Onshore Texas

From the 13 3D seismic surveys it has studied so far Texon has leased 15 Prospects which are ready for drilling. Lease checking is being undertaken on a further 16 prospects, with the other 17 not being available for lease at this time. There are 120 more 3D seismic surveys yet to be evaluated by Wandoo and these are expected to provide many more prospects for Texon over the 8 year term of the Prospect Generation Agreement.

Of the 15 Prospects already leased, 10 have objective reservoir depths of less than 2100m and together these prospects are targeting a gross unrisked reserve potential of 4.7 to 12.6 bcf of gas or 3.5 to 9.5 bcf as to Texons’s Nett Revenue Interest (NRI).  The other five have reservoir objectives at depths greater than 2400m and these have a combined gross unrisked reserve potential of 89 to 195 bcf of gas or 43 to 93 bcf as to Texon’s anticipated Working Interest (WI) and NRI.

Together these represent a total gross unrisked potential targeted by the 15 well drilling program of 94 to 207 Bcf of gas or 50 to 100 Bcf as to Texons’s expected WI and NRI.

Texon intends to retain a 100% WI in the shallow program and a WI of between 50% and 75%

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