Texon Petroleum Limited (ASX:TXN) Important New Resource With 197 Feet Of Potential Pay

Brisbane, Nov 25, 2009 AEST (ABN Newswire) - Texon Petroleum Limited's (ASX:TXN) fifth Leighton Olmos production well was deepened below the Olmos to investigate the Eagle Ford Shale. The well had oil and gas shows during drilling the Eagle Ford and there were also oil and gas shows in the Buda and Edwards Limestone (below the Eagle Ford).

At Texon's current working interests in Leighton, Mosman and Rockingham, the logged pay represents a resource potential of some 50 mmboe to the Company.

197 Feet of Potential Pay

Analysis of the electric logs from the well by Oil & Gas Evaluations and Consulting, LLC (Olmos) and NuTech Energy Alliance (Eagle Ford / Buda / Edwards) indicates 197 feet of pay in the well.

Oil and Gas Pay (Feet)Olmos              28Eagle Ford        142Buda / Edwards     27                  197

The Olmos reservoir in Tyler Ranch #4 has been placed on production - refer to the Company's announcement of 18 November 2009.

Location

The location of Texon's Leighton / Mosman / Rockingham holdings is shown on the attached map. The closest two Petrohawk Eagle Ford production wells to the south west averaged an initial production rate of 4.2 mmcfgpd and 310 bopd (i.e. an average of 75 barrels of oil per million cubic feet of gas).

Pioneer's recent Eagle Ford well to the east flowed at 8.3mmcfgpd and 500 bopd (i.e. an average of 60 barrels of oil per million cubic feet of gas). Average initial rate of Eagle Ford wells in the Sugarkane field to the north east was 2.1 mmcfgpd and 347 bopd (i.e. an average 160 barrels of oil per million cubic feet of gas). The recent ConocoPhillips Bordovsky #1 flowed at an initial rate of 1,500 bopd and 4mmcfgpd (375 bbls per million cubic feet of gas).

Rock Characteristics

The electric log response of the Eagle Ford in Tyler Ranch #4 is reported by NuTech to be similar to the liquids rich Eagle Ford which is being developed in the Hawkville area. NuTech also reports that the log calculated porosities and permeabilities of the Eagle Ford in Tyler Ranch #4 are in line with better quality Eagle Ford wells. Eagle Ford porosity in Tyler Ranch #4 averages 12% but ranges up to 18%.

Log derived permeabilities are calculated to be well above the threshold required for Eagle Ford productivity. Total organic carbon ("TOC") in the Eagle Ford in Tyler Ranch #4 averages 2.2% with some intervals up to 6%. Log derived gas saturation averages 72% with some intervals being 90%.

Approximately 75% of the rock is Limestone suggesting that the Eagle Ford with the above properties in Tyler Ranch #4 should respond well to production enhancing fracture stimulation.

Potential Resource Volume - Eagle Ford

Using the NuTech analysis and an average 75 barrels of oil per million cubic feet of gas, the 142 feet of Eagle Ford could contain 193 bcfe of oil and gas in place per section (640 acres). USA company, Petrohawk, which is actively drilling and producing the Eagle Ford, indicates an expected recovery of 21-24% so that Texon's 4,549 acres of Leighton, Mosman and Rockingham leases (where on the basis of seismic data, the Eagle Ford Shale is expected to be present) are estimated to contain a gross recoverable contingent resource of 310 bcfe (51.5 mmboe).

At Texon's current working interests in Leighton, Mosman and Rockingham (1), this represents a resource potential of 292 bcfe (48.6 mmboe) to the Company in its Leighton, Mosman and Rockingham leases combined.

These volumes don't include the potential gas and oil in the Buda and Edwards Limestones.

Mosman and Rockingham

The first vertical wells each of Mosman and Rockingham are expected to be drilled in the second quarter of next year and each well will be deepened through the Eagle Ford to confirm the Eagle Ford's presence at these locations.

Eagle Ford Well

After the Mosman and Rockingham vertical wells have been drilled, a location will be selected for a horizontal well into the Eagle Ford to be drilled, fracture stimulated, and tested, possibly in the third quarter of 2010.

Texon's CEO David Mason said "The Eagle Ford Shale has captured the industry's attention in Texas and proving the presence of high quality Eagle Ford Shale in Tyler Ranch #4, has significantly enhanced the value of the Company's Leighton, Mosman and Rockingham lease holdings."

(1) Texon has 70% WI in 830 acres at Leighton and 100% WI in the other 3,720 acres on Leighton, Mosman and Rockingham and an overall 75% NRI.

Contact

Dr John Armstrong Chairman Brisbane: +61-7-3211-1122 Mr David Mason Chief Executive Officer Brisbane: +61-7-3211-1122 Houston: +1-281-419-4976 (Houston is 15 hours behind Aust Eastern Standard time)