Eagle Oil provided the following update on the oil field restoration to be performed by Questus Energy.
Under the Farmout Agreement, Questus will perform all work and pay all costs associated with reconditioning an initial group of 15 existing oil wells in our East Texas oil field. As part of the work, which the Company expects to commence within the next two weeks, Questus will perform required fluid level and integrity tests on 33 wells located in the field as required by the Texas Railroad Commission. Once these tests are satisfactorily completed, Questus will be able to immediately restart pumping oil on five wells which are already fully equipped. Pumping will restart on the ten additional wells once they are re-equipped by Questus.
The Company expects pumping on the first five wells to commence within 45 days and all 15 wells to be in production within 60 days. The Company projects production to reach approximately 90 barrels per day once all 15 wells are reconditioned.
Additional groups of 10 wells will then be assigned to Questus, up to a total of 104 wells. The Company believes that pumping can resume at all 104 wells by November 2012.
The Company has also signed farmout agreements with two other entities for a total of up to 40 additional wells.
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