CAVU Resources, Inc. Announces The Acquisition Of A New Saltwater Disposal Site And Cancels Its Application In Garvin County.
TULSA, Okla., Sept. 4, 2012 /PRNewswire/ -- CAVU Resources, Inc. ("CAVU"), which trades as OTC: CAVR.PK, announced today that the owners and management of FILO SWDW#1 LP, ("FILO") in which CAVU has approximately 40% ownership, has acquired a new disposal location. The economic and logistical advantages to this new location eliminate the need for the commercial disposal well in Garvin County.
FILO has requested that CAVU Energy Services, Inc. ("CAVU Energy") the operator withdraw its application for the well. CAVU Energy is also withdrawing the application for the 30,000 barrel a day private disposal well to focus on the opportunities in Kansas. The citizens of Garvin County raised many issues as to location of the well, economics and potential taxpayer liabilities. While the company believes it completely answered the issues of citizens, it believes that the leaders of the protesters – Mr. Joe Menefee and Mr. Ian Ogilvie - are trying to protect their family legacy, livelihood, and the safety of citizens of Garvin County and call attention to what they believe to be a threat to their water supply. The Garvin county commissioner, Mr. John Mann, also showed great concern to protect his constituents with his statements on the $1.3 million dollar estimated obligations that FILO may assume relating to the pre-use upgrade of the county roads and possible increased insurance and bonding cost that was brought up that would have further reduced the estimated economic returns to FILO.
In the Oklahoma Corporation Commission hearing, the operator of the well, CAVU Energy showed the safety features, automated controls and multiple protection dikes that would have reduced any environmental threat and flood danger to a minimum. Professional witnesses agreed that the design and voluntary monitoring sensors, containment safety features and proposed air, earthquake and water monitoring were all in excess of any requirement set forth by the Oklahoma Corporation Commission for approval of its application.
The management of FILO has weighed all of the options and have located and purchased another site on Highway 75 in the highly prolific Mississippi Chat play in Southern Kansas. Currently, several drilling programs are underway in Southern Kansas, with major oil and gas companies are projecting over the next three years drilling wells far in excess of the estimated current and future production in Garvin County. All of the saltwater treatment equipment currently on the Chisholm site, owned by FILO will be moved to Kansas. The facility in Kansas has an existing disposal well drilled to the same proposed formation as the Garvin site, the vast Arbuckle zone. With a well already in place and existing processing equipment on site, the well can be reworked and the new equipment already owned by the FILO can be installed in operation in less than 120 days.
The FILO Saltwater Disposal Well #1 was originally proposed to allow for expansion of the oil and gas opportunities in the immediate area around the CAVU lease. The company researched the demand and total barrels of disposal that had been permitted in the area. The 50,000 barrel per day permit was designed to replace the current and projected future demand for commercial disposal wells in Garvin County and future estimated development on the CAVU lease with what was believed to be one of the safest facilities in the state. CAVU already owns an existing disposal well on the property, and plans to install new clean water technology that will recycle the produced saltwater to a fresh water state that will then allow the development of its remaining wells. CAVU also recently met with Oklahoma Corporation Commission field inspectors and did a thorough inspection of all of its existing wells on the Chisholm lease and is complying with voluntary actions in the next 10 days to remedy any perceived issues.
During testimony it was stated by the Protestants that one of the original wells on the property that CAVU acquired was thought to have parted casing. Even though this was not proven to present a possibility of saltwater contamination or any threat to the ground water in the area, CAVU has voluntarily agreed to plug the well to alleviate community fears. The degree of citizen investigation focused on CAVU represents a new level of scrutiny and obstruction for oil and gas operators wishing to do business in Oklahoma. Such obstruction has a way of transferring needless costs to a new project's bottom line. The company believes that their latest business decision not only eliminates any future issues with the citizens of Garvin County but will be an economic gain to the company and provide much needed jobs and tax revenues to the surrounding communities in southern Kansas where the new facilities will be located.
"CAVU Energy originally filed this permit to protect our shareholders' investment in this property and provide an additional economic benefit from what we believed to be a safe alternative to what currently was in use in Garvin County. CAVU knew the tax revenue and new job opportunities would have benefitted Garvin County. However, the time delay through appeals and additional costs that would come with operating the well and the threats to environment perceived by the Protestants would have made this a confrontational issue in the community for a long time.
We want to be good stewards of the land and benefactors to the community of Garvin County so we voted along with the rest of the FILO management to purchase the new site and to move the facility. The new site already has an Arbuckle well drilled and the first phase of the facility built and ready for operations. Further due diligence of the site has located it on a major highway away from any residences and or water supplies.
The major drilling programs that have started in the Kansas area are producing large quantities of saltwater and have an immediate need that exceeds our projections in Garvin County. The timing and long term potential of this area should provide the investors with revenues from this decision before the end of the year." stated William Robinson, CEO and President of CAVU Resources, Inc.
About CAVU Resources, Inc.
During World War II, Navy fighter pilots would look up at the sky and if it was a "CAVU" day then it meant ceiling and visibility unlimited. The pilots believed they would have unobstructed flying allowing them to see their targets quicker, identify the obstacles they needed to overcome, giving them a greater chance of success. The founders of CAVU Resources, Inc. chose the name CAVU because they believe that the company will be the embodiment of its name.
CAVU was formed with the goal of becoming a recognized regional player in the independent oil and natural gas industry by growing the company's oil and natural gas reserves. CAVU is a natural resource company engaged in the acquisition, exploration and development of oil and natural gas properties. The Company operates in the upstream segment of the oil and gas industry with planned activities including the drilling, completion and operation of oil and gas wells in Oklahoma, Kansas, Colorado, Montana and Texas. The Company has acquired leases and is currently exploring additional opportunities in oil and gas leases.
CAVU's minority owned operating subsidiary, CAVU Energy Services, Inc., a licensed Oil and Gas Operating Company, manages the company's properties in Oklahoma and plans to operate targeted leases in Kansas, Colorado, Montana and Texas. The company will utilize its own operating equipment and with strategic partners provide contract drilling, fracture stimulation and directional drilling services to oil, natural gas exploration and production companies. CAVU plans to expand operations not only in the traditional Oil and Gas business, but also to invest in technology, waste disposal, Geo-Thermal, solar and wind, taking advantage of the changing environment and in the world's need for new, green and innovative resources. More information is available at the company's website at http://www.cavu-resources.com.
Cautionary note: This report contains forward-looking statements, particularly those regarding cash flow, capital expenditures and investment plans. Resource estimates, unless specifically noted, are considered speculative. By their nature, forward-looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to U.S. investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.
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SOURCE CAVU Resources, Inc.