USA
In 2006, we incorporated a wholly owned subsidiary, Caithness Oil & Gas Inc., in Delaware, USA to drill and develop low risk acreage in the USA. The company is headquartered in Oklahoma City, Oklahoma and operates through a branch in Texas. It holds acreage in the oil window of the Barnett shale play in the Fort Worth basin of North Texas.
The Barnett shale contains substantial quantities of gas and oil, however it is impermeable. Recent technical breakthroughs in completion technology mean that wells drilled with up to 5,000 foot horizontal sections can now produce significant volumes of gas. In the northern part of the basin wells produce oil and condensate as well as gas. The shale is essentially continuous over large areas and the drilling success rate is very high.
In 2008 we formed a joint venture with Cohort Energy Company, a wholly owned subsidiary of J-W Operating Company. Caithness Oil & Gas has a 40% interest in the joint venture. Cohort Energy has 60% and is the Operator. The joint venture has acquired leases over 20,464 acres, equivalent to 8,139 acres net to the 40% interest of Caithness Oil & Gas.
We plan an intensive drilling campaign to develop these leases and establish significant oil and gas production.
