AusTex Oil Limited (ASX:AOK) Announces Strategic Acquisition Of The East Tonkawa Unit In Kay County, Oklahoma
Sydney, Sep 30, 2010 AEST (ABN Newswire) - AusTex Oil Limited (
ASX:AOK), advises that it has settled the acquisition of the East Tonkawa Unit, 907 acres in Kay County. The Unit is held by production with AOK holding a 100% Working Interest and 81.25% Net Revenue Interest.
As part of the due diligence a comprehensive geological and engineering review overseen by J Martin Black, Geologist, has been completed by AOK. Oil and gas production to date has been from the Redfork, Layton, Tonkawa and Mississippi Chat formations. Calculations show 3-4% of the recoverable oil in place has been produced. With modern techniques recovery rates of 15-20% are achievable.
The Unit presents multiple development and recompletion opportunities. Ten existing wells are shut in with minor work required to bring back onto production. Infrastructure on the Unit includes 3 fully equipped water injection and/or disposal wells, a tank battery, compression and gas pipeline equipment which are fully operational. There is an additional 14 temporarily abandoned wells with no production equipment fitted. All wells have up to date logs which are in possession of AOK.
The review also identified 23 Proven Undeveloped drilling locations for vertical wells with opportunities for horizontal completions in the Layton and Tonkawa Sands and Mississippi Limestone formations.
The Mississippi Chat formation responds well to Radial Jet Enhancement Technology. Previous wells in the region have improved from 3 bopd to 68 bopd and 55 bopd respectively using the truck mounted rig operated by AOK. Multiple recompletion opportunities in the Mississippi Chat Formation in the existing wells are to be the first priority in the rework program due to commence in the December Quarter. An initial budget of A$700,000 has been allocated for this work.
The acquisition has been funded from existing capital, however, as additional acreage is under negotiation the full terms and conditions of the purchase are confidential at this time.
Background
Kay County, Oklahoma is located in north-east Oklahoma, 100 miles north-west of Tulsa City. The area is a known oil producing region with laterally extensive multiple oil bearing horizons and is a current hotbed of activity. Current exploration and development in the immediate area includes horizontal drilling in the Mississippi Limestone formation between 4000 feet and 5000 feet from surface. Initial production rates of 500 barrels of oil per day are being achieved with an average well cost of A$1.5 million.
For the complete AusTex Oil Limited announcement including tables, please refer to the following link:
http://www.abnnewswire.net/media/en/docs/63863-ASX-AOK-607847.pdf
About Australian Oil Company Limited
Australian Oil Company Limited (ASX:AOK) (OTCMKTS:SGCSF) is an Australian-based energy company focused on under-explored, recently over-looked, world class oil and gas opportunities near under-supplied markets. The Company is currently focussed on conventional oil and gas exploration and production in the Sacramento Basin in California. Australian Oil has a portfolio of natural gas and oil producing wells in addition to prospects and discoveries at various exploration and appraisal stages. AOK is in the process of evaluating the acquisition of oil and gas producing and exploration assets to enhance the Company's strategic needs and deliver shareholder value.
| ||
|
