NEWS
CAVU Resources, Inc. Sells 50% of Its Garvin County Field and Increases Its Field Storage Capacity by 400%
CAVU Resources, Inc. ("CAVU") (PINKSHEETS: CAVR) announced today that the Company has sold 50% of its Garvin County Oil Field in a transaction that will bring $1.35 million dollars into the company. The agreement called for the payment of the balance of the outstanding secured debt of $250,000 and the reimbursement of $1.1 million dollars invested in the project to date. The private investment group will invest on a 50/50 basis on all future cost and development.
In the acquisition, CAVU and its new investors purchased a total of 220 acre lease in Garvin County, Oklahoma that has two producing wells and two that are in the final stages of completion. The purchase also included over 6 acres of land and home that will be converted into the 24-7 operational facility for its wholly owned subsidiary FILO Quip Resources, LLC, ("FILO"). FILO is the operator and along with the planned rework program is increasing the storage capacity by 400%. The company has purchased seven new storage tanks, tubing and high volume submersible and disposal pumps to complete three additional wells.
The two producing wells were originally drilled in the 1950s to the Bromide formation at about 3,000 feet. The wells were re-entered during the 1990s when companies in the area began testing deeper reservoirs. The wells were then deepened to the Oil Creek formation at about 3,800 feet. The two wells are currently producing a combined 35 to 40 barrels of oil per day (BOPD).
The operator FILO has already re-entered two of the wells on the lease and plans to re-enter five additional wells and rework them with the possibility of deepening them to the two Oil Creek formations between 3,800 and about 4,000 feet. There is one other significant producing zone the McLish Creek formation that will also be tested. After analyzing the data of the two producers and other wells contiguous to the lease, CAVU anticipates each of the seven wells could possibly have average initial production rates of between 30 to 50 BOPD.
"Based upon results in this field, we are very confident that we should hit our targets for the seven wells, which would put our combined production at between 270-400 BOPD, this is part of an old Marathon Oil water flood, where over 4 million of barrels of oil were recovered. We feel this field and surrounding acreage has great potential, using new technology and drilling offset wells that could provide increased reserves and long term cash flow. We have targeted addition lease opportunities in the surrounding area with the potential to rework existing wells along with potential new development and drilling programs that could quickly add to the existing project, duplicating our projected production," said William Robinson, President of CAVU Resources, Inc.
