Yaterra Ventures, Inc. on Wednesday announced that final terms are being negotiated on a work over lease agreement which includes more than 150 wells on over 1,600 acres of land in Western Pennsylvania, part of the much desired Marcellus Shale which extends throughout much of the Appalachian Basin.
Yaterra execs state that the majority of these wells are production capable but were shut in due to financial constraints of the previous owners. It is noted that these leases are currently producing between 6-10 barrels of oil per day (bopd) and with the initiation of development phase 1, the company is confident is can increase this level to 20-40 bopd.
Yaterra field execs have mentioned that some of the wells will require a work over which includes replacing pumps, fixing down hole casings etc., while others will only require treatment to remove the mineralization and paraffin build up. The work over and treatment of each well is considered both low risk and low cost, estimated to require less than a $20,000 investment to bring each well up to its maximum potential.
Research indicates that secondary oil has yet to be recovered in the deal’s lease agreements and estimates have the proven secondary oil reserves in the Appalachian Basin Reservoir at approximately 330 million barrels (1 Million Barrels = 1 MMbls) of oil, based on a report by the US Department of Energy, with OOIP (Original Oil in Place) remaining reserves exceeding 60 billion barrels.
Yaterra CEO Cedric Atkinson stated, "Negotiations have progressed well and final acquisition is expected to take place within the next 7-10 calendar days It is important to note that we will be utilizing non-dilutive financing to acquire these wells."
He continues, "As stated in our recent 8-k, our strategic focus begins in the State of Texas and we have identified a few solid opportunities that meet our criteria toward an Agreement. That said, the opportunity in PA with oil and gas assets along the Marcellus Shale, has far too many benefits to pass up. As a result of a deal that did not satisfy our due diligence, the PA opportunity presented itself to us in the past month and this is something I am confident we need to aggressively pursue as part of our portfolio in line with long-term growth and near-term revenue strategies for the company and its shareholders."
As a result of the opportunity in Pennsylvania, the company is actively planning to form a wholly-owned subsidiary aimed at targeting work over lease opportunities throughout the U.S. to take advantage of the recent domestic oil boom and will be selecting key oil and gas executives with a track record for building revenues and exceeding benchmarks in terms of time and cost-efficiency.
The company looks to announce the Purchase/Sale Agreement and another lease acquisition in the coming days (after the Holiday weekend). As well, shareholders can expect an Operational update by August 2012.
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