Alto will earn the 12.5% interest in the 18 land sections covering 3000 acres (1214 hectares), in addition to the right to participate in a neighbouring 3178 acres of land, by funding part of a 24 square mile (61 square kilometre) 3D seismic survey currently underway over the Foothills area.

The company told the Australian Stock Exchange this morning that the seismic survey is expected to identify about 22 locations for drilling over the next three years, in which Alto will have a 6.5% interest.

The acquisition includes three existing wells that are currently producing 650 million cubic feet of gas per day. After some evaluation, Alto said it has determined that the three wells were not fully fracture stimulated and that offset wells would perform considerably better. Alto has also determined the 3D seismic will allow much more precise locations to be drilled to optimise flow rates and reserves.

Alto said BP, which has experience in adjacent acreage, was able to use 3D seismic to pick the sweet spot drilling locations with multiple potential horizons, which are the Brazil, Spiro, Red Oak, Wapanucka, Cromwell, Woodford Shale, Hunton and Viola formations.

Meanwhile, the company has appointed James Trimble as its new managing director and chief executive, to be based in Houston. For more information see today’s Personnel .