March 17, 1997 Zeus Energy & U.S. Oil & Gas Update
Zeus: ZUS:VSE
U.S. Oil & Gas: USO:VSE
Happy St. Patrick's Day to all Zeus followers!!
In a conference call this morning with Doug Humphries, Manager of Operations, a few more pieces of the puzzle were put into place.
EXPLORATION:
He explained that the South Wynnewood Prospect was ready to drill on the weekend, as the off-set well is almost ready to go he would like to drill it first. The companies are finalizing an agreement to buy-out an individual who has a small interest in the off-set wells on this property. Once the legal work has been completed the work can proceed, so for right now we are on a day-to-day basis.
We will have more concise details on the off-set well shortly, but here is a little information on what we have heard so far.
There is an excellent discovery well on this property and there has been four off-set wells drilled to date. By having three wells ready to drill instead of one or two, Doug felt that the companies would be able to negotiate a better deal with a drilling company and they would be able to keep the rig to drill the wells quicker.
DEVELOPMENT:
Starting today, the companies will be re-opening and fracing another well on the Balthrop Lease. Zeus and U.S.Oil & Gas each own a 50% working interest in the leases that have an 87.5% NRI. Doug also stated that two Polymer jobs would commence on two current producing wells. A Polymer job is a technique used to decrease the water and increase the oil flow in a well.
ACQUISITIONS:
The companies are continuing to negotiate for the acquisition of currently producing oil and gas properties. Doug stated that a few engineering firms that he is dealing with in Oklahoma are currently executing extensive 3-D seismic shoot programs in the state. He feels that Zeus Energy and U.S. Oil & Gas will have plenty of projects, with up-to-date geological information, to evaluate in 1997.
Comments:
Zeus Energy and U.S. Oil & Gas have been getting plenty of outside interest of late. Many of those in the Oil Patch business are aware of Doug Humphreys and his past success with Tideswest. This not only bodes well immediately, but it also puts the companies in a stronger position when they consider financing options.
More and more, we are pleased that we started to follow these companies. If you take a step back from the market and take a good look at what is actually being accomplished by the strategy Doug has mapped out, it all makes sense. By having multiple wells ready to drill the companies can negotiate a better deal for a drill rig. In the end, the three wells will probably be drilled quicker if they can negotiate to keep the rig instead of having to wait each time for one to become available. The more we hear about the off-set well the more we are
encouraged that success with this well could be what is needed to kick the whole thing off. As you know, both companies have a great share structure in that Zeus has 5.2 million shares I/O and U.S. Oil & Gas has 6.5 million shares I/O. Management is working extremely hard to build the companies up through strong fundamentals as a result of increased revenues and acquisitions with the potential for an immediate impact. If the phones are any indication, the word is getting out and people believe that these companies have a legitimate shot at success. Whatever happens on a daily basis does not concern us as much as the fact that we feel Doug Humphreys has the expertise, contacts, and financial backing to make it happen.
If you have any questions please contact us at 800-831-2956 US or 800-370-4412 Cdn or 604-681-7210 direct. We thank you for your past and future support.
Tandem Capital Group
Tandem Capital Group Inc., is not a registered Investment Adviser or a Broker/Dealer. Readers are advised that the report is issued solely for information purposes and is not constructed as an offer to sell or the solicitation of an offer to buy. The opinions and analysis included herein are based from sources believed to be reliable and in good faith but no representation or warranty, expressed or implied is made as to their accuracy, completeness or correctness. Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report should be independently verified with the companies mentioned. Tandem Capital Group Inc., its officers, directors and employees may have a position, long or short in the securities and/or markets referred to herein and from time-to-time may increase or decrease such positions. Any reference to past performance of any companies and/or investments referred to herein are not indicative of their future performance. Corporations mentioned or featured in this report, may have paid compensation to Tandem Capital Group Inc. Additional information is available upon request.
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