Press Release Source: Matrixx Resource Holdings, Inc.
Matrixx to Acquire an Additional Interest in the Clovelly Prospect
Monday May 21, 4:00 pm ET
LOS ANGELES, CALIFORNIA--(MARKET WIRE)--May 21, 2007 -- Matrixx Resource Holdings, Inc. (OTC BB:MXXR.OB - News), announced today that it has agreed to acquire an additional interest in the Oil and Gas Prospect known as the Clovelly Prospect.
Matrixx has signed a purchase agreement to acquire an additional eleven percent (11%) working interest for a total of a sixteen percent (16%) working interest in the Clovelly Prospect. 3D Seismic survey of the property has caused for a plan test of the "P" Sand at approximately 14,700 feet, and if successful, would expect significant reserves in the well to an anticipated 11 million barrels of oil.
The well was originally drilled by Grey Wolf (AMEX:GW - News) under a turnkey contract with the operator to test the "M" at 13,500 feet. After not reaching the "M" sand at 13,500, the operator and its partners have agreed to continue to drill to approximately 14,200 feet to reach the "M" sand and to test the "P" sand. After drilling to 14,280 feet, we reached what is known as a stringer sand as well as a drilling break. A stringer sand is one that has evidence of oil in the sand. A "drilling break" is defined as encountering "reservoir quality sand" and pressure, in this case, gas was entering the well bore.
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At that point the gas pressure could not be regulated properly, therefore the well had to be plugged and abandoned for both safety and logistical reasons.
After carefully reviewing the available options, it had been determined to initiate several courses of action. Certain discoveries and findings while drilling the No. 2 well has caused drilling a "twin" hole to become a certain and viable option. A twin hole is described as drilling a well adjacent to an existing well, such as the No. 2 well. Additionally, for economical feasibility, it is planned to drill as soon as practicable, an additional well known as a PUD (Proven-Undeveloped) well up-structure to a target depth of 12,500. The PUD recoverable reserves are estimated at 250,000 barrels of oil with an upward potential of 500,000 barrels.
Drilling of the twin will take place to the expected "M" sand. The Company expects drilling of the twin to take place near the original well so that we may tap into the first gas discovery found; while, simultaneously at a distance as not to encounter unfavorable conditions as a result from the initial hole. This is done to maintain the integrity of the new drilling location.
The No. 2 well encountered a two foot gas discovery, but due to the location of the hole; the drilling may have occurred offset whereby an additional 28 feet of discovery may exist containing up to 5 BCFG (billion cubic feet of gas) valued at nearly $35 million. While the gas discovery might be considered as an added benefit, the intended cause of drilling the twin is primarily to target what is known as the "M" sand at or about 14,300 feet to 14,500 feet with a prospective size of 10 to 11 million barrels of oil.
Located 35 miles southwest of New Orleans in the Lafourche Parish, the Clovelly Field is a late piercement salt dome that traps hydrocarbon from Late to Middle Miocene time. Since its discovery in 1950, the field has produced in excess of 30 MMBO (Million barrels of oil) and 200 BCFG (Billion cubic feet of gas). Reservoirs typically exhibit moderate water drives and benefit from water and/or gas injection. Stone Energy Corporation (NYSE:SGY - News) has redeveloped the eastern flank of the field with additional drilling and water injection. Similar opportunities exist here at our proposed location.
Matrixx has remained steadfast in its efforts in acquiring growth and investment opportunities in the oil and gas sector with the intent of providing the Company and its shareholders a much-improved increase in shareholder value. Additionally, the Company is now positioned to aggressively exploit its properties to accelerate cash flow and to provide rapid returns on its investments in the oil and gas sector.
Safe Harbor Statement: This press release contains forward-looking statements as defined in The Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "plan", "confident that", "believe", "scheduled", "expect", or "intend to", and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties, and actual results may differ materially from those expressed in any forward-looking statement. Such risks and uncertainties include, but are not limited to, the ability of Matrixx to sell the applicable products and the acceptance of those newly designed products by the market, market conditions, the general acceptance of the Company's products, competitive factors, timing, and other risks described in the Company's SEC reports and filings.
Contact:
Contacts:
Matrixx Resource Holdings, Inc.
Konstantine Tsakumis
Media & Investor Relations
(347) 647-1508
Email: ir@mrhi.net
Website: www.mrhi.net
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Source: Matrixx Resource Holdings, Inc.
