U.S. Energy Corp. announced that its partner Houston Energy, L.P. ("HE"), has reached contract depth of 9,300 ft on the third well drilled with HE this year. Productive zones have been identified with approximately 38 ft. of net pay and preliminary analysis indicates the well is commercially productive. Production from the well is expected to commence within the next 60 to 90 days. Actual production rates from the well will be announced at that time.
Under the terms of the participation agreement previously announced, USE paid a third of the costs to drill this initial well to earn a 25% after casing point working interest (17.625% net revenue interest). USE is responsible for 25% of all costs going forward.
"We continue to build momentum with our partner Houston Energy having drilled two successful wells in three attempts," stated Keith G. Larsen, CEO of U.S. Energy Corp. "This is an important well for U.S. Energy as it represents our largest individual working interest and should provide us with greater exposure to oil in a period of improving commodity pricing," he added.
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