Feb 21, 2006 9:00:00 AM
TransAmerican Acquires Slack Heirs' Well and Leases
VANCOUVER, British Columbia--(BUSINESS WIRE)--Feb. 21, 2006--
TransAmerican Energy Inc. (TSX VENTURE:TAE) ("TransAmerican" or the "Company") is pleased to announce that it has entered into an agreement (the "Acquisition Agreement") with Energy Resources Inc. ("the Vendor") to drill and develop the Slack Heirs #1 well located in Yazoo County, Mississippi, located approximately four miles north west of the established Pickens Field which, according to Mississippi Oil and Gas Board records, has produced approximately 25,000,000 barrels of oil. In consideration therefore, the Company has agreed to pay 100% of the drilling and development cost for the completion of the Slack Heirs #1 well, currently estimated to be US$400,000.00. Upon completion, the Company will earn 100% of the net revenue after operating costs and royalties until payout, and 50% after payout.
A reserve and economical evaluation report was prepared by Fletcher Lewis Engineering, Inc., a qualified reserves evaluator in accordance with National Instrument 51-101 (NI 51-101) and the standards set out in the Canadian Oil and Gas Evaluation Handbook. The reserves estimates were functions of engineering judgment and interpretation, based on data available as of the effective date of the Report, being February 17, 2006. The reserves calculated by Fletcher Lewis for a 40 acre drainage area is 515,070 BBLS of oil, which is classified as both Proved Undeveloped and Probable.
The proposed Slack Heir #1 well is to be drilled approximately 600 feet east of the abandoned O'Reilly #1-21. The O'Reilly #1-21 was drilled in December 1981 to a depth of 10,002 feet, and encountered a series of seven Cretaceous sands at a depth of 6,412 to 7,500 feet. Two six foot intervals were perforated in the O'Reilly #1-21 and a production rate of 22 BBLS per hour was produced for two hours on a 3/4" in choke. The high producing rate of this test caused a pressure drawdown that caused water coning into the perforation, and this well was abandoned. Even so, at today's oil prices this well would have been a successful producer from all Cretaceous pay sands. Analysis of the well logs and cores indicate the O'Reilly #1-21 has seven Cretaceous sands with 110 feet of net oil pay with an average porosity of 22.7% and water saturation of 49%. Analysis of a dip meter log run on the O'Reilly #1-21 indicate that the Slack Heirs' location should be in a superior position, and at least 10 feet higher resulting in an expected 136 feet of net pay.
The Company has staked location for the new well and is filing for a permit to drill this week. Drilling will commence immediately upon contracting of a drilling rig to drill 7,500 feet. If successful, the Company has enough acreage to drill three to four wells in the area.
ON BEHALF OF THE BOARD
Gilbert Talafuse P. Geol, Director
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this News Release.
TransAmerican Energy Inc. (TSX VENTURE:TAE)
Source: TransAmerican Energy Inc.
