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There are three project areas within the Company's portfolio, including; 1) Niobrara, 2) Kansas and 3) Oklahoma. The Company holds a 50% working interest in the Niobrara and Oklahoma projects, and a 75% working interest in the Kansas project. Metro Energy Group holds the remaining working interest. Metro Energy is located in Tulsa, Oklahoma and is also the operator of all projects.

The Niobrara project covers 4,490 gross acres (2245 net acres) in Cheyenne County, Kansas and is primarily focussed on the development of shallow Niobrara chalk gas. The license area includes 20 drilled well bores in the Niobrara formation with over half of the wells going to sales as of April 2008. The remaining wells will be on line in May 2008; with total projected production from the 20 wells at 1,000 mcfd. It is estimated that 40 additional drill wells will be completed by year end 2009, with an additional 56 wells to be drilled in following years. Due to the shallow nature of these wells (1500 ft) they can be drilled and completed in less than one week at very low cost.

The Kansas project covers over 112,000 gross acres (84,000 net acres) in eleven counties in south central Kansas. The majority of the acreage is in the oil rich areas of Barber, Butler and Cowley counties. The area has a prolific oil and gas production history and many operating advantages, including extensive infrastructure and low cost drilling. The area has lacked the application of state-of-the-art exploration techniques, which provides significant upside potential. The Company has shot state of the art 3D seismic in two areas of Kansas (Rock and Ayres), with two more surveys in progress. The Rock 3D survey has generated several prospects, where a four well drilling programme has been initiated. The initial well, the Rock 1-5, was spudded April 29, 2008 and is targeting oil production from the Arbuckle formation at 3500 feet. A rig has been contracted for a continuous drilling programme across the Rock 3D and then on to the Ayres 3D.

Importantly, the Kansas project also houses the highly prospective Chattanooga Shale formation, which has been successfully drilled across state lines in Oklahoma (where it is known as Woodford shale). With a land position of over 112,000 acres, Irvine has first mover-advantage in an area that has significant development potential. Shale gas, due to the development of new extraction techniques, is the USA's fastest growing onshore energy sector.

The Oklahoma project covers over 50,000 gross acres (25,000 net acres) in Okfuskee, Okmulgee, and McIntosh and Hughes counties. This project has significant potential in conventional oil and gas, as well as Woodford and Caney shale gas and coal bed methane (CBM). The Company purchased this property in January 2008, which included over 20 producing wellbores and fifty-four square miles of 3D seismic. Production net to the Company at time of purchase was over 600 MCFDE. Since then, four additional conventional gas wells have been drilled.

Currently the Company is stepping up activity in the Caney and Woodford shale, with their first vertical new well currently being completed. The Company's first horizontal well is planned to spud in May 2008. A large drilling inventory is also being developed for both the Caney and Woodford shale. Successful development of the Caney and Woodford shale could be huge, with as many as 400 - 800 locations possible. Netherland, Sewell and Associates have assigned a best case contingent resource estimate net recoverable to the Company of 238 billion cubic feet (BCF) of gas.

Current plans also include drilling and completing both vertical and horizontal Hartshorne coal bed methane (CBM) wells in Q3 2008. Assessment of the CBM resource and value is in progress.

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Shale Gas

Shale gas is the fastest growing energy sector in onshore USA. The relatively recent focus on shale gas development goes back 20 years, and is highlighted by the technical understanding gained, and success achieved, in the Barnett shale in Fort Worth Basin, Texas. The Barnett is now the largest producing gas field in the USA. (Read More)