HOUSTON, May 17, 2016 /PRNewswire/ -- Virtus Oil and Gas Corporation (OTCBB: VOILD) ("Virtus" or "the Company") and one of its wholly owned subsidiaries recently completed and executed a Letter Agreement with Kansas Alliance Resources, LLC to acquire ten (10) net mineral acres in Weld County under a producing well; and with BYA Energy, LLC to acquire a five percent (5%) working interest and one percent (1%) overriding royalty in Hitchcock County, Nebraska.
The Grant Hurt 1A-14H G268 well operated by Encana Oil & Gas (USA) Inc is located in the Wattenberg Field inside the DJ Basin in Sections 11 and 14, T2N R68E 6th PM, Weld County, Colorado. The main producing zone in the oil fields is the multiple Niobrara targets, Codell, Sussex, Shannon and deeper J Sand formations. Encana completed this horizontal well in the Codell formation at a depth of 7,400ft and the lateral leg being a length of 6,886ft. The well was completed in April of 2015 and has a cumulative oil of 60,960bo and over 253,448 cumulative of gas (April 2015-February 2016). Encana has already submitted and been approved permits and spacing units to drill an additional twelve (12) horizontal Niobrara B, Niobrara C and Codell wells that would include the company owned minerals.
The Hitchcock County, Nebraska acreage is a five percent (5%) working interest and a one percent (1%) overriding royalty on the 5,108.42 gross acres. The acreage currently has two producing wells the Golding 1-4 and Golding 1-5 currently operated by Central Operating Inc. The wells are located at Sections 4 and 5 of 1N-35W. These shallow wells were drilled and completed in late 2014/early 2015 at a depth of near 4,000-4,250ft and producing from the Lansing-Kansas City Formation. The straight vertical wells were drilled after high targets were identified from an extensive 3D seismic program running over the entire prospect. Virtus Oil and Gas has acquired the rights to the 3D Seismic. The operator being successful in drilling two producing wells has initiated a drilling program to commence when oil prices climb. The 40-acre spacing means the 5,108.42 gross acres has the potential to fit up to 120 vertical wells within the prospect.
The terms of the Letter Agreement dated April 26th, 2016 but with an effective date of February 1, 2016 states the terms of consideration to be Virtus Oil and Gas delivering to Kansas Alliance/BYA Energy: Five Million (5MM) Shares of VOIL Common Stock (Using Value of $0.02) at a Value of $100,000.00. Kansas Alliance/BYA Energy delivered the last two months' revenue with it being just over six thousand dollars which reflects oil prices being at a decade low price. The Grant Hurt well alone has produced over $63k paid alone to the mineral owner since inception.
Rupert Ireland, CEO of Virtus, said: "These acquisitions are not only of vital importance to the development of Virtus Oil and Gas going forward, but also bring in some much needed revenue. Virtus Oil and Gas enters into one of the top producing basins (DJ Basin) in the lower 48 states and now has future drilling locations that are offset producing wells. My COO and his team spent many weeks evaluating and vetting the best options for Virtus Oil and Gas and were fortunate enough to discover revenue driven deals which will not only satisfy our shareholders, but hopefully build a great future for us all."
Brett A. Murray, COO of Virtus, said: "The DJ Basin in Northern Colorado has been and continues to be an active play as the infrastructure is in place to deliver a product at a lower cost to the operator compared to other basins. The upside of owning minerals is there is zero capital needed to participate with Encana and worries of us being able to participate with these large horizontal wells when oil recovers. The Husker Prospect brings us shallower and also economically friendly wells that we can put into our portfolio when oil prices recover. The de-risking on this prospect has been achieved with last two wells drilled based on the analysis of the 3D Seismic data and keeps our focus away from any wildcat plays."
About Virtus Oil and Gas Corporation
Virtus Oil and Gas Corp. (VOIL) is a Houston-based oil and gas exploration and production company currently focused on producing assets in the State of Colorado, Nebraska and Utah. The Paradox Basin has significant oil and gas producing wells with extensive infrastructure. Further Reading on Paradox Basin: http://pubs.usgs.gov/fs/2012/3031/FS12-3031.pdf. The DJ Basin has great history of both oil and gas producing fields. http://www.naturalgasintel.com/niobraradjinfo
This news release may contain "forward-looking" statements. These forward-looking statements are only predictions and are subject to certain risks, uncertainties and assumptions that could cause actual results to differ from those in the forward looking-statements. Potential risks and uncertainties include such factors as uncertainty of consumer demand for the Company's products, as well as additional risks and uncertainties that are identified and described in the Company's SEC reports. The company will need to raise additional financing in order to advance its exploration and drilling program. Actual results may differ materially from the forward-looking statements in this press release. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company does not undertake, and it specifically disclaims, any obligation to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.
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SOURCE Virtus Oil & Gas Corp.