There still are new sources of natural gas in Texas according to emerging oil and gas company, Micron Enviro Systems (MSEV). The company announced that the Z2 well on the Green Ranch Prospect located in Stephens County has been successfully tested and appears to be a “major new gas formation” discovery.

The well was open-flow tested with gas rates up to 1.5 MMcf of gas. Vancouver, BC-based MSEV said the new discovery was found in a fractured formation that has “essentially” not been tested in the past. Because of the size of the new find, the company said a more substantial drilling program than the proposed 15 well program might be necessary. The Z2 well should be hooked into the pipeline for sales within two days. MSEV and Canadian-based Habanero each own a 5% stake in the well, with private investors holding the remaining 90%.

Speaking about the tested flow rate, MSEV spokesman Jason Gigliotti said “I don’t think we expect anything to those levels. We are definitely not going to be ready for that kind of flow immediately.”

“The most exciting aspect of this new major discovery for MSEV is that it is a new formation that has not really been exploited in this prolific world-class oil and gas-producing region,” said Bernie McDougall, president of MSEV. “This is the kind of new discovery that MSEV may be able to build the company’s future around for many years to come. This new discovery puts MSEV’s goal of becoming a mid range oil and gas company closer to reality.”

Based upon his interpretations of all the data collected on the Z2 well, Larry Burroughs, professional engineer for the Green Ranch Prospect, said he believes that “the gas-in-place volume calculates [to] 3.866 Bcf of gas for a 160 acre drainage area.”

Based on a current natural gas price of $5.90/Mcf, MSEV said a simple gross calculation of gas value would equal a gross value before any deductions of $23,157,340. “We were advised by a local geologist that a “look-alike” zone, two counties away (but essentially the same formation), produced close to 7 Bcf of gas per well. He advises that this well (Z2) is acting the same.”

The Green Ranch Prospect is a proposed 15 well program consisting of 4,131 acres of leasehold located 50 miles northeast of Abilene, TX and approximately 10 miles northwest of Breckenridge, TX, along the North Stephens-Shackelford County line. MSEV said the Green Ranch Prospect lies within an oil and gas producing province identified as Texas Railroad Commission (TRRC) District 7B, which encompasses 24 counties in North Central Texas.

According to the company, TRRC reports indicate District 7B has produced a total of 2.225 billion boe from 1935 through to June 2001. These reports also indicate the district has made 2.277 Tcf of unassociated or gas well gas from 1970 through to June 2001. It is estimated that this district also accumulated approximately 2.78 Tcf of casinghead gas. During 2000, District 7B made 14.1 million boe, 18.6 Bcf of casinghead gas and 45.3 Bcf of unassociated gas. There has been over $1.9 million spent on the Green Ranch Prospect.

“MSEV now has two wells generating oil and gas revenue at one of the most lucrative times in history to be selling oil and gas,” added McDougall. “MSEV management is extremely excited about the future prospects for MSEV….At a current market cap of around $1 million, we feel this new major discovery could offer tremendous leverage for MSEV shareholders in the short term and for many years to come.”

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