To purchase 100% of WI and 81.25% NRI in 240 acres on the Barbee/Brown lease.
PetroTech Oil and Gas Inc. (OTC: PTOG) entered into a letter of intent with Cavu Resourses Inc. to purchase 100% of the working interest, and 81.25 % of the net revenue interest for 240 acres known as the Barbee/Brown lease in Oklahoma, the company announced on Sept. 17.
The leases will have 26 wells to rework, according to Cavu, and that $400,000 have already been spent to date. Based on bids and estimates, $400,000 will complete and equip all re-works/lease. This should generate 20 to 30 barrels per day (bbl/d) of oil and $90,000 per month. There are 30 drilling locations on acreage available at the Bartlesville Zone at 700 feet with average wells come in and produce at 10 to 20 bbl/d of oil for two to six month period and then level off at 1 to 3 bbl/d of oil. There are drilling locations at the Mississippi Zone at 1,000 feet, which wells come in and produce 30 to 40 bbl/d of oil for two to six month period and then level off at 5 bbl/d of oil.
"There are eight wells that have been reworked and reequipped and one disposal well has been reworked and re-equipped, the production facilities are standard to the industry and are in good working condition to take hydrocarbons for selling commercially, separate, store and dispose of saltwater. Cavu represents and warrants that with the work that has been completed the eight wells/lease; will produce 8 bbl/d of oil to 12 bbl/d of oil flat consistent productions. Currently 8 to 12 bbl/d of oil is the production level $37,000 per month," Eddie Schilb, PetroTech president, said in the release.
The terms consist of $50,000 down payment at closing before Sept.25, and $20,000 a month payout on the balance of $350,000, which will be covered by the net income on the already producing wells, Schilb said.
PetroTech Oil and Gas Inc. initiates, operates, and develops EOR opportunities within qualifying oil reservoirs in the U.S. The company is based in Bedford, Texas.