Here are more details about the drilling program I was asking about:
(I'm NOT trying to sell this here...just asking from those that may know if this is an attractive deal. I am not familiar with the expected returns on such projects.)
One Unit ($10,000) Consists of:
0.5882% Working Interest (WI), and
0.4706% Net Revenue Interest (NRI)
Oil and Gas Year 1 Projection
BBLS oil per day (over 9 wells) 33
Price per BBL $70
Gross Revenues per Day $2,310
Gross Revenue per Month $69,300
NRI % in EACH well per ONE Unit 0.47%
NRI Revenue per Month $325.71
Less: LOE,severance tax and reserve for
subsequent reworks and operations -$200.67
NET MONTHLY INCOME (per unit) $125.04
First Year ROI 15%
This project is Turnkey to the investor.
This offering includes a rework program
on 4 existing shut-in wells and 3
injection wells, in addition to converting
2 injection wells into producing wells.
The investor does not have liability for
cost overruns on the initial reworks but
will be assessed for subsequent reworks
or operations, pro rata on total project.
The East Voss Field consists of 320
acres in the East Voss Tannehill area,
Knox County, Texas. The Field was
discovered and developed by Unocal
in the 1950s and had a cumulative
production of 2.2 million barrels of oil
from the Tannehill sandstone. Initial
well production ranged from 50 to
230 barrels per day. ONE Energy has
acquired the lease on the south half of
the Field.
The Tannehill sand formation is
shallow at approximately 2,000 ft
deep and average net sand thickness
in the wells is 29 feet. The field was
waterflooded in the 1960s and
then sold to small independent oil
companies. Due to low oil prices,
waterflood operations in the field were
terminated and maintenance of the wells
and surface equipment was ignored.
The wells in the field have been shut-in
since 2002, consequently no production
has been reported.
Geologic analysis demonstrates
that additional oil recovery may be
anticipated due to poor sweep efficiency
resulting from the inhomogeneous
nature of the reservoir. In the Field, the
Lower and Upper Tannehill sands are
separated by tight Stockwether
limestone. Since some of the
wells were perforated only in one
interval, it is suspected that many
lenticular sand intervals have not
been swept properly.
ONE Energy’s plan to revitalize
the south half of the Field includes
reworking seven production wells,
converting two injection wells
into producers and repairing five
additional injection wells. Once
production is established and profit
is generated, the information gained will
be used to aid in the study of logs for
possible re-perforation and production
enhancement on critical wells. |
