Bering announced that its South Texas prospect has tested positive for oil in its initial test phase. This well was drilled to a depth of approximately 10,000 feet to test the Oligocene Frio trend and the initial test has proven that one of the lower zones has tested positive for oil. Further testing is required to determine if this zone will be commercially viable. This prospect originally had potential gross reserves of 5,000,000 barrels of oil and 46 BCF of natural gas. Bering's interest is a 5% working interest after pay out in this prospect.
The company recently announced that it has entered into a Letter of Intent to participate in a new prospect located in the Gulf Coast area that has potential gross reserves of 120 BCF of natural gas and up to 10 million barrels of oil. Based upon recent prices this equates to a total of $1.3 billion dollars in potential gross revenue of which Bering's working interest would be 2.5% or $23 million, or $0.99 per share, over the life of the prospect. There is no guarantee that this prospect will be successful or that these numbers will be achieved due to production and/or price fluctuations.
"We believe that these initial test results confirm our strategy of seeking out low risk drilling opportunities," stated Steven Plumb, VP of Finance of Bering. "Our recent Letter of Intent in the Gulf Coast area is another example of this strategy."
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