American Standard has commenced a 10 net well drilling program in Andrews County, Texas.
ASEN plans to drill the University Andrews 42 #2 well to the Devonian formation and then subsequent wells will be drilled to the Strawn formation and completed in the Strawn, Wolfcamp, Spraberry and Lower Clearfork formations. The Company will own 100% working interests in all 10 wells.
The Company anticipates the Viking Rig #20 to move in the latter part of this week to the University Andrews 42 #2 well to begin this drilling program.
ASEN has engaged Cambrian Management, Ltd. ("Cambrian") to oversee the drilling program and completion of these wells. Cambrian is widely recognized in the industry for its track record for highly successful drilling and completion of Wolfberry wells in the Permian Basin over the past 10 years.
Upon completion, ASEN's wells will be turned over to our affiliated partner XOG Operating for ongoing operations. Utilizing this relationship for our operations will provide cost control and reliable operations with a seasoned operator with 30 years of experience operating in the Permian Basin of west Texas.
ASEN currently produces over 800 barrels of oil equivalent per day (BOEPD) from 27.67 net wells in the Permian, Bakken and Eagle Ford combined. This initial drilling program is expected to increase our net well count by more than 35%, and is expected to increase daily production by more than 100% in the first quarter 2012, to a projected cumulative production of approximately 2,000 BOEPD.
Scott Feldhacker, CEO of ASEN commented on the potential impact of this drilling program on the Company's growth outlook. "We are optimistic that these 10 wells will have a significant impact on the growth prospects for ASEN. We hold a high number of potential drilling sites in the Permian today with 100% working interests, which allow ASEN to control its growth outlook and capital budget expenditures."
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