Black Dragon will be acquiring another 3 1/2% of the Humble Lease, giving Dragon a total of 20% ownership. Management discussed with Mr. Hamm the good, bad and ugly of the Humble Project. Management will be spending more time in Houston to help get the Humble Project finished.
Management also stated that Dragon and Sartor Drilling will drill and complete the fifth well and run and bury all necessary lines which will lead to the commencement of the EOR phase. The EOR phase of the project includes the use of a patented EOR chemical injected via steam under pressure which will reintroduce the drive in to the formation, which will hopefully enhance the recovery rates from the project's producing wells. With Dragon taking a more active role in the completion of the Humble Project it might receive an additional 5% royalty, bringing total ownership to 25%.
Management is hoping that the first phase will yield the Dragon $95,000 to $105,000 a month for every 5 wells. The goal is to drill at least 10 more wells, meaning the Humble Project alone could bring huge profits to the Dragon.
Management also stated that it is expecting the first cash payment from the operator for the last three months.
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