Management discussion of operations.
Highlights
Beech Creek Gas Unit (known as “Beech Creek Field”) Acquisition in April 2010
On April 5th, 2010, the Company purchased different working interests in the Beech Creek Gas Unit located in Hardin County, Texas for $740,798 in cash. These property interests were previously owned by a group of five different working interest owners. The Gas Unit includes two (2) active gas wells, each included in a 44 acre oil unit located in Hardin County, Texas. A 30.0587% working interest was acquired in the Beech Creek #1 well. A 24.4337% working interest was acquired in the Beech Creek #2 well. We do not operate these wells. Total revenues and lease operating expenses associated with these properties during the six months ended April 30, 2010 were $32,935 and $3,546, respectively.
J.E. Pettus Gas Unit (known as “Cabeza Creek Field”) Acquisition in November 2009
On November 9th, 2009, the Company purchased the J.E. Pettus Gas Unit located in Goliad County, Texas for $402,569 in cash. We also incurred approximately $25,000 in fees associated with the acquisition, which were expensed when incurred. These properties were previously owned by Pioneer Natural Resources USA, Inc. The Gas Unit includes four (4) active gas wells and 24 non producing gas wells located on 3,689 acres in Goliad County, Texas. The interest acquired by BSPE is 100% all right, title and interest from the surface to 8,500 feet below the surface and 10.67% below 8,500 feet. We became the operator at depths upon closing of the acquisition, which is outsourced to an unrelated third party. In connection with these outsourced services, we pay an administrative fee of $500 per gas well per month, as well as a consulting fee of $8,000 per month. Total revenues and lease operating expenses associated with these properties during the three months ended April 30, 2010 were $392,279 and $125,452, respectively. Total revenues and lease operating expenses associated with these properties during the six months ended April 30, 2010 were $461,157 and $201,310, respectively.
Access Energy
On April 30, 2010, the Company sold 441 of the 600 shares it held in Access Energy to the other stockholder of Access Energy, Mr. Reg Burden. Following the transfer, Blacksands holds 19.9% of the outstanding Access shares and Mr. Burden holds 80.1%. As consideration for the transfer, the Company is relieved of its contractual obligation to fund Access’ annual plan and budget including Access’ commitments to First Nations’ communities, and Mr. Burden’s warrants to purchase the Access Warrants would be cancelled.
This is not an offer to buy or sell securities or any kind of investment advice. Oil investment carries very high risks so do your own due diligence before and consult a licensed professional making any decisions.
