Cano Petroleum Launches Pilot Waterflood Project on Desdemona Field
Cano Petroleum Inc.
|Wednesday, May 25, 2005
Based on positive results from a recent independent geological study of the Desdemona Field, Cano Petroleum Ihas launched its pilot waterflood project on the field in central Texas. The current water injection rate is up to 400 barrels of water per day (bwpd) and is expected to escalate to 2,000 bwpd, with oil production increasing to 350 barrels per day from the pilot location over the next 12 months.
Cano also activated four previously non-producing wells at Desdemona during the past month to increase net production 16 percent to 70 barrels (bbls) net. Another five non-producing wells are in the process of being activated in the near term to further enhance production at the property.
"Cano is on schedule to meet our objective of generating healthy long-term growth in production and revenues," said Jeff Johnson, chairman and chief executive officer of Cano. "We are also continuing to seek out and acquire additional reserves in mature domestic fields, where secondary and tertiary extraction methods can be used to restore active production."
As previously reported, Cano's third party engineers, using year-end 2004 SEC price decks, have concluded that there are 1,010,000 barrels of proved oil reserves at the Desdemona Field. Cano estimates the site contains more than 26 million barrels of probable oil reserves.
The company also has begun marketing the rights to Barnett Shale formations on its Desdemona Field and expects to close a deal within the next 30 days.
Nowata and Rich Valley Reserves
During the past 30 days, Cano also secured permits for drilling and coring a well in its Nowata Field in northern Oklahoma. Drilling will commence next week. These cores will be used for verifying the effectiveness of the Alkaline-Surfactant-Polymer (ASP) technology on the field.
At Rich Valley, also in northern Oklahoma, an initial infill well location has been identified, and drilling is planned to begin based on rig availability, which is expected within the next 90 days.