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 AusTex Oil Limited
AusTex Oil Limited (ASX:AOK) (OTCQX:ATXDY) is a Public Company listed on the Australian Securities Exchange (ASX) and the OTCQX.
AusTex is focused on exploration and development of oil and gas leases in the USA. The company produces oil and gas in Oklahoma and Kansas and is currently developing producing leases in both states with interests in 11,600 net acres of oil and gas leases in the Mississippi Lime Play. The Company has net production of circa 800 boe/day with Independent 1P reserves certified at 3.505 Million BOE with NPV10 of US34.8 million as at 31 December 2015.
US operations are based in Tulsa, Oklahoma, with an office at 1801 East 71st Street. International Energy Corporation (Oklahoma) is a wholly owned subsidiary and a licensed oil and gas operator in Oklahoma and Kansas.
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