HOUSTON, TX -- (Marketwire) -- 08/05/10 -- Matrixx Resource Holdings, Inc. (PINKSHEETS: MXXH), announces it has executed an agreement in principal to acquire up to a 50% working interest in an 82.2 acre lease known as the Sanger-Heirs prospect located in Live Oak County, Texas.
Upon completion of the Joint Operating Agreement by 100% of the working interest parties, Matrixx and the lease operator intend to test the upper Wilcox series of sands. Test depth is expected to penetrate the formation and log at 7,850 feet. This well is proposed to test these sands that are above the 'over pressure' Wilcox sands. The prospect was identified through subsurface structural mapping on top of the Wilcox Slick Sand and geophysical interpretation of a 3-D shoot across the lease and adjacent acreage.
The Sanger-Heirs (Wilcox) Prospect is located northeast of the Rhode Ranch East Field. This field has produced 53 BCF of gas from the Upper Wilcox sand. The 7 Slick Sand wells produced 50.3 BCF of gas. The Rhode Ranch East Field is located between two down-to-the-coast growth faults. These faults created a large anticline structure that trapped the Upper Wilcox Sand section. A second major Upper Wilcox field was discovered northeast adjacent of the prospect in Elms Field. It is on strike with our prospect and East Rhode Ranch Field. The 7 best Slick wells in this field produced 43.6 BCF of gas. The field is similar to Rhode Ranch East in that it is located between two down-to-the-coast faults and is of similar size. A third Wilcox Slick Sand field is located east and adjacent of the prospect. This is a small field consisting of 4 wells drilled deep enough to test the Slick Sands. The three best wells in this field produced 7.2 BCF of gas. This trap is an upthrown closure against the eastern most fault. There is a structural reversal of dip between this field and the Hanson-Sanger 1-B well. This well traps in the Slick Sand against an up-to-the-coast fault seen on seismic. A fourth Wilcox Slick Sand field is south of the acreage in Cloeter and Sanger Ranch Fields. Each field has one well, which produced in the Slick Sand. These two wells produced 3.27 BCF of gas out of an anticline bordered to the west by a substantial up-to-the-coast fault.
The prospective anticline is bordered to the northeast by Arco-Riser #3 well and the M.P.S. Prod.-Riser #3. The top of the Slick Sand is at -6833' and -6808' respectively. This shows a 25 foot gain of structure to the southwest. On the southwest side of the structure the Southland-Sanger #1 well was drilled and the top of the Slick Sand came in at -6836'. This being flat to the Arco-Riser #3 well is less than one mile to the northeast. On the east side of the drill site there is a small down-to-the-coast fault seen seismically and in the Arco and M.P.S. Producing wells. East of this north/south fault is a substantial up-to-the-coast fault seen seismically. This fault is believed to have created the hydrocarbon trap responsible for the gas production found in the Hanson-Sanger #1-B well. The four wells previously mentioned are believed to be on the flanks of an anticline that crests near the proposed drilling location.
The 3-D seismic data show the structural high to be tested by this prospect to be 62' high to the M.P.S. Producer - Riser #3 well, which is the highest well on this anticline. There is approximately 100' of Slick Sand and about 50' of Luling WX Sand found in this well. There is a high probability that Slick Sand will have a productive column of gas of 40' to 50' of sand at the top of the structure. Also the Luling Wx Sand could have 20 plus feet of pay sand. The productive Slick Sand sections in the best producing wells of East Rhode Ranch and Elms Fields had pay sections over 100' thick and produced 10 plus BCF of gas per well.
In consideration of the analogous well data from the adjacent properties, 6 to 8 BCF of gas is an extremely low expectation. The operator has begun to request bids on rig availability and timelines. It is anticipated by the parties that this well should be prepared in Q4 of this year. Anticipated drilling time to test depth is 15 days. Seismic and technical data will be posted on the website.
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 complete the proposed acquisition(s), the results of Matrixx's due diligence review of the candidate(s), the success of the business of the acquisition candidate(s), including the ability of Matrixx to continue 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 and technologies, competitive factors, timing, and other risks described in the Company's SEC reports and filings.