Blugrass Energy, Inc. and Quad Energy Corp Execute LOI to Acquire 60% Working Interest in Blugrass Energy Inc.'s Eddy County Oil and Gas Properties
Dec. 7, 2010 (Marketwire) --
CALGARY, AB -- (Marketwire) -- 12/07/10 -- Blugrass Energy, Inc. (OTCBB: BLUG) and Quad Energy Corp have entered into a letter of intent to acquire a 60% working interest in Blugrass Energy Inc's Cave Pool Unit oil and gas properties. The working interest of Blugrass Energy's properties covers approximately 2800 acres, located within Eddy County, NM. Currently there are 32 wells, which could be re-worked and brought back potentially to producing status. Additionally, there are over 100 possible new drilling locations based upon 20 acre spacing. Water disposal would be handled via the Cave Pool Unit's injection well which decreases water hauling costs thus increasing the economics of the Cave Pool Unit.
The Cave Pool Unit is located within the Artesia Vacuum Trend, more specifically within the Grayburg Jackson Pool. The Artesia Vacuum Trend contains thirteen reservoirs with more than 1 MMBO historic cumulative production. Cumulative production from these 13 reservoirs was 796 MMBO as of 2000. Depths to the top of reservoirs range from 1290 to 4700 ft. This is a mature field, especially within the highly productive San Andres carbonates. Lower permeability in the Grayburg sandstones, in the Grayburg Jackson reservoir during the mid-1990's, has been successful to the point of reversing production decline and is a major focus of current and future development.
Under the terms of the LOI Quad Energy would pay up to $500,000 for Blugrass' 60% working interest in the Cave Pool Unit.
The Quad Energy is undertaking due diligence and will announce the signing of a definitive agreement in the event that one is signed.
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About Blugrass:
Blugrass Energy Inc. is a development stage oil and gas development and exploration company based in the United States that is traded on the Over the Counter Bulletin Board under the Symbol BLUG. The goal of BLUG is to grow through internally generated and developed prospects, participation with industry partners in oil and gas exploration and in targeted joint ventures.
Contact:
Blugrass Energy Inc.
Tony Collins
1-877-511-0110
Source: Marketwire (December 7, 2010 - 4:02 PM EST)
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