NEWS:
Resource America Inc. Announces Pioneering Horizontal Well Completion
PHILADELPHIA--(BUSINESS WIRE)--Sept. 24, 1998--Resource America Inc. (Nasdaq:REXI) (the "company") announces that Resource Energy Inc., a wholly owned subsidiary, has successfully drilled and completed the first slim hole, short radius, horizontal well re-entry in the Appalachian Basin -- an oil and gas productive region that stretches from New York to Kentucky.
The Maring No. 3-B encountered 85 feet of fractured and faulted reservoir and has tested in line at flow rates in excess of 250 barrels of oil per day and 150,000 cubic feet of gas per day. The company owns a 100 percent working interest in this well.
Jeffrey Simmons, executive vice president of Resource Energy Inc., stated that the benefits of horizontal drilling, as experienced in the Austin Chalk formation in Texas and elsewhere, will be the ability to precisely control the placement of the well bore and to cut the fractured reservoir formation in a manner that maximizes the length of the productive section. Simmons further stated that, in certain applications, this technique results in significantly higher production rates and ultimate recovery than traditional vertical drilling.
Based on the success of the Maring No. 3-B, the company intends to further develop the more than 10,000 acres of Bass Island formation mineral rights it holds.
The company will make a full technical presentation of this effort on Nov. 4, 1998, at the annual meeting of the Independent Oil & Gas Association of New York.
The Maring No. 3-B, located in Chautauqua County, N.Y., was originally drilled in March 1991 as an unsuccessful vertical test of the Bass Island formation, a faulted limestone reservoir. The company, with a supporting grant from the New York State Energy Research and Development Authority, re-entered the Maring No. 3-B and from a depth of 2,580 feet reached horizontal within 68 vertical feet with a further 200 feet of horizontal extension. Subcontract support services were provided by Wilson Downhole Services, Weatherford Enterra, Limestone Drilling and Frontier Resources.
In addition to real estate finance and equipment leasing activities, the company owns, operates and manages interests in 1,264 oil and gas wells and 590 miles of gas gathering pipelines, held directly and in 65 partnerships and joint ventures it manages, located in New York, Pennsylvania and Ohio. Additionally, the company owns more than 91,000 acres of mineral rights.
On July 13, 1998, the company entered into an agreement to acquire The Atlas Group Inc., a privately held company located in suburban Pittsburgh. Atlas currently owns, operates and manages interests in more than 1,400 oil and gas wells, held in more than 25 partnerships and joint ventures it manages and 650 miles of gas gathering pipelines, located predominantly in Pennsylvania and Ohio. Atlas owns in excess of 155,000 acres of mineral rights.
Statements made in this release include forward-looking statements, which involve substantial risks and uncertainties. The company's actual results, performance or achievements could differ materially from those expressed or implied in this release as a result of certain factors, including competition within the energy finance industry, climatic conditions and the price of oil and gas in the Appalachian area, actual versus projected volumetric production from the company's energy investments and the cost of supplies and services in the energy industry.
CONTACT:
Resource America Inc., Philadelphia
Michael L. Staines, 215/546-5005
Fax: 215/546-5388
KEYWORD: PENNSYLVANIA NEW YORK OHIO KENTUCKY TEXAS
BW0217 SEP 24,1998
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