Coleman County, Texas – Three well rework/recompletion project:
In October, 2014 the Company entered into an agreement to acquire a 75% working interest (56.25% Net Revenue Interest) in the J.E. Richey lease. The J.E Richey lease is located in a very prolific multiple pay area originally discovered by ARCO in the early 1980’s. This lease area has six known productive formations within the immediate area. This lease offers a conservative approach to building oil and gas production through re-working and re- completing existing wells coupled with spacing allowable for new drilling of 2 or more wells.
The existing three wells on the lease are fully equipped with downhole pumps, rods, tubing, pump jacks, well head and surface equipment including flow lines, production tanks, meter connections and gas gathering pipelines of particular interest on this lease is the Concho Richey #1 well which is located due west of the Olympia Hale #1 well that has produced more than 65,000 BBLS and over 160 MMCFG from the Gray formation. The Gray formation has not been opened in the Concho Richey well and its log characteristics are very similar to those of the Olympia Hale well.
In March, 2015 the Company entered into an agreement to sell a 37.5% (28.125% NRI) working interest in the 3 wells on the lease for $180,000. The funds are to be used towards the turnkey costs of placing the three wells into production
In May 2015 the Company commenced reworking the J. E. Richey #1 & #3 wells. The following photos were taken of the work being conducted on the J.E. Richey #1 & 3 wells.
The reworking of the J.E. Richey #1 & 3 wells has been completed and these wells are set for production. Work on the third well, the Concho Richey #1 is scheduled for the first week of June, 2015. Upon completion of the work on the Concho Richey #1, the company will start producing these three oil and gas wells into the production tanks and gas gathering pipelines on the lease.
In July, 2014 the Company acquired a 75% working interest (52.5% Net Revenue Interest) in the Isenhower lease. The Isenhower lease has three fully equipped wells completed in the Cook Sandstone at approximately 500 feet. The lease also has one approved water injection well and eight (8) potential undrilled locations. Recent activity on the adjoining leases has renewed the interest in placing the wells back into production. The offsetting leases on the north and west sides of the lease have had 25 new wells drilled on it within the past year to complement the existing wells on those leases. This activity on the adjoining leases is part of a petroleum engineered re-pressuring water-flood program. The target for the re-pressuring water-flood program is the Cook Sandstone which is noted to have excellent porosity and permeability. Our lease is poised in an excellent position to receive benefit from the re-pressuring of the Cook Sandstone by theoperator on the adjoining leases to the north and west sides of our leased acreage. This re-pressuring may significantly improve the production rates on the lease which could have a dramatic effect on the revenues generated from the existing wells and any new wells drilled on our lease. The Company’s plan is to re-work all three of the wells to place them back into production and drill new wells to fully develop the acreage.
Callahan County, Texas – Mississippi Reef Project:
In July, 2014 the Company entered into an agreement to acquire a 60% working interest, (45% net Revenue Interest) in the J. Morgan lease. The J. Morgan lease is located in an area with multiple formations that are known to be oil & gas productive. Of particular interest are the recent Mississippi Reef discoveries in the area. A number of notable Mississippi Reef discoveries have been located using 2D seismic in this area. One of these Mississippi Reef discoveries has produced over 128,000 barrels of oil and 140 MMCF of natural gas in less than 10 years. A 2D seismic survey has been conducted covering the leased acreage reflecting an anomaly of interest.
While the Mississippi Reef is the primary target there are four other productive formations known to produce in the immediate area of the acreage and the possibility of three other formations that are also known to produce in the area. Of particular interest is the Cross Cut formation which was productive on the east side of the lease and could have potential on other parts of the acreage.