AUSTIN, Texas, April 30, 2013 /PRNewswire/ -- Victory Energy Corporation (OTCQB: VYEY), an independent, growth oriented oil and gas company, today provided a drilling operations update on key properties for Aurora Energy Partners ("Aurora") which the Company manages and in which it owns a 50 percent interest.
Three new wells have been placed on production since the beginning of the year: Cotter #1 (Lightnin'), Morgan #1 and University 7 #1 (Bootleg Canyon). Since April 1, cumulative daily production from these three wells has averaged a net 16 barrels of oil equivalent (BOE) per day (75% oil) to Aurora's interest. The Company estimates total current net daily production to be 48.7 BOE per day, representing a 49% increase over the average daily production for 2012. Two additional wells on the Uno-Mas property, Hickory 14 State #1 and Milan 12 State #1 have been successfully drilled and completed. These wells are currently being brought into production.
"In our January market update, the Company announced that five of its Permian Basin properties had wells that were in some stage of development, drilling or completion and that the most impactful of these, Cotter #1 offered the greatest immediate and strategic path to improve cash-flow and proved reserves," said Kenny Hill, Victory Energy CEO. "I'm pleased to announce that the Cotter #1 well has been in production since March 27th. Current flow rates support a rate of cash-flow that is greater than the company produced in all of calendar year 2012. On this single property, there are at least seven additional well locations, each offering an estimated 128,000 gross barrels of oil equivalent (BOE), for an estimated total gross yield of 1,024,000 BOE (192,000 net). The Company plans to drill two additional wells on this property in 2013. With the combination of higher working interest, the multi-pay stacked formation opportunities provided, low well costs and the production type curve available, the Lightnin' property is considered a model for all future acquisitions targeted in the prolific Permian basin of Texas and New Mexico. 2013 has started out as our most successful drilling and completion year to date. "
The Company, through its partnership with Aurora Energy Partners, now has 24 wells on production to sales and 2 wells that have been successfully completed and are being brought into production. The producing portfolio of assets now includes the Lightnin' property, the Bootleg Canyon Ellenberger Field, the Adams-Baggett Gas Field, the Morgan property, the Uno-Mas property and the Clear Water Wolfberry resource play. Proved commercial accumulations of hydrocarbons now occur in multiple horizons, at depths ranging from 4,700 to 13,100 feet with the majority of Proved reserves being located on properties in the prolific Permian basin of Texas and New Mexico.
As the Company continues to drill available locations on its current properties and add properties that are accessible to the Company through its established deal flow pipeline, it anticipates an accelerated pace toward oil-weighted production and the addition of new reserves.
The Lightnin' Property, Glasscock County, Texas
In March 2012, the Company, through its partnership with Aurora Energy Partners acquired a 75% working interest and a 56.25% net revenue interest in 320 gross acres known as the Lightnin' Property. This property is located in the very active Permian Basin resource play known as the Wolfberry. In January 2013, the Company farmed out 50% of its working interest and selected an operator for the prospect. The Company now holds a 25% working interest and an 18.75% net revenue interest in the project. The first well, the Cotter #1, was spud in January 2013, completed in February and brought into production in late March. The Lightnin' property holds at least seven additional well locations, each offering an estimated 128,000 gross barrels of oil equivalent (BOE), for an estimated total gross yield of 1,024,000 BOE (192,000 net). The Company plans to drill two additional wells on this property in 2013. There were no proved reserves associated with this property in the Company's reserve report for the period ended December 31, 2012.
The Bootleg Canyon Property, Pecos County, Texas
The Company, through its partnership with Aurora Energy Partners owns a 5% working interest and a 3.75% net revenue interest in 5,000 gross acres known as the Bootleg Canyon property. The first well on this property was drilled in June of 2011. At the end of 2012 there were two producing oil wells on the property. A third well, University 7 #1 was successfully completed as a gas well in early 2013. There are two proved producing wells and one PUD well location in the Company's reserve report for the period ended December 31, 2012. Additional well locations are being evaluated for drilling in 2013.
