett Shale well: Oak Hills has completed the drilling portion of all sections of the Martin #1H horizontal Barnett Shale well located on Lexington’s Martin Cantrell Lease in Parker County, Texas. The Company owns a 100% working interest in this well. The well will be scheduled for frac and completion subject to obtainment of adequate water resources.
Gilbert #1H horizontal Barnett Shale well: Drilling is ongoing at the Company’s 1,211 contiguous acre Gilbert lease located in Palo Pinto County, TX. The Gilbert #1H horizontal Barnett Shale well is the first well to be drilled on the lease and Oak Hills is currently drilling of the curve leading to the lateral section of the well bore. The Company’s 100% working interest in the Gilbert lease can support up to 10 horizontal gas wells on 120 acre spacing; seismic information obtained has aided the development of engineering and geological planning for drilling operations.
Paradise Park #1H horizontal Barnett Shale well: The Company has a 10% working interest in the Paradise Park #1H well that was drilled by Oak Hills under third-party contract for Ray Richey Management Company. The Paradise Park #1H horizontal gas well offsets the HHV Land #1H Barnett Shale horizontal gas well drilled by Oak Hills as third-party drilling contractor in April 2005. The well is scheduled for fracture stimulation on July 12-13 subject to water availability.
About Lexington Resources, Inc.: Lexington Resources, Inc. is a junior integrated natural resource exploration company engaged in the acquisition and development of oil and natural gas properties in the United States. Its current operational focus is on gas development initiatives in the Arkoma Basin, Oklahoma and the Dallas Fort Worth Basin in Texas. For further information see: www.lexingtonresources.com
Contact North America: Investor Relations, Lexington Resources, Inc. Phone: Toll Free (888) 848-7377 or (702) 382-5139 Fax: (702) 385-1202
e-mail: info@lexingtonresources.com
Contact Europe: International Market Trend AG
Phone: 41 43 888 67 00 Fax: 41 43 888 67 09
Stock Exchange Information: Symbol: OTCBB – LXRS
Frankfurt/Berlin Symbol – LXR, WKN: AOBKLP, ISN: US5295611ã¸25
Source: Lexington Resources, Inc.
