I will make it to Texas when I feel more confident about TECO's ability to execute and produce oil.
As announced on August 16, 2013 by the Company, the Company has sold a large portion of its marginal well assets in Texas to Heritage Oil and Gas for $550,000. This sale should not have been unexpected. On May 9, 2013, the Company announced that it had plans to no longer operate its marginal well inventory. Originally, the Company had plans to farm out the operations to existing operators. After a thorough review, it was determined that marginal well revenues would not have been worth the costs of operations.
While more information will be available in early September with the acquisition of the Stockton #1, this sale is a great benefit for the Company and for its shareholders. By liquidating these lease assets, the Company:
- Reduces operating costs
- Improves operating efficiency
- Decreases Company debt
- Improves TRRC compliance records through the elimination of problematic wells
- Provides an immediate capital injection for new drills in Tuscola, Texas
- Allows the Company to target specific development projects with safe ROI potentials over the next one to two years
Each one of these benefits will be explained in detail with the release of the Company’s investor information packet early next month. The only real loss through this sale is the potential production on the sold leases. However, as explained in the press release, these leases would have likely not have provided substantial revenues unless the Company acquired a large amount of additional marginal wells.
Contrary to some of the concerns by Shareholders, the Company is still in business and maintains, or will have, operations on several leases in Texas, including the Mitchell, Stockton, Standard, Murl/Stroebel, Lakeshore and Madeley leases.
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