Precision Petroleum has completed the purchase of an 88% working interest of the White No. 12-1 Well in Pottawatomie County, Oklahoma.
The Company, in its ongoing endeavour to acquire attractive producing oil and gas leaseholds, was most pleased to conclude this purchase agreement. Richard Porterfield, President of the Company commented that ongoing weekend negotiations concluded in a deal to purchase the White 12-1 well.
The White well produces from the Hunton Limestone oil bearing reservoir. This well was not previously fractured and has been producing from the natural reservoir completion.
At such future time as the reservoir diminishes, the Company will re-enter the hole and fluid fracture the Hunton Zone with a cross leak gel sand frac. This fracture procedure will extend the producing limestone reservoir by an approximate 3 to 4 hundred foot radius beyond the existing flow structure.
The fracture fluid will permeate the Hunton Limestone and substantially increase the porosity of the reservoir. Mr. Porterfield stated that the frac recompletion opportunity was a key consideration during the purchase negotiations. This well has been online for one year and it has previously generated over $200,000 in net profits.
Based on current production records, The White 12-1 produces in excess of 300 barrels per month. Operating and lifting costs are at industry minimums. In addition, the Company has a salt water disposal (SWD) well nearby at its disposal for direct injection. The importance of onsite water disposal facilities is critical for reduced costs and environmental purposes.
Richard Porterfield commented that, "The recent surge in oil prices, now in excess of $70 per bbl has created a lease purchase stampede." Porterfield also states that: "The Company has to date acquired 11 producing leases and will continue to search out further producing locations."
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