Below is a snippet from Cotton Valley Resources Corp 1999 Annual...

Below is a snippet from Cotton Valley Resources Corp 1999 Annual Report.

The Cheneyboro field is productive in the cotton valley limestone formation at a vertical depth of approx 9500ft.

Field development continued following the initial discovery in 1978 into the early 80s.Between 1978 and 1987,marginal wells were drilled defining the limits of the field.

Approx 30 interior additional vertical wells in the field produced approx 2.7m bls oil,representing avg of 90,000 bls per well.

Some of the better wells produced over 200,000 bls oil per well,indicating better drainage where the wells penetrated the fracture system.

In 1987,the Tarrant County Water Authority expropriated approx 12000 acres of this field.Producing wells were plugged and abandoned to permit construction of the Richland/Chambers Creek Reservoir,a water supply project for Tarrant County and the city of Fort Worth.

The cotton valley lime at Cheneyboro is highly fractured.
The primary objective reservoir rock is an oolitic carbonate grainstone of Jurrasic age that was deposited on a Paleozoic shelf break.Subsequent pullout of the deeper Louann salt caused extensive fracturing.

The salt withdrawl left the residual field structure as a simple regional dip.Hydrocarbon trapping occurs as a result of the high degree of fracture density bounded by areas of non permeability.Core and log analysis indicate the presence of 2.5-4.5% oil saturated matrix porosity in the field.
Vertical wells in this reservoir produce 42 degree API oil.

Horizontal drilling techniques will lead to higher initial rates and better recovery efficiencies than those experienced in the original vertical wells.

Since much of the field is under water directional drilling from the shore line is anticipated.

I believe the market has completely mis-judged the probability of success in this play,and hence the share price.

All the best.