This Weeks News
Treaty Energy Corporation Newsletter for the Week of August 19, 2013
Treaty Energy Corporation Newsletter for the Week of August 19, 2013
Over the last eight months, Treaty Energy Corporation (OTC: TECO) has made great strides in improving operations in Texas and in Belize. In order to improve shareholder confidence and to increase transparency, the Company will begin issuing weekly newsletter updates on all oil and gas operations.
This newsletter is for the week of August 19, 2013 and contains information current as of August 16, 2013. Information contained in this newsletter may be outdated at the time of release. Prior issues of the newsletter may be found on the Company’s website located at http://www.treatyenergy.com/investors/news .
As announced on the August 16, 2013 press release, the Company is preparing a large update on Texas operations that will be available following the acquisition of the Stockton #1 well in Tuscola, Texas. As such, information on Texas operations may be limited until the acquisition is completed.
Discussions on the West Texas Sale
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:
This newsletter is for the week of August 19, 2013 and contains information current as of August 16, 2013. Information contained in this newsletter may be outdated at the time of release. Prior issues of the newsletter may be found on the Company’s website located at http://www.treatyenergy.com/investors/news .
As announced on the August 16, 2013 press release, the Company is preparing a large update on Texas operations that will be available following the acquisition of the Stockton #1 well in Tuscola, Texas. As such, information on Texas operations may be limited until the acquisition is completed.
Discussions on the West Texas Sale
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. The Company also maintains its hydrocarbon exploration operations in Belize.
1 st & 2 nd Quarterly Filings
As stated in the July 26, 2013 newsletter, the Company began work on the first and second quarter (Q1 and Q2) financials. The Q1 financials are nearing completion and will likely be filed the week of August 19, 2013 or the week of August 25, 2013. The Company is currently awaiting auditor’s final approval, which is required before submission to the Security and Exchange Commission.
The 10-Q was scheduled to be completed the week of August 12, 2013 as stated in the newsletter for that same week. The Company’s auditors requested more time to review our materials and have requested some documents for verification which has delayed the final release of the Q1 financials.
In anticipation, the Q2 financials are currently being prepared based on the already adjusted Q1 financials.
Prior to their release, shareholders should be aware that the Q1 2013 financial statement will reflect actions taken by management in its evaluation of existing well operations, while simultaneously making several internal operating changes. Q2 2013 will reflect the transition in operating strategy from marginal “shallow well” operations to exploratory drilling operations with new “deeper” wells (Mitchell #3 and #4). Q3 2013 and beyond will start reflecting the success of management’s strategic policy changes.
Following the submission of the Q1 financials, a formal press release will be issued the following day that will repeat this sentiment.
Mitchell #1 Operations
On August 14, 2013 the Mitchell #1 was inspected by the TRRC to have it removed from severance. The TRRC official onsite cleared the Mitchell lease. However, due to a backlog of paperwork at the TRRC, the report has not been entered into the system yet. Once the report is in the system, U.S. Fuels will be cleared to pay the fine and have the severance cleared. While an unfortunate situation, the Company must abide by the instructions of the TRRC before any further actions can be taken on the Mitchell #1.
After the severance has been cleared, the existing oil will be removed from the tanks and the well will be connected and turned on. The Company will then report flow rates on the Mitchell #1 in one to two weeks after it has been reconnected to the tanks as per Company protocol when announcing flow rates.
Belize Operations
This update does not establish commercial validity or invalidity of San Juan #3, but rather only updates investors on the status of on-going drilling activities.
To further clarify the situation in Belize, the Company has designed this handy infographic for investors:
The Company is continuing with on-going completion activities in Belize. The Company will state the results of these completion efforts by the end of the month, with the support of the Government of Belize. The August 31st deadline was voluntarily established by the Company two weeks ago. All information relating to the current status of the well is considered unconfirmed and only rumored as the Government of Belize has not had the opportunity to evaluate the well data.
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. The Company also maintains its hydrocarbon exploration operations in Belize.
1 st & 2 nd Quarterly Filings
As stated in the July 26, 2013 newsletter, the Company began work on the first and second quarter (Q1 and Q2) financials. The Q1 financials are nearing completion and will likely be filed the week of August 19, 2013 or the week of August 25, 2013. The Company is currently awaiting auditor’s final approval, which is required before submission to the Security and Exchange Commission.
The 10-Q was scheduled to be completed the week of August 12, 2013 as stated in the newsletter for that same week. The Company’s auditors requested more time to review our materials and have requested some documents for verification which has delayed the final release of the Q1 financials.
In anticipation, the Q2 financials are currently being prepared based on the already adjusted Q1 financials.
Prior to their release, shareholders should be aware that the Q1 2013 financial statement will reflect actions taken by management in its evaluation of existing well operations, while simultaneously making several internal operating changes. Q2 2013 will reflect the transition in operating strategy from marginal “shallow well” operations to exploratory drilling operations with new “deeper” wells (Mitchell #3 and #4). Q3 2013 and beyond will start reflecting the success of management’s strategic policy changes.
Following the submission of the Q1 financials, a formal press release will be issued the following day that will repeat this sentiment.
Mitchell #1 Operations
On August 14, 2013 the Mitchell #1 was inspected by the TRRC to have it removed from severance. The TRRC official onsite cleared the Mitchell lease. However, due to a backlog of paperwork at the TRRC, the report has not been entered into the system yet. Once the report is in the system, U.S. Fuels will be cleared to pay the fine and have the severance cleared. While an unfortunate situation, the Company must abide by the instructions of the TRRC before any further actions can be taken on the Mitchell #1.
After the severance has been cleared, the existing oil will be removed from the tanks and the well will be connected and turned on. The Company will then report flow rates on the Mitchell #1 in one to two weeks after it has been reconnected to the tanks as per Company protocol when announcing flow rates.
Belize Operations
This update does not establish commercial validity or invalidity of San Juan #3, but rather only updates investors on the status of on-going drilling activities.
To further clarify the situation in Belize, the Company has designed this handy infographic for investors:
The Company is continuing with on-going completion activities in Belize. The Company will state the results of these completion efforts by the end of the month, with the support of the Government of Belize. The August 31st deadline was voluntarily established by the Company two weeks ago. All information relating to the current status of the well is considered unconfirmed and only rumored as the Government of Belize has not had the opportunity to evaluate the well data.
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