Preliminary FRMC due diligence on their acquisition of 1500 acres of prospective oil leases in Cowley County, Kansas. The G&G work has identified four exploration drilling locations on the Leases. FormCap expects that drilling will commence on the Leases in Q-1 2014.
Formcap is currently evaluating a specific block of 875 acres (from the 2400 acre total) of prospective oil leases owned by from Kerr and Keta. Furthermore FormCap has expanded the scope of its proposed lease purchase program in Cowley County, Kansas by an additional 900 acres for a total of up to 2,400 acres of prospective oil and gas exploration Leases.
The Company, its partners Kerr and Keta, technical advisors and operator will immediately map out decisions on drill site locations with an anticipated first drill during Q2-2014. "There are tremendous oil and gas opportunities to produce commercial light oil and gas in an environment of high crude oil prices and low finding and developing costs." In addition to the four drilling locations, FormCap expects to acquire a seismic program in early 2014 in concert with other explorers in the area to further delineate exploration prospects on the Leases.
There are four significant oil and gas fields in the area of the Leases, the Atlanta; Burden; Eastman and Combs Fields. These fields collectively have cumulative production of over 9 million barrels of oil.
FormCap will pay Kerr and Keta two hundred dollars ($200.00) per acre for up to 2400 acres of Leases, at total cost not to exceed four hundred eighty thousand dollars ($480,000) (the "Purchase Price") unless agreed otherwise by the Company. FormCap owns 100% of the Leases (80% net revenue to FormCap; 20% freehold royalty), and will be operator. FormCap will have the option to purchase additional leases in Cowley County from Kerr and Keta under an Area of Mutual Interest ("AMI"), the terms of which are set forth in the Agreement. FormCap is required to drill one (1) well in each of the first two (2) years of the Lease term to maintain its interest in the Leases.
FormCap will also have the option to participate in the drilling of up to six (6) exploration or development wells on lands currently owned by Keta and Kerr under terms set forth in the Agreement.
Significant quantities of oil and gas have been discovered and produced in Cowley County in recent years. The prospects for oil production are excellent with multi-zone potential for both vertical and horizontal development. In addition to the Mississippian, zones producing in this area include the Layton, Lansing-Kansas City, Bartlesville, Stalnaker and the Arbuckle. Reservoir properties are excellent with good porosity and permeability in thicker accumulations of hydrocarbons. Total depths of approximately 4,000 feet provide drilling time of approximately seven (7) days with completed wells costing about $500,000 per vertical well.
I expect a drilling program press release fairly soon, and if the settlement shares are all sold through by that time, I would expect much higher share prices.
Additional information can be found at the Company website: www.formcapcorp.com
