TXCO Resources Reports Strong Pearsall Well Flows

TXCO Resources Reports Strong Pearsall Well Flows

Thursday, August 7th 2008

TXCO Resources Inc. provided initial test results on its Myers 2-683H well targeting the Maverick Basin’s Pearsall shale gas resource play.

Following completion of a five-stage fracture stimulation, the well (100 percent working interest through completion) flowed an average of approximately 3.5 million cubic feet of gas per day and 2,500 barrels per day of frac fluid at 3,875 psi flowing tubing pressure. Flow rates continue to rise as the well returns frac fluid.

The well is TXCO’s third horizontal Pearsall well to be fracture stimulated this year and the first to be successfully treated with five stages. It is the first Pearsall well in which the horizontal lateral, 3,000 feet long, was fully cased, cemented and perforated for limited entry. Also, the Company conducted microseismic monitoring from a nearby offset well during the treatment, allowing it to observe and modify the stimulation in real time. The Myers well provides TXCO with valuable data that will be used to improve future frac designs on other Pearsall wells to be drilled and fracture-stimulated in the future.

TXCO’s combined Pearsall project area exposes the Company to the overpressured shale play on more than 848,000 gross acres (340,000 net acres) across the Maverick Basin in Southwest Texas.

TXCO Resources is an independent oil and gas enterprise with interests in the Maverick Basin, the Gulf Coast region and the Marfa Basin of Texas, and the Midcontinent region of western 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.”

Website: www.txco.com

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