Rango to Add Acreage in California
Rango Energy, Inc. announced it has executed a Definitive Participation Agreement with Hangtown Energy, Inc. whereby Rango will acquire working interests in three exploration/development projects in Central California covering over 12,000 acres of reserve potential.
The three project areas include the Kettleman Middle Dome Project (KMD), the Elk Hills projects located in Kings and Kern Counties in the San Joaquin Valley, and the South Tapo Canyon project located near Los Angeles in Simi Valley. All three project areas are located within producing oil fields and Hangtown will be the operator of record for all of the projects.
Rango will provide 100-percent of the development costs for an initial program of 2 wells per project area, and will receive 100 percent of the production cash flow until payback is achieved. After payback, Rango's working interest will revert to 75 percent for the life of the 6 wells. Further to the initial development program Rango and Hangtown Energy will continue to develop the Project areas equally and jointly to maximize production at each site.
Chief Executive Officer of Rango Harp Sangha stated: "We are very excited to be working with Hangtown, and gratified that we were able to expeditiously conclude negotiations to reach a final agreement that enables Hangtown to focus on drilling our first well in KMD. We anticipate drilling to begin this week. This partnership also enhances Rango's ability to raise additional working capital and build shareholder value through the public markets."
The first well, targeting the oil bearing McAdams formation, is slated to begin drilling this week. The McAdams formation is a porous sandstone unit that has been a prolific conventional producer in the area north of, and adjacent to, the KMD leasehold. The McAdams formation wells have produced, on average, over 2 million barrels of oil equivalent per well.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.