Revenue Generation In Texas, we have been rework
Post# of 39368
Posted On: 02/05/2013 5:11:30 PM
Revenue Generation
In Texas, we have been reworking the wells acquired during 2011, allowing additional sources of production. This process will continue through 2012 and into 2013, gradually increasing our daily oil output. During the quarter Treaty sold some of its non-producing properties in order to focus on its core leases. The work-over projects have been ongoing on our existing West Texas Leases. At the beginning of the third quarter daily production had fallen to substantially due in part to regulatory and compliance issues. Once all issues had been resolved with the Leases we were able to focus on bringing production back on to prior levels and sustained growth from that point. Today the leases in West Texas are currently producing 26 barrels per day and expected to steadily increase for the remainder of the year. (WE PRODUCED 8 BOPD IN NOVEMBER AND DECEMBER SO WHO ARE THEY LYING TOO. THATS NOT A PROJECTION. HE SAID CURRENTLY)
Current leases under production include the West Texas: Willingham, Mable Kennard, Hobbs, Compton, McComus, Loven, Shotwell, Wooldridge and Brown properties.
Drilling
West Texas
Treaty currently has hundreds of proven, undeveloped acreage in which we can drill on. Depth of the new wells will range from a shallow 550 feet to 2600 feet. Some wells will reach deeper than 4500 feet.
On November 14, 2011 Treaty acquired the Mark H. & Eula E. Wooldridge Leases, totaling 260 acres. This Lease has 3 wells currently producing 5 barrels of oil per day. Treaty has secured funding in the amount of $700,000 in order to infield drill twelve new wells to 550 feet. Drilling permits for the first 2 wells were approved on March 9, 2012. After months of delays we are expected to begin the drilling the week of November 19 , 2012 with an expected completion rate of 5-7 days per well. Once the first two wells are placed into production the remaining financing will be available and we will begin the process of permitting and drilling to remaining 10 wells in the project. We expect this project to be completed by the end of the 4 th Quarter and add an estimated 100 BOPD in production.
Treaty began the first of a 9 well drilling project in the third quarter. The first well was drilled to 1900 feet on the McComas lease. Delays on the original cement job, due to terrain issues at the surface, were corrected and the well has now been cemented and is expected to be brought into production by late November. Completion operations have begun on the McComas A #20 well in late October, bond logs on the upper section of the Flippin Lime zone were run and we perforated the pay zone intervals in the Flippen Lime. Similar wells in this formation have shown initial daily production of between 15 and 45 barrels per day. We are expecting initial production from this well in mid-November, 2012. We are in the process of permitting the next two locations and will commence drilling operations once all permits have been issued from the Texas State Railroad commission.
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