The stratigraphic and structural framework of the Cotton Valley and Smackover can be divided into distinct producing trends. Each trend has predictable producing characteristics and geographic limits.

The Cotton Valley producing trends lie in four different areas: (1) a semicircular belt of lower Cotton Valley limestone reservoirs along the west flank of the Sabine uplift covering parts of Rusk, Shelby, Smith, Upshur, and Cass Counties, Texas; (2) a northeast-trending belt of lower Cotton Valley limestone reservoirs on the west flank of the East Texas basin covering parts of Henderson, Navarro, Freestone, Limestone, and Robertson Counties, Texas; (3) an arcuate belt of "blanket" strandline sandstones in north Louisiana centering in Lincoln Parish; and (4) a broad circular area covering most of the Sabine uplift where very fine-grained upper Cotton Valley sandstones produce from a 1,400-ft (427 m) stratigraphic interval. Minor Cotton Valley sandstone production is developing on the est flank of the East Texas basin from low-permeability Bossier sandstones. Cotton Valley reservoirs are generally low-permeability (less than 1 md) and require fracing for commercial flow rates. Higher gas prices and improved fracing techniques have caused a high level of exploration for Cotton Valley reservoirs.

Smackover producing areas are in six different trends: (1) updip fault traps along the Mexia-Talco fault system; (2) salt anticlines along the flank of the salt basins; (3) basement structures updip from the salt anticline and fault system; (4) stratigraphic traps near the Arkansas-Louisiana state line downdip from the salt anticlines; (5) complex graben-fault traps associated with more intense salt features deeper within the basin; and (6) updip from the Mexia-Talco fault trend, a possible new trend opened in western Henderson County, Texas, by a recent highly significant discovery of McFarlane Oil Co.

The five producers (and no dry holes) drilled to date in the new trend show only very slight structural turnover at the Smackover level in an area of regional east dip into the basin with the possibility of minor (under 100 ft or 30 m) fault interruptions. Current interpretation is that the trap is due to a

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combination of slight structural closure and updip porosity pinch-out. Updip oil migration may have occurred through "breaks" in the Mexia-Talco fault system with oil entrapment in numerous updip small fault closures and possible porosity pinch-outs. Well control is inadequate for further definition of this trend. Flow rates over 1,000 BOPD have been reported in several of McFarlane's wells. Producing characteristics appear to be excellent with 48° gravity oil and under 1,100:1 GOR. Hydrogen sulfide is reported at 2% or under. In view of its possibly large area and shallow depth (9,000 ft or 2,743 m)--and a price of $40/bbl--this field could prove to be the most significant oil field discovered in east Texas in 20 years.

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