Victory Energy Corporation announced that the Corporation has started drilling the tenth well in the Canyon Sandstone gas play located in the Texas Permian Basin.
The drilling contractor has moved the drilling rig onto well # 166-7 over the weekend after the crew finished plugging and abandoning their initial attempt to drill the tenth well for Victory. They will drill to 1,040 feet to set the surface casing to protect all shallow water zones, as required by the Texas Railroad Commission.
Production tubing has been run on wells #166-8 and #166-3, swabbing continues to bring the wells to the point of gas production, enabling the wells to ultimately flow on their own. Crews are laying the gas transmission line to the main gas collection line, which allows gas to be delivered to market.
This natural gas project was originally valued at approximately $900,000,000 pursuant to a professional petroleum engineer reserve report utilizing a $6 dollars per 1,000 cubic feet of gas. Natural gas has pushed past $10.00 dollars per 1,000 cubic feet in recent months, adding the fact that the gas produced from this field receives a 20% premium due to higher BTU content, moves current pricing for this particular gas to $12.00 per 1,000 cubic feet. Recalculating the approximate value of the project pushes it over $1,800,000,000. Victory's potential share of this project can be as high as $400,000,000, providing Victory continues to drill and expand the project to completion.
"It is important that our shareholders understand the focus of the Corporation and its commitment to this prospect in the Texas Permian Basin. Not only has natural gas been identified by the leaders and analysts of our industry as the target natural resource to be involved in, it is also the most cost effective energy to produce due to the low overhead required to maintain a producing field," stated Jon Fullenkamp, President of Victory Energy Corporation.
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