The Stallion Group reported that testing has been completed at the Company's new gas well discovery in the Sacramento Valley, California. Stabilized flow rates exceeded a combined 1.5 million cubic feet per day of sweet high quality gas. The connection process to the nearby pipeline has begun. With this success an additional 8 wells are being permitted within the existing 3D seismic area.
"This well is the largest discovery well in Stallion's history," stated CEO Christopher Paton Gay. "We expect production to commence shortly and our payback on capital costs should occur within two to four months."
Under the farm out agreement, Stallion will pay 12.5% of the costs of the first discovery well to earn a 6.5% interest. Thereafter, Stallion will pay 6.5% of the costs of future wells to earn 6.5%.
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