The Company acquired the shallow rights to 2,336 acres of oil and gas leases in Panola County east Texas by the acquisition of a 100% working interest in the NE Bethany Waterflood Unit #3, a shut-in oil field. Golden Gate's rights extend from the surface to approximately 3,990 feet. Wells drilled on adjacent leases show the presence of up to four gas zones and three oil zones within that interval. All of the existing sixteen wells within the leases were drilled for the purpose of producing from the oil zones and therefore have not had any significant impact on potential reserves within the gas zones.
Documents filed with the US Securities commission indicate that there remain proven undeveloped reserves of 4.5 bcf of gas and 744,888 barrels of oil (net to Golden Gate) within the leases. That equates to an approximate acquisition cost of US 23 cents per barrel of oil equivalent.
The leases which are located approximately 35 kilometers South of Shreveport adjacent to the Texas/Louisiana border.
Because of existing infrastructure in the area the Bethany wells are comparatively cheap to drill and complete with short lead times to production. These factors result in attractive economics, especially in today's environment of high gas and oil prices.
Since inception the Company has drilled three exploration wells. All three of the wells encountered producible gas and were completed and tied into the North East Texas gas grid. The first well Syd -1A subsequently depleted its reserves.