American Petro-Hunter has executed an agreement to acquire a 50% Working Interest in the Rooney Project, the third in a series of Kansas oil projects added to the Company's growing oil and gas project energy portfolio.
The "Rooney" Project is located in southwestern Ford County, Kansas 20 miles due south of Dodge City off US Highway 283. The acreage block presently contains 8 sections totaling 5,120 acres in T-29-S, R-24 & 25W Ford County. The large contiguous acreage block represents the first land position acquired by the Company that management considers to be a "core" land holding, that future development would provide the basis for the requisite BOE production necessary to meet intermediate and long term goals.
The Rooney Project is directly adjacent to the north edge of existing Morrow Sand oil and gas production. An analog well designated as 3-30-25W in the Morrow pool has cumulatively produced 344,448 Barrels of oil and 933,622 MCF gas. There are multiple wells within 2 miles of our acreage that have produced in the 35,000 to 40,000 barrel range from discrete sand channels.
It is these sand channels that the Company will be identifying through the completion of a 3D seismic shoot across the entire acreage. Permitting of the shoot has already begun and we anticipate commencing the survey shortly. Once processed and interpreted, it is the hope that multiple sand channels and many well locations will be identified. The first test well is planned for late October of this year. If successful, a multi well program is envisaged immediately thereafter. The operator of the project is S&W Oil & Gas, LLC of Wichita, Kansas.
Under the terms of the agreement, the Company has paid to S&W Oil & Gas, LLC of Wichita, Kansas as vendor of the play a total of $113,333.12 for land acquisition and leasing costs. The Company is obligated to fund its 50% Working Interest of the 3D seismic shoot totaling $216,666.64 that will include processing and interpretation as well as 50% of all future drilling costs. If a successful commercial oil well is established, the Company will receive an 81.5% Net Revenue Interest (NRI).
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