Does this essentially mean that the third party can get the interest in the "North Block" acreage if they help pay first to drill the "South Block" acreage? Any idea who this third party is? I posted on the main page but got no response. It sounds good for San Augustine if I am understanding it correctly.

HAYNESVILLE CARRY AND EARNING AGREEMENT

St. Mary has entered into a CEA with a third party that relates only to the Haynesville and Bossier intervals located on roughly 32,000 net acres in East Texas. The agreement allows the third party to earn 95% of St. Mary's interest in approximately 8,400 net acres in Shelby County, Texas (the "North Block") and 5% of St. Mary's interest in approximately 23,400 net acres in Shelby and San Augustine Counties, Texas (the "South Block"). In exchange the Company will be carried in roughly $87 million in drilling and completion costs for horizontal wells planned for the South Block. St. Mary will be the operator of wells drilled on the South Block. Once St. Mary has completed the expenditure of the carry amount, the two parties will share all costs on the affected lands in accordance with their respective ownership interests. St. Mary's acreage position in the Haynesville shale, adjusted for the CEA, is roughly 32,300 net acres.


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Alongview,
I thought of you as I read this on the SM web site today. Maybe we will learn somthing tomorrow during the conference call. I'm not holding my breath! They are using the term "third party". Who is the second party????
Assuming 3 comes after 2 in the oil and gas industry. They walka fine line attempting to impress their stock holders/investors while at the same time making a statement that needs a "fourth party" to interpret. It appears that SM is giving up more with ther northern acreage opposed to giving up a large percentage in their southern acreage which would be an encellent indication of how valuable SM thinks San Augustine is. A good MOTHERLOAD decision St. Mary!!!! Now what about the Ironosa?????
I just listened to a webcast of St. Mary at the UBS investor conference from a few days ago and they announced the carry trade partner is Encana. Deep pockets are good to have.
Alongview,
Are you under the impression that EnCana is going to actually drill any wells in the "south block" with St. Mary'? The way I understand the agreement is that St. Mary is going to do the actual drilling in the "south block".
CL, No, Encana is drilling the North and paying for St. Mary to drill the South. All 6 proposed wells will be drilled in 2010 but Tenaska(pipeline) won't be ready to take away until July or so. This should mean they will be busy in the 2nd half of 2010.
That is my understanding of the agreement also.
Thanks.
Lewis #1H location:
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Thanks! I got it.

You see the cemetery marked on the plat. That's really close to home.

Willis

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