Mainland Resources Inc. (OTCCB: MNLU) and American Exploration Corporation have entered into an amending agreement to extend the termination date of the merger agreement between the companies to May 31, 2011.
The previously announced merger agreement between Mainland and American Exploration contemplates a stock-for-stock merger between the companies, subject to approval of the shareholders of both companies. The companies have entered into the amending agreement to extend the termination date of the merger agreement to May 31, 2011, in order to allow for additional time to complete required administrative and regulatory matters related to the merger process.
Mississippi Prospect Status
Mainland and its working interest partners control in excess of 17,800 net acres or 28 sections on the Buena Vista prospect area on which the Burkley Phillips No. 1 well was drilled to 22,000 feet, cored and logged. Post merger, Mainland is expected to own 92% of the 28 sections in the Buena Vista prospect.
As recently announced, a leading oil and gas services provider independently assessed free gas within the reservoir. That evaluation was performed across 60 feet of section, which encompassed a 21-foot cored interval in the wellbore, targeted so that all of the new core analyses could be accurately incorporated. Free gas calculated for this section was more than one and a half times previous estimates for the same interval. If this assessment is representative of the entire interval, the gas in place in the Burkley Phillips #1 well could be in excess of 500 Bcf/section.
Louisiana Prospect Status
Mainland previously discovered and developed a Haynesville Shale play in the East Holly Field area in DeSoto Parish, Louisiana. Mainland established the field through drilling and completing five Haynesville Shale gas wells with Petrohawk Energy Corporation and subsequently sold its interest in the Haynesville Shale in a single transaction for over $28 million to Exco Operating Company (a subsidiary of Exco Resources), while retaining 100% of the shallower zones including the Hosston, Cotton Valley, and Upper Bossier formations. The company recently disclosed that Ryder Scott Company Petroleum Consultants identified net possible undeveloped reserves of 60 Bcf of gas and 226,000 barrels of condensate/oil based on SEC guidelines and pricing as of December 2010 on the retained acreage.
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