Lucas Energy, Inc., a U.S. based independent oil and gas company, today announced that it has acquired a majority of the working interest in the Hines Unit No.1 well in Gonzales County, Texas. The well is a straight-hole completion in the Austin Chalk formation, which has had cumulative production of more than 173,000 bbls of oil, since its initial production in 1981. The well was drilled in 1981 and was revived in 1987 by another operator who opened up more of the Austin Chalk interval. The well is currently producing 6 BOPD and is a good candidate for Lucas Energy's revitalization program.
The Company believes that the well is located directly on the fracture system as it is one of the most prolific straight-hole completions in the county. The well is in a 160-acre unit south of the city of Gonzales County, Texas and is just west of the Lucas Energy Hagen Ranch No.3 well, which was recently re-drilled to add a new lateral. The Hines well is considered a complement to the development of the area by Lucas Energy and is a key addition to the company's acquisition planning for the first six months of 2008.
William Sawyer, COO of Lucas Energy Inc., commented, "We are excited about the acquisition of this acreage. We believe this will prove to be another example of our ability to revitalize an underperforming oil asset through our unique approach to increasing production yield, and expect continued production enhancements at this site. Our plan is to buy out the remaining working interest in the well in the near future, bringing the well in line with our operating model where we have 100% working interest in each of our properties. In this current pricing environment where oil is at a relative high, we expect incremental cash flow from this property to contribute $180,000 for this year to our financial results."
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