The leases add 240 additional mineral acres, and 33 existing oil and gas wells. Two of the wells are in the Glen Rose Formation (3500-4500 feet deep), 20 are in the Annona Chalk (1500 Feet) and 11 are in the Nacotosh Sands (800-900 feet). Black Dragon obtained its interest in return for the obligation to place all of the existing wells into production in the next 180 days. Black Dragon anticipates the related cost of putting the properties into production to be less than $300,000. The Company's consulting engineer, Ronnie Allen, has informed Black Dragon that he anticipates that the existing wells when placed into service should produce at least 600 barrels of oil a month, according to existing data.
Richard Michael, President of Black Dragon, stated, "Black Dragon has made substantial progress on the production program in its primary area of operations surrounding Oil City, Louisiana. In the last 60 days, the Company has put 90 previously inactive wells on line in this and nearby fields increasing production by 2000 gross barrels of oil per month. The Company's revenue interest on these wells is approximately 70 percent."
Michael added, "We continue to execute on our basic strategy of re-equipping and restoring production to the existing wells in our fields and are set to begin drilling new wells on vacant acreage." Black Dragon has secured the services of an operator for its recently acquired rig and anticipates drilling the four wells now permitted on the Caddo Lake leases beginning the week of December 12th (weather permitting) and the four salt water disposal wells currently permitted in the Caddo Pine Island field. Mr. Michael concluded by saying, "The efforts should result in significant production increases."
Black Dragon Resource Companies, Inc. is an oil and gas production company focused on the acquisition of mature, producing and existing U.S. oil and gas fields. The Company's focus on mature, domestic oil fields eliminates exploration risk, reducing costs, and provides immediate generation of income in a niche market where larger independent and major oil companies are not positioned to compete.
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