The Morgan Property, Martin County, Texas
In November 2012, the Company, through its partnership with Aurora Energy Partners acquired a 3% working interest and a 2.25% net revenue interest in 80 gross acres known as the Morgan Property. This property is located in the Permian Basin Wolfberry Play. The first well, Morgan #1 was spud in December 2012 and reached total depth (10,616 feet) in January 2013. The Morgan #1 was fracture stimulated and completed in March 2013. The well is currently producing both oil and gas while the frac fluids are being unloaded. There are two PUD well locations included in the Company's reserve report for the period ended December 31, 2012.
The Uno-Mas Property, Lea County, New Mexico
In September 2011, the Company, through its partnership with Aurora Energy Partners, acquired a 10% working interest and a 7.5% net revenue interest in 320 gross acres known as the Uno-Mas Property. In December 2011, the Company successfully completed the Uno-Mas #1 re-entry well in the Mississippian formation. The well is currently producing oil and gas to sales.
In 2012 the Company entered into a farm-in agreement with another operator covering the shallower formations on the Uno-Mas Property. In exchange for the mineral rights, the operator has agreed to drill four wells. The Company will be carried through the tanks on the first two wells and then will be given the opportunity to participate on a heads-up basis on the next two. Two of these wells (Hickory 14 State #1 and Milan 12 State #1) have been successfully drilled and completed. These wells are being brought into production.
Under the farm-in agreement the Company owns a 1.25% carried working interest and a .9375% net revenue interest in the first two wells. This reverts to a 2.5% working interest 1.875% net revenue interest once the wells payout.
Please note that Victory Energy intends to use its website, www.vyey.com, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Such disclosures will be included on the Victory Energy website in the "Investor Relations" section. Accordingly, investors should monitor such portions of the Victory Energy website in addition to following press releases, SEC filings and public conference calls and webcasts.
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About Victory Energy Corporation
Victory Energy Corporation (OTCQB: VYEY) is an independent, growth oriented oil and gas company engaged in the acquisition, exploration and production of oil and natural gas properties through its partnership with Aurora Energy Partners. The Company's objective is to create long-term shareholder value by increasing oil reserves, improving financial returns (higher production volumes and lower costs), and managing the capital on its balance sheet.
Victory is geographically focused onshore, with a primary focus in the Permian Basin of Texas and southeast New Mexico. The Company leverages both internal capabilities and strategic industry relationships to acquire working interest positions in low-to-moderate risk oil and gas prospects.
Its focus is primarily on oil or liquid-rich gas projects within longer-life reservoirs that offer competitive finding and development (F&D) costs per barrel of oil equivalent (BOE).
Download the Investor Fact Sheet for current summary of projects and activity. Victory Energy is current with its SEC filings and is a full reporting company. The Company is traded under the ticker symbol VYEY on the OTCQB tier, operated by OTC Markets Group.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Company based on management's experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be appropriate and reasonable by management. When used in this press release, the words "will," "potential," "believe," "estimated," "intend," "expect," "may," "should," "anticipate," "could," "plan," "project," or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Among these forward-looking statements are statements regarding EURs, estimated BOE, estimated future gross undiscounted cash flow and estimated drilling and completion costs. Such forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements, including but not limited to, changes to drilling plans and schedules by the operators of prospects, overruns in costs of operations, hazards, delays, and any other difficulties related to drilling for and producing oil or gas, the price of oil, NGLs, and gas, results of marketing and sales of produced oil and gas, estimates made in evaluating reserves, competition, general economic conditions and the ability to manage and continue growth, and other factors described in the Company Annual Report on Form 10-K/A for the fiscal year ended December 31, 2011 and any updates to those risk factors set forth in the Company's Quarterly Reports on Form 10-Q. Further information on such assumptions, risks and uncertainties is available in the Company's other filings with the Securities and Exchange Commission ("SEC") that are available on the SEC's website at www.sec.gov, and on the Company's website. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
Victory Energy Corporation
Kenny Hill, CEO
Dennard-Lascar Associates, LLC
Ken Dennard / Ben Burnham
SOURCE Victory Energy Corporation