Treaty Energy Corp. Acquires, Improves Texas Well

Bought a working interest in the exisiting Mitchell #1 well in Tuscola.

Treaty Energy Corp. (OTCQB: TECO) has snagged a working interest in a Tuscola, Texas, well from U.S. Fuels of Breckenridge, the company said July 31.

Treaty’s operating with 38.5% net revenue interest (NRI) with a 50% working interest on the existing Mitchell #1 well in Tuscola. The company said it successfully completed a workover the same day in order to immediately increase production and revenue.

Treaty said its deal with help immediately increase revenues and gather more data about the area. The Mitchell #1 acquisition brings to three the total wells it has a working interest in.

The Mitchell #1 well, located 813 feet from the Mitchell #3, had initial production rate of 160 barrels of oil per day and produced a small amount of gas. While Treaty plans to reduce its reliance on marginal wells, the Mitchell #1 has been a consistent producer for more than 15 years in light of the current production of levels of the Mitchell #3 and #4.

The company’s fracing operation used 7,000 PSI of sand with a 2% hydrochloric acid mixture. The company plans to revisit the Standard #2 well at a later date once it evaluates the production data retrieved from the work over of the Mitchell #1.

Total production sold on the Mitchell lease as of July 26 was approximately 2,450 barrels of oil, the company said in July. The Mitchell lease, in two months, has produced more oil than all of the company’s production in 2012. Based on current production and expected well depreciation, the company is expected to meet or exceed oil sale revenues of the prior year independent of additional new drills in 2013.

Total May production for Mitchell lease was approximately 300 barrels. Total June production was approximately 1500 barrels. Mitchell #3 did not start producing until late May and consistent production on Mitchell #4 did not occur until mid-June.

Treaty has operations in Texas, Belize and Louisiana.