Nova Energy, Inc. has signed a Letter of Intent (LOI) with a private oil and gas company in Irving, Texas. The companies will participate in a lease redevelopment of a producing property south of Abilene, Texas, geographically known as the Eastern Shelf of the Permian Basin. The Permian Basin is one of the largest oil producing regions in the contiguous United States.
The 13 well redevelopment project consists of reworks of 6 producing wells and 7 new wells. The reworked wells will benefit from new technology enhancement and heavy Nitrogen Acid Frac technology, which was not available at the time these wells were initially completed. This enhancement technology has been successfully used on other leases in the area and is anticipated to increase the wells' current production capabilities. The 7 new wells will use the same new technology, as well as existing production data, and will be drilled to maximize permeation of the existing field.
Daymon Bodard, CEO, Nova Energy, Inc., stated, "This is an exciting new project for the Company. These are shallow drilled wells that will take less time to complete. We anticipate being in full production on all 13 wells within seven months. Once in production on all wells, the Company should be producing a significant positive cash flow that can be used to expand its business and lease acquisition program."
The Company has identified additional leases in the area for which this current redevelopment plan could be implemented and is currently evaluating additional acquisition targets.
Mr. Bodard continued, "Return on Investment remains paramount to the Company. We believe that this is a balanced approach to producing some quality, long-term producing oil wells for the Company. We have reviewed numerous opportunities and will continue to look for the best properties that we can acquire that will generate positive returns for the Company both near and long term."
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