HOUSTON, Jan. 27, 2014 /PRNewswire/ -- Evolution Petroleum Corporation (NYSE MKT: EPM) today announced that it has entered into an agreement with a large independent oil and gas operator to install its patented GARP® artificial lift technology on 10 of the operator's wells. All of the wells are located in the Giddings Field in central Texas, with an option to extend to additional wells. The GARP® technology is marketed by NGS Technologies, a wholly owned subsidiary of Evolution Petroleum.
Under the terms of the master agreement, NGS Technologies' subsidiaries will provide use of the technology, pay a portion of the installation costs and oversee the installation in return for a continuing contract fee equal to 25% of the net profits from each well for as long as the technology is utilized. The customer will have the right to cancel the second five installations based on uneconomic performance of the first five.
Daryl Mazzanti, Executive Vice President of NGS Technologies, said: "These installations should further validate the benefits of our GARP® artificial lift technology and demonstrate its growing market acceptance. Our GARP® solution for down-hole loading problems is applicable to many hundreds of wells in the Giddings Field and many thousands of wells in other fields.
"Conventional artificial lift methods can leave substantial volumes of oil and natural gas unrecovered. Our existing GARP® installations increased production from an average of 1 BOEPD to more than 15 BOEPD, restoring marginal or uneconomic wells to material commercial viability and increasing estimated ultimate recoveries by an estimated 20-30%. Recapturing these 'tail' reserves through GARP® may extend the life of leases by years, if not decades, providing a larger window of opportunity for further exploration and development as industry identifies new reservoirs through technology."We also believe that GARP® will be effective in other fields with horizontal wells and certain types of vertical wells. We are currently in various levels of discussions with operators to further demonstrate this potential."