Otis Energy acquires Texas Horizontal Drilling Project covering over 6000 acres with initial well to spud first week of April

Wednesday, March 28, 2012
  • The Comanche Project will target the Marble Falls Limestone formation at approximately 5,000 feet.

Otis Energy Limited (ASX: OTE) announce the acquisition of a 12.5% Working Interest (9.375% NRI) in the 'Comanche Project' located in North Central Texas. The Comanche Project will target the Marble Falls Limestone formation at approximately 5,000 feet.

About the Comanche Project;

The Comanche Project is a shallow horizontal oil development play analogous to recent discoveries nearby. The project targets the Pennsylvanian (Morrowan) Marble Falls Limestone (MFL) a micro-fractured carbonate on the western margin of the Fort Worth Basin. To date over 6,000 acres have been leased representing two separate project areas under the Comanche Project - Nocona and Quanah.

The first well on the Comanche Project will test the Marble Falls Limestone formation at a total depth of approximately 5,100' TVD (1,554 metres) and drill 2,500' (762 metres) horizontal lateral. The first well at Comanche is expected to spud in the first week of April 2012. Typical completed vertical wells in the area range from 40-50,000 barrels of oil equivalent (40-50 MBOE) total recoverable reserves per well. Horizontal drilling and enhanced completion operations are expected to materially increase the production rates and recoverable reserves as evidenced by recent horizontal wells drilled in the area which have produced in excess of 300-400 bopd.

Production, from successful wells, is expected to be crude oil with associated high Btu gas. The Operator of the Project is a fully staffed, private exploration and production company with primary operations along the Upper Gulf Coast of Texas. It has been operating for over 12 years and currently operates 41 producing wells.

Terms

Otis will pay $437,500 for reimbursement of costs for leasing acreage, geology, geophysical and engineering work. In addition Otis will fund 16.67% WI (12.5% NRI) before payout on the first two wells drilled at Comanche.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More

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