Texas Leases
In December we acquired 125 acres of property in Throckmorton County, Texas (the Bailes lease) on which the discovery well was located. We have the exclusive opportunity to lease approximately 700 acres of additional land contiguous to our lease. There are three mature wells on this lease, and each produced more than 100 barrels per day for several years. They were abandoned for economic reasons in the mid-1980s, although each was producing approximately 30 barrels per day (which is consistent with the normal Texas decline curve for this type of formation). Management's experienced opinion is that re-pressurization of this geological formation has occurred after more than 20 years of no production or new wells on this lease. We have detailed drilling records and well logs of the three wells that show three to four producible pay zones.
3 wells times 30bopd times 30 days times $70bbl is $189,000 per month minimum. With Craig's expertise and any amount of repressurization the numbers could get even better.
bopd monthly revenue annual revenue
30 189,000 2.27M
40 252,000 3.02M
50 325,000 3.78M
60 378,000 4.54M
Once they get in there and see what they can do, it could be even better.
The minimum we should expect is 30 bopd
AI
