First Titan signed an option agreement with Green Oil Operating Monday to explore the infield development of oil and gas resources in Oklahoma.
Green Oil owns the rights to drill and re-enter a prospect known as Gates 1-14 in Hughes County, Okla. The Gates prospect is located in the Warren oil and gas field, where production has been proven in several different formations and has shown significant returns.
Gates 1-14 is planned as a direct offset to a key well, Warren 1-14, that produced over 400,000 mcf of natural gas before down-hole mechanical problems and water ingress impeded the flow.
A petroleum geologist’s report on the prospect estimated that Gates 1-14 could contain 200,000 barrels of oil or gas equivalent recoverable in place. FTTN expects that the low-risk project could yield substantial returns.
The option agreement gives both companies 30 days to conduct due diligence toward a possible definitive agreement.
If FTTN acquires a working interest in the well, it would be the third such drilling project with which the company is moving forward in 2012. The emerging energy company has already acquired drilling assets in Texas and Louisiana.
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