2011-03-09-2011-03-07

To buy 23% WI before payout (17.25% after) in 1,280 acres covering Texas State Blocks 127, south half of Block 150 & north half of Block 151.

Archer Petroleum Corp., Vancouver, B.C., (Toronto Venture: FYI) has entered a participation agreement with privately held, Houston-based Arbol Energy to acquire a working interest in a prospect held by Arbol in Matagorda Bay, Texas.

Archer has acquired a 23% working interest before payout (17.25% after payout) in 1,280 acres covering Texas State Blocks 127, the south half of Block 150 and the north half of Block 151. The assets include three existing well bores, an existing seven-mile pipeline and an onshore oil and gas handling facility.

Archer will pay 23% of lease acquisition, geological and geophysical costs ($650,000 gross, or $150,000 net) and 23% of any costs associated with re-completion of the existing well bores.

A key component of this acquisition is the existence of a fully drilled, cored, logged, cased and shut-in well bore (the 127-1) in Block 127. The 127-1 well has multiple pay zones indicated on logs and cores and is expected to be initially completed in the Bol Mex (8,560 to 8,710 feet deep) section of the Lower Frio. Internal analysis of the logs and cores of the Bol Mex zone indicate approximately 115 feet of expected oil pay. The reservoir is estimated to cover a minimum of 350 acres with potential up to 750 acres.

Completion planning has already begun with operating partner South Bay Resources, and on-site operations are expected to commence within the next two months. Costs associated with the re-entry, perforation and testing of the 127-1 well are expected to be approximately $1.2 million (approximately $276,000 net).

An additional 200 plus feet of apparent net pay are evident in the logs and cores, and upon successful completion of the Bol Mex interval the company will target these additional zones for future completions.