Texon Petroleum Ltd (ASX:TXN) Update on High Productivity Olmos and Eagle Ford Wells

Brisbane, Mar 15, 2010 AEST (ABN Newswire) - Texon Petroleum Ltd (ASX:TXN) has a 70-100% WI in 4,500 acres of leases over its Leighton-Mosman-Rockingham projects, where there are two reservoir targets.

These are the "Olmos" which is the oil and gas producing reservoir in the Company's five (5) producing vertical Leighton wells and which covers 3,000-3,500 acres, and the "Eagle Ford" which has 142ft (43m) of pay in the Company's vertical Tyler Ranch #4 well (the fifth Leighton Olmos producer), and which is expected to be present over the entire 4,500 acres.

Olmos
In recent months, USA company Swift Energy has reported on three (3) of the four (4) horizontal wells drilled into the Olmos on the southern end of the AWP field which lies immediately south-east and east of Leighton and Mosman-Rockingham.

The horizontal Swift wells achieved initial production rates of 8.1 - 11.5mmcfgepd (or 1,350 - 1,900 boepd), some 10 times higher than adjacent vertical Olmos wells which had initial production rates of 0.5-0.7mmcfgepd (80-115 boepd).

In the Company's Leighton field the average initial production rate of Texon's five producing vertical wells was 433boepd.

Texon is now evaluating the use of horizontal Olmos wells to increase production at Leighton. Also, the applicability of horizontal wells at Mosman-Rockingham will be considered if the vertical Mosman-Rockingham #1 well to be drilled in the next few weeks is successful in the Olmos.

Eagle Ford

There has been an increase in Eagle Ford drilling in the vicinity of the Company's Leighton-Mosman-Rockingham leases.

Five (5) horizontal Eagle Ford wells are either drilling or have been "permitted" to drill near Leighton-Mosman-Rockingham. Three (3) by XTO Energy are located 3.8 miles to the south east of Mosman-Rockingham.

Swift's well 1.6 miles (2.5.km) south-west of Mosman-Rockingham has been drilled and awaits testing. The surface location of the fifth well (by Swift) is some 200m (600ft) south of Leighton and site preparations have begun.

On Leighton, the Tyler Ranch #4 vertical well was deepened to the Eagle Ford - intersecting 142ft (43m) of pay. Tyler Ranch #4 is located just north of the above Swift well. If the Swift wells are successful, this will enhance the likelihood of successful Eagle Ford horizontal drilling projects on the Company's Leighton-Mosman-Rockingham leases.

Other nearby Eagle Ford activity

A number of other operators have had recent successes from horizontal wells in the Eagle Ford near Leighton-Mosman-Rockingham. Initial flow rates of 1,000 boepd to 2,800 boepd from the Eagle Ford have been achieved. Texon's leases appear to be on trend with Eagle Ford wells that have flowed gas with a high condensate and oil content.

Production Potential for Texon

On the basis of the production performance of nearby wells, horizontal Olmos and Eagle Ford wells in Leighton-Mosman-Rockingham could be expected to deliver similar rates.

Olmos and Eagle Ford significance for Texon

Texon's Leighton-Mosman-Rockingham leases are located in the vicinity of recent very successful horizontal Olmos and Eagle Ford wells, and two Swift Eagle Ford wells close to these leases are about to be tested or drilled.

The Swift Olmos horizontal wells indicate the potential outcomes from successful horizontal Olmos wells at Leighton-Mosman-Rockingham. Swift Eagle Ford success near Leighton-Mosman-Rockingham will further enhance the value of these leases. The Company is actively investigating the drilling of Olmos and Eagle Ford horizontal wells in Leighton this year.

Please refer to our Quarterly Report dated 29 January 2010, our announcement of 25 November 2009 on the results of Tyler Ranch #4, and Texon's website for all other recent announcements www.texonpetroleum.com.au

Oil and gas futures Prices (Source: NYMEX April 2010 contracts)

Oil: US$ 81.07/bbl
Gas: US$ 4.38/mmbtu

Contact

Dr. John Armstrong Chairman Brisbane: TEL: +61-7-3211-1122 Or Mr. David Mason Chief Executive Officer Brisbane: TEL: +61-7-3211-1122 Houston: TEL: +1-281-419-4976 (Houston is 16 hours behind Aust. Eastern Standard time)