FormCap Corp. announced that geological and geophysical (G&G) due diligence on the acquisition of 1500 acres of prospective oil leases in Cowley County, Kansas is completed. The G&G work has identified four exploration drilling locations on the Leases. FormCap expects that drilling will commence on the Leases in 1Q 2014. Furthermore FormCap has expanded the scope of its proposed lease purchase program in Cowley County, Kansas by an additional 900 acres for a total of up to 2,400 acres of prospective oil and gas exploration Leases.
In addition to the four drilling locations, FormCap expects to acquire a seismic program in early 2014 in concert with other explorers in the area to further delineate exploration prospects on the Leases.
There are four significant oil and gas fields in the area of the Leases, the Atlanta; Burden; Eastman and Combs Fields. These fields collectively have cumulative production of over 9 million barrels of oil.
FormCap will pay Kerr and Keta two hundred dollars ($200.00) per acre for up to 2400 acres of Leases, at total cost not to exceed four hundred eighty thousand dollars ($480,000) (the Purchase Price) unless agreed otherwise by the Company. FormCap will own 100 percent of the Leases (80 percent net revenue to FormCap; 20 percent freehold royalty), and will be operator. FormCap will have the option to purchase additional leases in Cowley County from Kerr and Keta under an Area of Mutual Interest ("AMI"), the terms of which are set forth in the Agreement. FormCap is required to drill one well in each of the first two (2) years of the Lease term to maintain its interest in the Leases.
FormCap will also have the option to participate in the drilling of up to six exploration or development wells on lands currently owned by Keta and Kerr under terms set forth in the Agreement.
Significant quantities of oil and gas have been discovered and produced in Cowley County in recent years. The prospects for oil production are excellent with multi-zone potential for both vertical and horizontal development. In addition to the Mississippian, zones producing in this area include the Layton, Lansing-Kansas City, Bartlesville, Stalnaker and the Arbuckle. Reservoir properties are excellent with good porosity and permeability in thicker accumulations of hydrocarbons. Total depths of approximately 4,000 feet provide drilling time of approximately seven (7) days with completed wells costing about $500,000 per vertical well.
FormCap is actively engaged in identifying, financing and developing oil and gas energy resource properties in North America, including the development of the Cowley County, Kansas, Mississippi Prospect in Kansas. FormCap continues to review additional resource properties that combine positive elements of short-term exploration and development costs with high potential for long-term success and financial return.
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