Black Dragon to Close on Participation in Humble Project
OIL CITY, La., Oct. 19, 2009 (GLOBE NEWSWIRE) -- Black Dragon Resource Companies, Inc. ("the Company", "Dragon") (Pink Sheets:BDGR - News) updates previously announced agreement with Kingdom Energy Partners (KEP) to participate in a lucrative drilling and enhanced oil recovery project in the Humble Field in Harris County, Texas. The due diligence has been completed satisfactorily and the deal looks to close this week.
Current estimates indicate the lease to be drilled on this project could have recoverable reserves of up to 500,000 barrels of oil. Dragon's immediate interest could easily yield 25-75 barrels per day, with an annual value of roughly $600,000 to $1,800,000 per well, with current oil prices around $70 a barrel. Dragon looks to drill a total of 5 wells, 1 of them being an injection well, and 4 of the wells producing oil therefore the total annual revenue generated could be anywhere from $2,400,000 to $7,200,000. Dragon will look to drill more wells down the road therefore increasing their interest and revenue stake in the project. The company is very excited to be working with KEP and feels this could turn out to be a very fruitful business relationship and joint venture. KEP will use its patented Coriba chemical for enhanced oil recovery. Drilling is to begin in the next 30 days and first production is expected before year end.
The wells will be less than 1000 ft deep, located in the top of a salt dome, which has been a significant production area for more than 50 years. The Coriba patented technology will allow the recovery of previously by-passed oil. It is a chemical concentrate that lowers the surface tension between the reservoir rock and the oil and thus allows the freed oil to flow more easily to the well bore. Production wells and injection wells are drilled. The chemical goes into the injection well and sweeps the oil into the production well for easy and fast withdrawal. |
