Victory Energy, through its affiliate Aurora Energy Partners, announced it has entered into an agreement with C.O. Energy and Marshall R. Young Oil to acquire a 2.5 percent working interest in the Young No. 1 well located in Jones County, Texas. This "Glen Thomas" wildcat well was completed and tested January 14, 2011. The well is now on production at a rate of 300 barrels of oil per day (BOPD) and 100 MCF of natural gas per day.
Interest assignment of this production is effective February 1, 2011, with the company expecting revenue during the second quarter of 2011. Oil production is from the Caddo formation.
The agreement also includes a working interest of no less than 1.5 percent in a sixty-four (64) square mile (40,966 acres) 3-D seismic imaging supported development area. The well operator, C.O. Energy, envisions drilling one to two wells per month until the targeted area is fully developed. Victory Energy maintains a thirty (30) day first right of refusal to participate in each development well.
Aurora Energy Partners is a Texas general partnership that includes Victory Energy Corporation, James Capital Energy, LLC, and James Capital Consulting, LLC. Victory Energy Corporation serves as managing partner of Aurora Energy Partners.
Robert Miranda, Victory Energy's chairman and interim CEO, stated, "This multi-year development opportunity fits nicely with our strategy to acquire small yet high impact interests in low risk, rapid return of capital opportunities, and represents a positive step toward our goal of getting Victory Energy cash flow positive as soon as possible. It also denotes the strength of the oil and gas industry relationships that our new board members and management team bring to the table."
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