Black Dragon Chairman and CEO, Mr. Scott D. Smith, announced that the initial well on Dragon's 640 acre lease has been drilled to the top of the Nachitoches gas cap rock, and site preparation has begun on the second well location. The second well will be drilled by the end of this week and upon its completion, a smaller rig will be brought in to air drill the last portion of both wells. This process ensures that the wells will be capable of capturing the maximum amount of gas in this delicate formation. If the main drilling rig was to fully complete these wells, Dragon would run the risk of damaging its future returns.
The recently mentioned Paluxy well, in which Dragon owns a small interest, has been brought into production this week and has shown excellent results. Paluxy oil is much thicker and more viscous than many other varieties, so the interest owners are installing a heat treatment unit which is necessary for this type of production to be marketed in the current cold climate.
Mr. Smith further remarked that Dragon is currently in negotiations to acquire a possible 40% interest in a lease that is comprised of 14 wells and has an excellent production history for a stock issuance. This lease has averaged 215 barrels of oil per month over the last year which would be a nice asset to add to Dragon's portfolio.
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