EnerJex Resources, Inc. has begun drilling the first well on its recently acquired acreage in its Mississippian Project located in Southeast Kansas. The Company plans to drill 10 new wells on this acreage in the near term and evaluate the results prior to launching an expanded drilling program.
EnerJex intends to space these new wells evenly across the acreage in order to delineate the oil reservoir and gather important data. The Company believes this approach is likely to provide valuable information that may enable EnerJex to book a significant amount of proved oil reserves associated with this property. Additionally, EnerJex expects the results from this initial drilling program to provide a valuable basis for guiding its future development plans.
The Company's Mississippian Project consists of a 90 percent working interest in approximately 2,940 acres. EnerJex also has an agreement in place to acquire a 90 percent working interest in 1,280 adjacent acres upon fulfilling certain drilling milestones related to its existing acreage. This project is currently producing at a stabilized rate of approximately 100 barrels of oil per day (bopd), and it has the potential to produce at a stabilized rate of more than 1,000 bopd once it is fully developed.
According to the Kansas Geological Survey, the Mississippian formation has cumulatively produced more than 1 billion barrels of oil in Kansas, and it represents more than 50 percent of the state's 35 million barrels of annual oil production.
EnerJex expects to report initial results from this drilling program in the coming weeks.
EnerJex's CEO, Robert Watson, Jr.,commented, "I couldn't be more excited to kick off this drilling program. EnerJex has made tremendous progress on a number of fronts since its transformation at the beginning of 2011, and I expect 2012 to be even better. The Company's management team and board of directors are intensely focused on creating per-share value for stockholders by developing our extensive asset base with minimal dilution. EnerJex has identified more than 500 low-risk development drilling locations on its existing oil projects, and I believe that our progress to date has only scratched the surface."
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