Terrace Energy Corp. has reached an agreement to develop significant new acreage in Zavalla and Dimmit counties on trend with recent successful wells in the emerging Buda Limestone formation in South Texas.
The company entered into an agreement Feb. 24 to acquire a 75% working interest and a 56.25% net revenue interest in several leases that cover 10,000 gross (6,700 net) mineral acres, by drilling a series of wells. Terrace Energy has now reached an agreement to develop the remaining 3,300 net mineral acres on the same terms and conditions as the farm-in agreement. With this agreement, the company now has the right to test and develop the Buda Limestone over 10,000 net mineral acres.
The project acreage is located in the core of the Eagle Ford trend in South Texas and is in close proximity to a number of prolific horizontal wells drilled into the naturally fractured Buda Limestone, including the publicized Hughes Heitz 302 3H, which produced over 250,000 barrels of light sweet crude oil in its first 18 months of reported production, according to the Texas Railroad Commission.