#2: The proceeds from the preferred sale will be invested in infill drilling in
the company's Big Foot Field in Frio County, Texas, and Revilo Unit in Scurry
County, Texas.
Burditt said Oilex plans to raise up to $10 million in debt and equity this
year to fund its expansion.
Last week it moved to secure a supply of the portable swabbing units it uses
to produce oil, acquiring a 20 percent interest in the equipment maker,
privately owned <Oil Retrieval Systems Inc>, in exchange for 3 million Oilex
shares, he said.
As part of the acquisition, Oilex said in an annoucement of the transaction,
the company has a 30 day preferential first right of refusal on all units Oil
Retrieval builds on speculation for a period of three years.
The agreement also gives Oilex input on design for maximum engineering and
field utilization of each unit, it said.
At the time, Oilex said Oil Retrieval also acquired a 25 percent working
interest in the Revilo Unit in exchange for providing a minimum of three
portable swabbing units.
Oilex said it also placed an order for a minimum of five additional units to
be built in 1997 with the first delivery expected delivery in April.
With these units, Burditt said, the company's lifing cost is $2.50 per
barrel of oil compared to $8 per barrel with normal swabbing methods. |
