San Antonio TX., 12/8/2008, CanTex Energy Corporation (CTXE- PKS)

CanTex Energy Corporation Enters Exploration & Development Agreement in the West Texas Overthrust Trend.

December 8, 2008, San Antonio TX. CanTex has entered an Exploration & Development Agreement covering some 17,000 acres of prospective natural gas leasehold in the West Texas Overthrust (WTO) with Slawson Exploration, Inc., Wichita, KS, in partnership with Big Canyon Energy (BCE). The prospect is called the Big Canyon Prospect.

The Agreement covers an initial 17,151 acres to which BCE holds leases and 7,680 to which BCE holds a lease option. Beyond the lease and option coverage, the total Area Of Mutual Interest (AMI) between the parties covers some 89,929 acres. CanTex has the right to participate throughout the AMI based upon CanTex payment of future pro rata drilling and any additional lease/option costs.

Slawson will operate the project, currently holding 45% working interest. BCE et al retains a 39.375% WI, CanTex holding the remaining 15.625% WI. Provisions within the Agreement include fully executed pipeline rights-of-way (13.5 miles) for tie-ins to the natural gas collection, processing and distribution network in the area.

The parties are now reviewing the historical seismic and related data for selection of the first two wildcat drill sites. The parties may propose additional participation by other major and independent operators within the trend.

About the West Texas (Ouachita) Thrust (WTO) and Big Canyon Prospect

The prospect is located in Terrell County, TX, along the Ouachita Overthrust, a geologic trend that extends from Texas east/northeast through Oklahoma and Arkansas, where it is prolific. The WTO has been in production since the 1970’s as a marginal play, only recently becoming one of North America’s most prolific new natural gas trends as a result of seismic imaging and drilling technology improvements.

CanTex earned the right to participate in the Big Canyon Prospect by funding and deploying a state-of-the-art seismic study of the prospect area in 2004-2005. Seismic interpretation of the new data suggests the presence of at least 5 large imbricate fault closures, covering perhaps more than 10 square miles, highly similar to the character of Pinon Field in Pecos County, TX, approximately 40 miles northwest of and on-trend with Big Canyon Prospect. Sandridge Energy Inc., (NYSE: SD) operates Pinon Field, and reports an estimated ultimate recovery (EUR) within Pinon Field of over 5 trillion cubic feet (TCF) natural gas.

Big Canyon Prospect is further set-up by the presence of potentially commercial quantities of natural gas as close as approximately 5 miles from the leasehold, and within the AMI, a discovery well drilled in 2004 by Sandridge’s predecessor Riata Energy, which flowed almost 2 million cubic feet per day on a 16/64 production choke. This “show” is believed to have occurred within the objective thrusted Pinon Field-type Caballos reservoirs.

Pending working interest decisions and actions, the Company expects to participate in two exploratory wells, testing the presence of potentially significant reserves of natural gas on 2 of the 5 imbricate closures within the Big Canyon Prospect next year, 2009.

If you have any questions or comments regarding this article please contact Gross Capital at info_ctxe@grosscapital.com