EnerJex Enjoys 98% Drilling Success Rate Since April 2007
EnerJex Resources reported key operating activities, completed by its wholly owned operating subsidiaries EnerJex Kansas (EJK) and DD Energy (DD), through the period ended December 31, 2007. Some of the most notable operational successes were: deployment of $8m in capital since April 2007; drilled 84 new wells with a 98% success rate; exceeded debenture BOPDE hurdle rate by 40%; avoided the issuance of 3m additional shares by meeting debenture hurdle; accumulated in excess of 400 drillable locations; and production averaged 268 BOPDE for December.
Steve Cochennet, EnerJex's Chairman and CEO, noted, "We are very pleased with our progress at EnerJex. We continue to realize operational improvements to existing wells with our aggressive work-over program. Consequently, our barrel of oil equivalent per day (BOPDE) has been increasing on a month-to-month basis. Our operations and production has allowed us to not only meet but greatly exceed the debenture covenant that required EnerJex to produce 180 BOPDE on a monthly basis by January 15, 2008, which allowed us to avoid the issuance of 3 million shares to the debenture holders. Production averaged 252 BOPDE from November 15, 2007 to December 15, 2007, which was the first possible measurement period to meet the initial debenture covenant requirement."
Cochennet added, "In addition, EJK has also drilled ten wells at the Gas City project near Iola, Kansas under EnerJex's agreement with Euramerica Energy, Inc. Three of these conventional wells have only been perforated and produced 2.3 million cubic feet in gross sales from December 21 through 31, 2007 without stimulation. The down hole pressure on these three wells is such that we will not stimulate these wells until the pressure has been materially reduced. The remaining seven wells are in various stages of testing and completion."
As a direct result of its drilling activity in the quarter ended December 31, 2007 and initiation of the water flood project at Black Oaks, EnerJex anticipates a significant increase in its December 31, 2007 reserves, which will be updated in its December 31 reserve report and released in February 2008 in conjunction with its third quarter ended December 31 financial statements and Form 10-QSB.
Cochennet concluded, "On a financial front, the dramatic increase in production since April 2007 has put EnerJex in a position where we now have sufficient cash flow to not only meet our internal cash requirements but the flexibility to continue drilling with internally generated funds in order to offset the current projected decline curve of our existing wells. With the progress we made in 2007 and having accumulated in excess of 400 additional drillable locations on existing leases, we are very excited about our prospects for 2008."
EnerJex recently changed the name of its operating subsidiary, Midwest Energy, to EnerJex Kansas. DD was formed in August 2007 to acquire certain leases in Eastern Kansas.