The consideration paid for this property was $1,100,000 cash which will be funded through existing working capital and bank lines of credit.
A Gilbert Laustsen Jung Associates Ltd. Report dated October 1, 2003 for the acquired property assigned proven reserves of 106,917 Boe and established reserves (proven plus 50% probable) of 151,608 Boe. The net present value of the established reserves at 12% before tax was $1,216,000. As a result, the valuation metrics reflect costs of $10.29 per Boe proven reserves and $7.26 per Boe established reserves, and $20,000 per producing Boe.
The acquisition included our partner's 25% working interest, subject to a 2.5% gross over-riding royalty, in an adjacent undeveloped quarter section off-setting our successful horizontal wells at Wordsworth. Our recently shot 3-D seismic program indicates two drilling locations on this quarter. The first well, Bulldog 50% working interest, will be drilled as part of our current drilling program.
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