FieldPoint Petroleum announced the acquisition of a working interest in the South Vacuum Field in Lea County, New Mexico. The acquisition price is $1,000,630 for working interest of 25%-50% in four natural gas wells effective June 1, 2009. Based upon engineering reports and certain standard assumptions we paid approximately $1.54 per mcfe for these gas reserves. We estimate that this property will replace approximately 152% of our 2009 anticipated (BOE) barrels of oil equivalent oil and gas production.
"This acquisition gives FieldPoint additional production in the New Mexico deep natural gas play, and it meets all of our acquisition criteria," stated Ray Reaves, President and CEO for FieldPoint. "We expect this purchase to show an excellent rate of return, based on existing production, and we believe that this field offers development potential that could further serve to increase our production, earnings, and cash flow from operations," commented Reaves.
As has been its past practice with acquired property, FieldPoint plans for an active redevelopment program. FieldPoint also plans for additional operations designed to increase production and current reserves, including but not limited to facilities improvements, production equipment upgrades, and wellbore optimization activities. No time frame has yet been established for this activity.
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