Black Dragon has moved forward with its commitment from interested European investors to fund its Cotton Valley well drilling program. Meetings are scheduled in Europe in the next 2 weeks to finish negotiations with our potential European partners. This project will couple an aggressive acreage acquisition program with the 640-acre lease that Dragon has already in our inventory.
The two shallow wells drilled on this property in December will be tied into a pipeline for gas sales in the near term, as they show good pressure at the well heads. Drilling the Cotton Valley strata on this particular 640-acre parcel is a very attractive investment, because a major oil & gas company drilled a very successful Cotton Valley well on contiguous acreage. This proven well, which was drilled in 2007, flushed in at almost 12 million cubic feet of gas (MMCF) per day, and continues to be highly productive to date. BDGR hopes to mirror this well's results, with its adjacent acreage, as the Cotton Valley is a blanket formation covering much of East Texas and Northwest Louisiana with depths ranging from 9,000-12,000 feet, depending on location. 12 MMCF per day equates to approximately $1,440,000.00 in gross revenue per month at $4.00 natural gas prices. The proposal includes up to eight Cotton Valley wells with a turnkey cost of $30,000,000.00 -- $35,000,000.00; however, upon completion of all eight wells, revenues could gross $107,200,000.00 in the first year.
According to Scott D. Smith, Chairman and CEO, "The potential to derive revenues for shareholders from this project is enormous. Gas wells can have lives in the tens of years and this one project alone long term could equate in well over 1 billion dollars in revenue. We are excited to have found partners who share our vision and look forward to a solid relationship forming between our two groups."
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