EGPI Firecreek announced through its wholly owned subsidiary Chanwest Resources, Inc. the execution of a Letter of Intent to acquire multiple leases for oil and gas production servicing East Texas and Louisiana through the current leaseholder ("The Company"). EGPI also anticipates the expansion into several additional workover programs in their third quarter of operations.
As previously reported, the Company has been in business for over 15 years as an oil and gas production company working approximately 10 to 12 producing wells at depths of 2,200 to 2,400 feet. They currently employ approximately 18 people and own all assets and servicing equipment to maintain its well operations. The deal is to include acquiring 100% working interests and 80% of the corresponding net revenues of the properties covering approximately 2000 acres in East Texas and Louisiana. EGPI also plans to release additional information relating to the acquisition of terms for additional servicing related operations.
EGPI's Board of Directors are currently processing and reviewing all due diligence materials. Plans are to move forward aggressively with a Definitive Agreement for the acquisition of these leases in an expeditious manner.
Third Quarter Update
The Company in the third quarter continues to explore various options for the deployment of new work programs, and the further development of interests owned in the J.B. Tubb Leasehold Estate located in the Amoco Crawar Field, Ward County, Texas.
EGPI through its wholly owned subsidiary Energy Producers, Inc. and its operator Success Oil Co., Inc. recently completed two workover programs in order to stimulate production and is planning additional work programs to frac up to three wells. EGPI is also pursuing an $8.5 million financing in capital expenditures for their Tubb drilling operation and the completion of additional programs for up to seven wells.
Drilling programs are initially being pursued in the South 40 acreage of the J.B. Tubb for the Ellenburger formation down to 8,400 ft; Wolfcamp formation at 6,200 ft and the Waddell formation at 7,700-7,900 ft. depth.
Other available drilling formations at the site include good potentials for Tubb at 4,500 ft; Devonian at 6,700 ft; Glorieta at 3,800 ft; and Upper Clearfork at 4,100-4,550 ft.
Dennis Alexander, EGPI's CEO, stated, "We are extremely excited about the prospects for this target acquisition, which meets our criteria in assisting EGPI's continued growth plans for asset accumulation and continued revenue stream in our Oil & Gas division. As we continue to move forward, we remain very optimistic for the continued growth of our business model going into our fourth quarter of operations and 2012.”
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