DALLAS - Saxon Oil Company Ltd. ("Saxon") (PINK SHEETS: SXNOF) (TSX VENTURE: SXN) (FRANKFURT: OVG) (BERLIN: OVG) is moving ahead with several noteworthy projects in the first half of 2008 that should continue to lead to improving cash flows, improved financial performance and increased shareholder value. Saxon remains active in its drilling and completion program throughout the first quarter of 2008. The company’s midstream gathering gas system in central Kansas, held in Saxon’s wholly owned subsidiary, Central Kansas Gas Gathering (CKGG), should begin service in the 2nd quarter of 2008. In Italy, AleAnna Resources LLC, of which Saxon holds a 20% membership interest, is progressing on the process to obtain government approval for a 3d seismic survey scheduled for fall 2008.
In the 4th Quarter of 2007 and 1st Quarter of 2008, Saxon successfully drilled and worked over a number of wells in Texas, Oklahoma and Kansas. Saxon is currently producing more than 200 barrel of oil equivalent per day (boepd), with production equally divided between crude oil and natural gas. A year ago, Saxon was producing approximately 80 boepd, with virtually all production being natural gas.
In January 2008, Saxon worked over the Saxon Oil Walker No. 1 well in Rush County, Kansas. Prior to this work the well was non-commercial, producing less than 1 bopd. After the completion the well has been producing 4 bopd. Following the workover of the Walker well, Saxon began work on the Stull No. 1 well, also in Rush County, Kansas. Prior to the workover, the well was producing less than 2 bopd with more than 400 bbl of water per day. The well is now producing 8 bopd, a four-fold increase from prior production rates, with a dramatic reduction in water production. In a similar operation, Saxon is participating in the reentry and recompletion of the Castle Cheney No. 4 well in Gove County, Kansas. Two potentially productive zones will be tested for 90 to 120 days. Saxon owns a 25% non-operating, working interest in the well.
All three wells in Kansas were recompleted using coil-tubing conveyed, 1-inch horizontal lateral holes that extend 300 ft or more into the formation. The technology is proving to be an inexpensive but effective way to boost oil production, and Saxon is studying the economic viability of using it on other wells in surrounding area. In addition, Saxon is looking to drill three to six new development wells on acreage it currently holds in Kansas.
In Louisiana, Saxon has a 10% working interest in the exploratory Kepco Hailey No. 1 well. This well tested oil, gas and water with excessive amounts of sand from the Wilcox objective sand and is now being completed using a gravel pack to control the sand influx. The Hailey with its adjacent salt water disposal well should commence production in the next several months.
As previously announced in late 2007, Saxon is participating in the completion of the Eumont State No. 1 well in New Mexico. The well had electric log and oil sample shows from multiple intervals, however, drilling and completion problems persist. Initial operations in one potentially productive interval have concluded with no commercial oil recovery. Saxon is currently evaluating proposals for testing several other intervals in this exploratory well. Saxon owns a 15% working interest in the Eumont well.
The recently announced Tri C Jackson-Williams No 3, Comstock Rust Estate 2-3 and Western Williams No. 3-9 wells drilled in south Texas, east Texas and Oklahoma, respectively, continue to produce at attractive rates. The east Texas well is cashing flowing and Saxon expects revenue from the other wells to commence in the next several months. Further development activity in both east Texas and in Oklahoma is expected in 2008.
About Saxon Oil Company Ltd:
Saxon Oil Company is a Tier One Texas-based Canadian company, trading on the TSX Venture Exchange under the symbol SXN. The Company is an independent oil and gas company engaged in the acquisition, development and production of oil and natural gas reserves. The Company seeks to deliver strong shareholder returns through an effective exploration and development program that incorporates sound business practices with the latest oil field technologies. The goal is to steadily increase proven reserves of oil and natural gas – which, in turn, will lead to enhanced cash flows and earnings per share.
This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding plans for completion, production potential, other targeted areas and expansion and development plans and objectives of Saxon Oil Company Ltd. are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy and accuracy of this Release.
Contact:
Saxon Oil Company
Patrice Nazareno
1 (866) 515 7708