Brinx Resources has provided this update outlining the recent corporate developments and near term prospects of the Company.
"The Company's strong financial position and significant cash flow mean that Brinx is set to take full advantage of the numerous potential well locations that have been identified on our projects," said Brinx President, Leroy Halterman. "Furthermore, the Company continues to actively seek and negotiate new opportunities in order to further develop the Company and provide value to its shareholders."
The Company is currently participating in oil and gas exploration, production and development in three distinct geographic regions: Oklahoma, Mississippi, and California. A brief overview of each, including recent developments, is outlined in the following:
The Oklahoma Projects have proven to be a great success for the Company in 2009. The recently completed 2008-3 program yielded four oil and gas wells (80% success rate) including the previously announced 2008-3-4 well, which was completed in mid-May and commenced flowing oil and gas at rates between 380 and 400 barrels of oil and 60 mcf of natural gas per day. Today, 6 months later, the 2008-3-4 well continues to produce naturally at approximately the same rates with no decline in flowing tubing pressure. Two additional drilling programs (the 2009-2 and 2009-3) are located in the same region as the 2008-3 program and are currently underway with the same operating partners. The Company has a 5% working interest in these three ongoing drill programs in Oklahoma.
As part of the Oklahoma Projects, but located in northern Oklahoma, Brinx holds an interest in the Three Sands Project which consists of three currently producing oil and gas wells. An extensive number of drill locations still exist at this site, and the Company looks forward to further development at the Three Sands when oil prices have improved or stabilized. Brinx holds a 40% working interest in the Three Sands Project.
The Palmetto Point Project in south western Mississippi continues to be an important focus for the Company. In late 2007, Brinx and partners successfully completed two oils wells at Palmetto Point. The wells are currently producing about 80 bbls per day with an equal amount of water. High water and flooding have prevented access to the location to treat the wells. It is expected that the wells should return to their original higher production levels of approximately 140 bbls per day after treatment.
Drilling at Palmetto Point led to the discovery of the previously unknown Belmont Lake Oil Field. Two wells drilled into this new discovery initially produced at over 100 bbls per day each, but were shut-in after only a few months due to flooding in the area. Additional equipment has been installed to control flooding and the Company intends to return these wells to production when weather permits vehicle access to the site. Additional drilling will be required to fully exploit this significant new discovery. Brinx holds an 8.0-8.5% working interest at Palmetto Point.
The King City Project is Brinx's latest prospect. In May 2009, Brinx acquired a working interest in the 10,000-acre King City Prospect in southwestern California. The King City Prospect is offsetting a large, historic, and relatively shallow oil and gas field. The Company is excited about the potential for this prospect due to current exploration and development activity on land neighboring the project area. Moreover, operations in this region, once they commence, will be manageable year round. Brinx holds a 20% working interest at King City.
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