SAN ANTONIO, Feb. 7, 2012 /PRNewswire/ -- Cross Border Resources, Inc. (OTCQX: XBOR) ("Cross Border" or "the Company"), a San Antonio-based oil and gas exploration and production company, today announced positive well results on the SE LUSK 33 #3H well, targeting the 2nd Bone Spring, and reported its oil focused strategy led to a significant increase in value to its year-end 2011 proved reserves.
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The SE LUSK 33 #3H Well – 2nd Bone Spring
Cross Border owns a 37.5% working interest and 29.1% net revenue interest in the Cimarex Energy, Co. ("Cimarex") operated SE LUSK 33 #3H well that was successfully completed on January 24, 2012. The well recorded a peak 24-hour production rate of 1,173 barrels of oil equivalent per day ("BOEPD"), or 997 barrels of oil and 1,057 thousand cubic feet of gas. The well has been producing for two weeks and is still cleaning up and flowing back the frac load at over 500 psi on a 34/64 choke, without the aid of artificial lift.
Additionally, Cross Border and Cimarex have reached total depth on the SE LUSK 33 Fed #2H, the immediate offset to the #3H well, and are now awaiting completion. Cross Border has a 37.5% working interest in this 2nd Bone Spring test with Cimarex acting as the operator.
Larry Risley, President and COO of Cross Border, said, "We are very satisfied with these early results from the 2nd Bone Spring well. The 85% oil cut from the production stream significantly complements our oil-focused strategy. Furthermore, we intend on reporting additional production results once the 33 #3H has been online for 30 days as well as sharing the initial production rates from the 33#2H as they become available."
2011 Proved Reserves
The Company's estimated proved reserves at December 31, 2011, were 2.1 million barrels of oil equivalent ("MMBOE") with an associated PV-10 value for its proved category of approximately $44.8 million. This represents a 261% increase from Cross Border's previous PV-10 of $17.1 million as of the period ending July 31, 2010.
The combined Proved, Probable and Possible reserves are estimated at 2.9 MMBOE with a combined resource PV-10 value of approximately $56.6 million. The reserves estimates were provided by Joe C. Neal & Associates, a third-party reservoir engineering firm based in Midland, Texas.
Cross Border's Reserves at January 1, 2012 |
||||||
Net Reserves to Evaluate Interests ($ thousands) |
Proved Developed Producing |
Proved Developed Non-Producing |
Proved Undeveloped |
Probable |
Possible |
Total |
Oil (thousand barrels) |
355 |
173 |
1,180 |
356 |
138 |
2,202 |
Gas (million cubic feet) |
1, 084 |
508 |
793 |
751 |
824 |
3,960 |
Future Net Revenue Before Ad Valorem/Severance Taxes |
$37,462 |
$18,417 |
$107,261 |
$33,877 |
$17,867 |
$214,884 |
Ad Valorem and Severance Taxes |
$2,695 |
$1,316 |
$7,652 |
$2,423 |
$1,279 |
$15,365 |
Operating Costs |
$8,827 |
$1,961 |
$14,700 |
$3,932 |
$2,100 |
$31,520 |
Capital Cost |
0 |
$771 |
$25,197 |
$8,528 |
$7,355 |
$41,851 |
Future Net Revenue, Undiscounted |
$25,940 |
$14,369 |
$59,713 |
$18,993 |
$7,134 |
$126,149 |
Discounted per Annum at 10% (PV-10) |
$17,435 |
$6,735 |
$20,692 |
$8,446 |
$3,305 |
$56,613 |
Everett "Will" Gray II, CEO and Chairman of Cross Border, stated, "With a successful 2011 behind us, Cross Border will focus on drilling our oil assets with industry-leading operators during 2012. The operational success experienced in the last several months is driving growth in oil reserves and production volumes that are beginning to be reflected in our PV-10 values. With the successful SE LUSK 33 #3H well and other 2nd Bone Spring wells in various stages of drilling and completion, the Company is positioned to deliver record reserves and production growth to shareholders in 2012."
About Cross Border Resources
San Antonio, Texas New Mexico West TexasAdditional information about the Company is available on its website, www.xbres.com, and news updates are available via Twitter, @CrossBorderRes.
Forward-Looking Statements
Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include misinterpretation of data, inaccurate estimates of oil and natural gas reserves, the uncertainty of the requirements demanded by environmental agencies, the Company's ability to raise financing for operations, breach by parties with whom the Company has contracted, inability to maintain qualified employees or consultants because of compensation or other issues, competition for equipment, inability to obtain drilling permits, potential delays or obstacles in drilling operations and interpreting data, the likelihood that no commercial quantities of oil or gas are found or recoverable, and our ability to participate in the exploration of, and successful completion of development programs on all aforementioned prospects and leases. Additional information risks for the Company can be found in the Company's filings with the U.S. Securities and Exchange Commission.
Contacts:
Investor Relations Contact:
Jon Cunningham
RedChip Companies, Inc.
Tel: +1-800-733-2447, Ext. 107
[email protected]
http://www.redchip.com
Company Contact:
Cross Border Resources, Inc.
Everett Willard "Will" Gray II
[email protected]
SOURCE Cross Border Resources, Inc.
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