Titan Oil and Gas Has Acquired a Producing Oil and Gas Project with 61 Wells in Pennsylvania Titan Oil and Gas Acquires Producing Crows Run Oil and Gas Project in Beaver County Pennsylvania Jul 9, 2008 8:00:00 AM Copyright Business Wire 2008
AUSTIN, Texas--(BUSINESS WIRE)--
Titan Oil and Gas Inc. (Pink Sheets:TNOG) has made the first of its planned acquisitions with the Crows Run Project (CRP) in Western Pennsylvania. CRP represents a significant turning point for the company as it can now claim 27 wells in production as it moves to maintain and rework all 61 wells included in the deal.
Oil production for the previous three years is as follows; 2005 - 846 bbl 2006 - 1,172 bbl 2007 - 654 bbl
The total three-year production was 2,672 bbl, or an average yearly production of 890 bbl. Additionally, the connection of an approximate 300 foot pipeline to Columbia Gas of Pennsylvania will produce over 2,000 MMBTU per month, in its current form, based on 2003 production levels. Included in the acquisition is $55,000 worth ($500,000 initial value) of equipment, a CD used to secure the blanket bond valued at $28,000, a contract to sell oil to Ergon (http://www.ergon.com/main.html) and a Pennsylvania EPA license for the project.
The full technical report is available on the website at:
The well sites are located in areas of proven production in Western Pennsylvania. CRP's original estimated reserves were calculated in excess of 13 million bbls in the eighties (see technical report), with very little production to reduce this figure in the interim. The best well produces 5 bbls of oil per day while others produce around 1-2 bbls of oil per week. Since being drilled in the '80s, the wells have had little in the way of maintenance (average rework cost is $5,000-7,000 per well). These production numbers will dramatically improve by simply removing paraffin build up and updating pumpjacks.
Other improvements will be made with the application of modern stimulation and enhancement techniques that compound production increases. Titan estimates that with simple maintenance, wells producing 1-2 bbls a week would move to that same figure per day as well as bringing online many that have been choked into nonproduction. Titan management looks at this as a first step in its acquisition plan that will include the use of a special preferred share class, which will be presented and described in the business plan as well as at the annual general meeting to gain stockholder approval in the coming months.
According to Titan Oil and Gas President Brandon Toth, "What we have with Crows Run is a project that can bring us current production but promises something much more enduring. This is really a low risk endeavor with current producing wells that have never been fully exploited. There are significant reserves of oil that can be accessed with simple maintenance. We will also be working with a technology partner that can enhance these wells for much lower prices than were paid just five years ago using a directional water jet that breaks right through surrounding formations. This technology lessens the impact on the environment."
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