American Petro-Hunter, on Thursday announce that the Company has executed Letter of Intent (L.O.I.) to acquire a 25% Working Interest in the Colby Prospect, a Kansas oil play added to the Company's growing Kansas project portfolio.
The Colby Prospect is located in Thomas County, Kansas, and is approximately 13 miles southwest of the town of Colby. The 500 acre block has a well defined 3D seismic anomaly that includes 7 potential zones to be tested. The primary objective of the first test well is oil in the Lansing and Kansas City Formations. Colby is a potential multi-well program with the first location to be drilled designated as the #1 Keck well. The operator of the project, S&W Oil & Gas, LLC of Wichita, Kansas, plans to spud the first test well on or around September 21st dependent upon rig availability.
Engineering estimates place the potential production from the indicated pay zones at between 75 and 100 barrels per day. Full development of the field from 2 or 3 offset well locations on the structure could produce between 200 and 400 BOPD. Of significance there is a plugged oil well within the lease that was previously drilled and which discovered oil during a period when prices were depressed and subsequently was not completed. The current prospect partners anticipate a recompletion in order to potentially bring this well into production if and when the #1 Keck well is proven to have commercial viability.
Under the terms of the L.O.I, the Company will pay S&W Oil & Gas, LLC of Wichita, Kansas costs which have yet to be finalized for the 25% Working Interest that covers dry-hole cased drilling charges associated with the #1 Keck exploratory oil drilling program and 25% of all further moving forward costs such as completion and related infrastructure expenditures. The Company will announce these finalized payment costs as soon as they are made available from the vendor. If a successful commercial oil well is established, the Company will receive an 81.5% Net Revenue Interest (NRI) in the well.
In other Kansas based news, the 3D seismic shoot has commenced at the Rooney Prospect located in southwestern Ford County 20 miles due south of Dodge City. The Company has advanced $108,333.00 as part its 50% Working Interest costs of the survey. The acreage block totaling 5,120 acres will be covered by the 3D seismic aimed at identifying Morrow Sand oil and gas targets in sand channels. Once the data is processed and interpreted, it is Management's hope that multiple well locations will be identified. The first test well at Rooney is planned for early November of this year. If successful, a multi-well program is envisaged immediately thereafter.
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