Treaty Energy Corporation Announces Signing Of Drilling Contracts On The Stockton #2 And #3 Wells In Tuscola, Texas
NEW ORLEANS, Sept. 19, 2013 /PRNewswire/ -- Treaty Energy Corporation (OTCQB: TECO) ( http://www.treatyenergy.com), a growth-oriented international energy company, today announced that the Company has signed contracts to begin drilling two self-funded and already permitted wells in Tuscola, Texas. Drilling is expected to begin as early as Saturday, September 21, 2013 but may begin as late as Wednesday, September 25, 2013.
On June 28, 2013, Treaty Energy acquired a working interest on the Stockton lease from U.S. Fuels, Inc. of Breckenridge, Texas. This working interest included a 75% net revenue interest (NRI) and a 100% working interest (W/I). The remaining 25% NRI is dedicated to existing overriding royalty interests (ORRI).
On July 17, 2013, the Company announced it had completed survey work and were solidifying plans to drill two offset wells from the Mitchell lease on the Stockton lease. Requests for drilling permits were filed approximately two weeks after survey work was completed. The Company received permitted approval to drill the two wells on August 6, 2013 from the Texas Railroad Commission (TRRC).The Company finalized and signed contracts on September 11, 2013 to begin drilling the two planned wells on the Stockton lease. As previously announced, the Company has sought no partners on the project and will be completely self-funded. The Company's self-funding grants 100% of the 75% NRI as revenue for the Company. Due to proximity and same field geology, initial production numbers and estimated production rates are expected to be similar to the Mitchell #4 well, which received an initial production rate of 61 barrels of oil per day (BOPD) and an announced production rate of 45-50 BOPD. Both wells will be drilled to an approximate depth of 4800ft and will be drilled sequentially. Based on the Mitchell's production rates, the Stockton wells combined are expected to bring in approximately $205,000 in revenue within thirty days of completion. As part of the Stockton lease development, the Company recently purchased the Stockton #1 well. The strategic Stockton #1 purchase reduced the capital needed to begin work on the project by supplying an existing oil and gas infrastructure, namely the tank batteries and water separators. Both of these were recently repaired by the Company in order to remove the Mitchell #1 from severance.
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