South Texas Oil was formed for the purpose of development and operation of oil properties with proven reserves. The Company’s strategy is to focus in domestic areas where major oil and gas producing companies have reduced their exploration efforts to move offshore and overseas in search of the larger reserves. South Texas Oil’s initial development strategy has been to acquire such proven fields and attempt to increase production and the exploration of other proven formations in the same fields.
South Texas Oil’s primary operational strategy includes the operation of its own projects, giving it substantial control over drilling and production costs.
The Company plans its future growth through a balance of acquisition of working interests in existing wells and leases, increased production on current leases and new drilling on current leases in accordance with new State of Texas guidelines of one (1) well per ten (10) acres, as opposed to the previous ratio of one (1) well per twenty (20) acres. This latter strategy of in-fill drilling affords the most potential for the Company. The new guidelines will allow us to place new wells between existing wells that have previously produced or are currently producing oil.
The Company serves as operator with respect to these properties acquired pursuant to association contracts in which the Company obtains a controlling interest or holds the largest ownership interest. It is anticipated that the Company will also participate in the development of properties operated by third parties and in some cases may delegate operations to a third party.
AUSTIN, Texas, Feb. 19 /PRNewswire-FirstCall/ -- South Texas Oil Company (Nasdaq: STXX) today announced that it has concluded the signing of a definitive gathering, processing and marketing contract for its Bastrop Field natural gas volumes. The contract is in place with a natural gas pipeline subsidiary of DCP Midstream, LP transmission company and allows for the first time for sales of the Company's natural gas in Bastrop. At approximately 1,500 BTU/cf, Bastrop Field associated gas is high-BTU and liquids-rich, allowing for further revenue by stripping the liquids from the natural gas.
South Texas Oil begins to sell initial volumes of 150 thousand cubic feet per day (Mcf/d) of natural gas to 200 Mcf/d prior to July 31, 2008, according to the agreement. As part of the contract terms, South Texas Oil Company is responsible for $186,000 of capital investment in the project, for which it will receive a repayment over time if 220,000 Mcf of gas is produced within two years of first sales at $0.25/Mcf. There are no minimum volume commitments and as gas volumes increase, the infrastructure will be improved to meet the field's throughput requirements.
the float is supposed to be only approx. 8,000,000
until sept. there was 1 producing well , from sept.-oct. there is an additional 5 wells producing