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Permalink Reply by The_Baron on August 18, 2010 at 9:41

what is your source?

Please post more info.

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Permalink Reply by VSC DeSoto South on August 18, 2010 at 11:05

http://finance.yahoo.com/news/Mexco-Energy-Corporation-prnews-29230...


Mexco Energy Corporation Announces Acquisition

Press Release Source: Mexco Energy Corporation On Tuesday August 17, 2010, 6:23 pm EDT

MIDLAND, Texas, Aug. 17 /PRNewswire-FirstCall/ -- Mexco Energy Corporation (Amex:MXC.a - News) ("Mexco" or the "Company") announced the purchase of overriding royalty interests in 5,120 gross acres covering eight sections in the Haynesville trend area of DeSoto Parish, Louisiana, for an approximate purchase price of $1.65 million, prior to closing adjustments. Mexco paid $1.46 million in cash and 26,833 shares of its Common Stock. The Company funded the cash portion of the purchase from working capital and primarily from its $5.0 million credit facility. The stock was issued from Mexco's treasury shares.

This acreage currently contains five (5) horizontal wells producing from the Haynesville Shale formation and operated by Petrohawk Operating Company which will operate six of the eight sections. The two remaining sections will be operated by Chesapeake Energy. The Company owns average overriding royalty interests of approximately .28%.

These 5,120 acres contain an additional 59 potential drill sites in the Haynesville Shale. Other wells drilled in the Haynesville area show the presence of at least two (2) other potential producing zones, the Bossier and Cotton Valley, which are held by production and available for development should conditions warrant. Hundreds of Haynesville, hundreds of Cotton Valley and several dozen Bossier Shale wells are currently producing in the Haynesville trend area. The development of these royalties is free to Mexco of expenses for drilling, development and operations.

The Haynesville area has been estimated to become the largest gas resource in the United States and the fourth largest in the world subject to realization of technical estimates, according to World Oil in its June 2010 edition. World Oil recognizes DeSoto Parish as one of the top six (6) parishes of Louisiana where the most productive Haynesville wells are located.

"This acquisition represents a significant addition of the natural gas reserves for Mexco and future development potential," said Nicholas C. Taylor, President and CEO of Mexco.

Mexco Energy Corporation, a Colorado corporation, is an independent oil and gas company located in Midland, Texas engaged in the acquisition, exploration and development of oil and gas properties. For more information on Mexco Energy Corporation, go to www.mexcoenergy.com.

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Permalink Reply by Les Bamburg on August 18, 2010 at 11:53

VSC, the seller was probably not Petrohawk but rather another party that had the overriding royalty interests.

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Permalink Reply by Spring Branch,mineral owner on August 18, 2010 at 12:27

That is 28 hundredths of one per cent...........not 28 percent!!!! Isn't that $115,000 per acre for 100% royalty or am I just dumb? You can bet the seller was not Petrohawk any more than it was Chesapeake.

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Permalink Reply by VSC DeSoto South on August 18, 2010 at 14:13

That sounds like a more reasonable number.
I stand corrected.
I hate decimals!

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Permalink Reply by ledlights on August 18, 2010 at 15:25

I wonder whether you couldn't make more money on that 1.65 million in other investments unless gas averages a fair amount more than 5$ per MCF in the future. It is not at all a clear slam dunk to me. Isn't it going to be a long time before that area is fully drilled (for any and all pay zones) unless gas prices find a way to sustain better levels?

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