Vanguard Energy Corp. (OTCQX: VNGE) has successfully drilled and completed three new oil wells on the Batson Dome field in southeast Texas. The new wells cost approximately $700,000 each and were drilled to a depth of approximately 3,000-4,000 feet.
Exact production rates will vary from well to well because of the nature of the field, which is highly fractured being on top of a salt dome. Also, the wells are producing from pay zones that are different in size and ultimate recovery rates. The company's wells are conventional, vertically drilled wells with no laterals and require no fracing. They produce oil only, no natural gas.
The company utilized data from a 3-D seismic survey completed earlier this year on about half its lease position at Batson and this has proven extremely valuable in selecting exact well locations that will maximize the ultimate recovery of oil and basic well economics. The use of this data greatly enhances the accuracy of the drilling process and will continue to be of significant value as the Company expands its drilling program.
Due to the success of the seismic, the balance of the survey will be completed soon. The company believes it has more than 50 potential total drilling locations on its current acreage in Batson Dome; this will be better determined once all the 3-D data is assembled and available for analysis.
The company is currently producing at a rate of approximately 6,000 bbl of oil per month, which it will sell at a significant premium of $11.75 per barrel over normal WTI prices effective Nov. 1, 2012. This important price differential is possible because of the proximity of the Batson Dome field to several large refineries in southeast Texas as well as the high quality oil the field produces.
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