NEW ORLEANS, Sept. 19, 2013 /PRNewswire/ -- Treaty Energy Corporation (OTCQB: TECO) (http://www.treatyenergy.com), a growth-oriented international energy company, today announced that the Company has signed contracts to begin drilling two self-funded and already permitted wells in Tuscola, Texas. Drilling is expected to begin as early as Saturday, September 21, 2013 but may begin as late as Wednesday, September 25, 2013.
On June 28, 2013, Treaty Energy acquired a working interest on the Stockton lease from U.S. Fuels, Inc. of Breckenridge, Texas. This working interest included a 75% net revenue interest (NRI) and a 100% working interest (W/I). The remaining 25% NRI is dedicated to existing overriding royalty interests (ORRI).
On July 17, 2013, the Company announced it had completed survey work and were solidifying plans to drill two offset wells from the Mitchell lease on the Stockton lease. Requests for drilling permits were filed approximately two weeks after survey work was completed. The Company received permitted approval to drill the two wells on August 6, 2013 from the Texas Railroad Commission (TRRC).
The Company finalized and signed contracts on September 11, 2013 to begin drilling the two planned wells on the Stockton lease. As previously announced, the Company has sought no partners on the project and will be completely self-funded. The Company's self-funding grants 100% of the 75% NRI as revenue for the Company.
Due to proximity and same field geology, initial production numbers and estimated production rates are expected to be similar to the Mitchell #4 well, which received an initial production rate of 61 barrels of oil per day (BOPD) and an announced production rate of 45-50 BOPD. Both wells will be drilled to an approximate depth of 4800ft and will be drilled sequentially. Based on the Mitchell's production rates, the Stockton wells combined are expected to bring in approximately $205,000 in revenue within thirty days of completion.
As part of the Stockton lease development, the Company recently purchased the Stockton #1 well. The strategic Stockton #1 purchase reduced the capital needed to begin work on the project by supplying an existing oil and gas infrastructure, namely the tank batteries and water separators. Both of these were recently repaired by the Company in order to remove the Mitchell #1 from severance.
The Company plans to complete site preparations by the end of this week and will begin drilling shortly thereafter. The exact start date is dependent on the completion of another scheduled drilling project and completion of the site preparations. Well operations and drilling oversight on the Stockton lease will be handled by David Jakobot of U.S. Fuels, Inc.
Andrew Reid, Chief Executive Officer of Treaty Energy, stated, "The Company is excited to begin the Stockton project and shareholders should be excited as well. The Stockton project will continue to move the Company closer to cash flow positive status and will provide us with more capital to start new projects and revamp existing operations. Initial revenue from the Stockton wells will be used to return to the Madeley 'F', Lakeshore and Hill leases in East Texas."
Treaty Energy Corporation
About Treaty Energy Corporation
Treaty, an international energy company, is engaged in the acquisition, development and production of oil and natural gas. Treaty acquires and develops oil and gas leases which have "proven but undeveloped reserves" at the time of acquisition. These properties are not strategic to large exploration-oriented oil and gas companies. This strategy allows Treaty to develop and produce oil and natural gas with tremendously decreased risk, cost and time involved in traditional exploration.
Treaty Energy Corporation (TECO) trades on the OTCQB, the marketplace for companies that are current in their SEC reporting requirements. Investors can find Real-Time quotes and market information for Treaty Energy at http://www.otcmarkets.com/stock/TECO/quote
Statements herein express management's beliefs and expectations regarding future performance and are forward-looking and involve risks and uncertainties, including, but not limited to, raising working capital and securing other financing; responding to competition and rapidly changing technology; and other risks. These risks are detailed in the Company's filings with the Securities and Exchange Commission, including Forms 10-KSB, 10-QSB and 8-K. Actual results may differ materially from such forward-looking statements.
SOURCE Treaty Energy Corporation