Exterra announced the closing of 31 wells on 12 leases in the East Texas Woodbine field. This package is part and parcel to the overall East Texas package announced in April. Exterra expects to close on the overall package in the near future, but closed on these wells to immediately begin the re-equipping process.
Exterra expects these wells to yield a net income of approximately $125,000 per month within 3-4 months after work-over. The overall package consists of approximately 395 Oil wells on 3,500 acres of land consisting of pump-jacks, submersible pumps, tank batteries and infrastructure located in the Woodbine Formation in the East Texas Field. This field is one of the oldest and most prolific producing fields in the US. The leases are located in Upshur, Gregg, and Rusk counties. The field is currently producing 100 to 120 barrels of production per day out of only 52 wells which are making an average net income of $200,000 per month. The Company plans to re-equip approximately 100 wells over a six month period that would require around $10,000 per well to be put into production, which would then generate approximately $500,000 per month in additional net income for a total of approximately $700,000 per month in net cash income per month. The remaining wells will be re-worked through the cash flow of the 152 wells and will be a longer term project.
Todd Royal, CEO, said, "While the current producing wells generate cash flow, our goal to have the first 100 wells re-equipped and online producing within 6-8 months of closing and generating approximately $700,000 per month in net income to Exterra. In addition, there is the upside potential in deepening many of the prospects along with new drilling potential as Exterra will be acquiring over 3500 acres of leases."
Commenting further, Mr. Royal said, "This deal is the cornerstone of our business plan which is to maximize shareholder value and continue to add to our oil and gas portfolio."
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