The interests consist of approximately 53 shut-in oil & gas wells over approximately 1,900 acres of oil & gas leases located in northern Tennessee. Austin has the right to earn a 50% participating interest in each well and associated contiguous land package by reimbursing Montello for 100% of all costs involved in the completion, stimulation, equipping and tie-in of each well. Austin will provide a decision in writing to participate on a project-by-project basis, within 15 days of receiving a request to participate from Montello. A comprehensive legal agreement is currently being finalized between the companies.
The Tennessee leases are situated in a part of the state where the majority of wells were drilled in the late 1970s - early 1980s. These wells were shut-in during the mid 1980s due to low oil prices and lack of transmission lines for natural gas. The infrastructure is now in place to case and cement each well in order to isolate and treat specific formations using modern drilling/production techniques. A comprehensive geological survey of the area of interest has already begun and includes geophysical, geological, mapping and reservoir-engineering surveys, in addition to studies dealing with land, land-legal and other related matters.
Equipment and crews are mobilizing immediately and should be on-site to commence the first project hole within the next few days.
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