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Shay
Pipeline Resources, Inc. has recently acquired a leasehold interest in the Shay prospect, which is located adjacent to the Mission River lease, which we are currently developing. The Shay prospect is located immediately adjacent to the southeast corner of the Townsite of Refugio in the Old Refugio Field area of Refugio County , Texas . This area is located within a portion of the Frio Trend that is unequaled for its prolific oil and gas production.
Previous exploration in the Old Refugio Field has delineated a geologic setting that is considered to be ideal for additional infield drilling. The field has an excellent structural setting and has produced more than 19 million barrels of oil and 47 Bcf from more than 25 separate Frio reservoirs. Most of this production has occurred from several intervals within the shallow Frio section which, although prolific, are extremely complex stratigraphically . Detailed mapping and a review of the production-records suggest that many of the reservoirs were not fully exploited and indicate that substantial infield reserve growth potential exists. The planned infield development program is expected to encounter a combination of new reservoirs, thin bypassed reservoirs, incompletely drained pressure depletion reservoirs and water drive reservoirs with additional "attic" reserves or untapped compartments.
Pipeline Resources anticipates the first test well to be drilled on this property in the fall of 2005.
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