EnDevCo Acquires Stake in Offshore Production Potential
EnDevCo has entered a farmin agreement covering East Cameron Block 71 located in Federal OCS Waters offshore South Louisiana. The Company has obtained the necessary debt financing for the project and has identified a rig to begin the initial well re-completion designed to establish estimated daily production of 3,000 barrels of oil equivalent (BOE) per day.
EnDevCo has designated Open Choke Energy, LLC as the project Operator who will re-enter the existing East Cameron 71-7 well and attempt to complete the prolific "OC" pay sand. In the event that this re-entry is not successful, EnDevCo has the right to drill a replacement well to test the OC sand within a reasonable timeframe. The Farmin agreement was secured from Noble Energy, Inc., Mariner Energy, Inc., and Entech Enterprises, Inc. and grants EnDevCo an assignment of their operating rights down to a depth of 12,600 feet upon the initial commercial completion of the OC sand. Before payout, Noble, Mariner and Entech will together retain a total 8.33% overriding royalty interest which can be converted at their option to a 25% working interest after payout.
Pursuant to a joint participation agreement between EnDevCo and Open Choke, EnDevCo will earn 1/3 and Open Choke will earn 2/3 of the rights in this farmout. This joint participation agreement also secures EnDevCo's access to the production platforms on East Cameron Block 71/72 Field that are currently producing approximately 20 million cubic feet of gas per day and which are equipped with all necessary production facilities and pipelines to support increased oil and gas production resulting from drilling and completing new wells.
Concurrent with the well recompletion program, the state of the art 3D seismic previously acquired over East Cameron Block 71 will be utilized to identify additional drilling locations to fully realize a possible reserves potential of 2 million BOE.
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