The purchase price for Production Resources Inc. will be $400,000 worth of AMEP restricted common stock and a $400,000 2 year term note at 5% interest payable in two years. American Energy Production Inc. will take control of the properties on January 1, 2004.
In the past five months American Energy Production Inc. has been treating and testing wells on the PRI property with the new heavy oil additive, AMEP HOA-800. Oil produced on the PRI property is 20 gravity. The initial results look very favorable and AMEP has completed a new injection pump trailer to expand its injection system of the AMEP HOA-800 into further wells. Five more oil wells will be treated immediately with the new heavy oil additive in a five-point test. The potential proven produceable oil reserves on the lease is approximately 62 million barrels, as per engineers reports and calculations by the Texas Railroad Commission that only 2% to 4% of these oil reserves have been produced over the last 20 years. AMEP plans to eventually treat all 193 of the oil wells and then have an ongoing treatment program.
Charles Bitters, President of AMEP said, "This new heavy oil additive has been very interesting and at this time has the potential to radically change the way secondary recovery of heavy oil is produced in the future. However, it will take more treating and testing to refine the most efficient treatment methods." Mr. Bitters also stated, "The purchase of the PRI properties along with the opportunity to use the AMEP HOA-800 additive on these properties will allow the Company to add tremendous value to AMEP in a very short time."
Most Popular Articles