Alamo has completed the sale of non-core assets in Texas, consisting of three production wells, for $160,000.
The three wells, which Alamo acquired a 75% working interest in during 2009, are located on a 110-acre parcel in West Texas known as the Lozano lease. For the year ended April 30, 2011, the production from Alamo's interests in the Lozano lease totaled approximately 1,600 barrels of oil.
"Our near-term focus is on maximizing the revenue opportunities available to us in our shale acreage while continuing to advance the development of certain oil and gas properties located on approximately 400 square kilometers in the United Kingdom," Allan Millmaker, Chief Executive Officer, said.
"Since we acquired our majority interest in late 2009, the Lozano lease has proven to be a steady contributor of cash flow. Given the dramatic growth in recent months of our shale acreage, the Lozano lease has taken on a reduced importance as a contributor to our overall operations. We are confident that monetizing this mature, non-core asset at this time is in the best interests of our shareholders, particularly given the limited upside of this conventional property."
"Divesting these three wells will enable us to accelerate the development of our assets in the Appalachian basin, which have consistently proven to exceed our expectations. Based on flow tests results, the yield from the 11 natural gas wells we have brought online to date in Kentucky is more than 1.2 million cubic feet per day. We expect to continue to ramp up capacity in that region to drive revenue and cash flow going forward," Millmaker concluded.
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