Mainland Resources Inc., Houston, (OTCBB: MNLU) has closed its joint-development venture in the Haynesville shale on Mainland’s properties in De Soto Parish, Louisiana, with Petrohawk Energy Corp., Houston (NYSE: HK).

Mainland holds interest in approximately 2,695 net acres in East Holly Field in northwestern Louisiana. Petrohawk will pay 100% of the costs of development for the first well drilled below the Cotton Valley formation, including drilling, completing and fracture stimulating, as well as costs up to and including pipeline connection.

Petrohawk will also pay 80% of all costs of the second well drilled on the leases below the base of the Cotton Valley with Mainland covering the rest of costs. For the third and all future wells, Petrohawk will pay 60% and Mainland will pay 40%.

Mainland transferred 60% of its De Soto Parish leases to Petrohawk at closing, but only as the leases relate to all depths below the base of the Cotton Valley formation, and specifically the Haynesville shale. Petrohawk agrees to gather and market Mainland's production from above the base of the formation. Petrohawk will be operator.

Mainland president Mike Newport says, “This is a great day for Mainland Resources. With Petrohawk fully on board, we are ready to move ahead with drilling our Haynesville shale leases immediately.”

The effective date is Aug. 4. The Griffith Well No. 1-H is currently on Petrohawk's rig schedule to spud in September.  ST