Avalon will increase its current interest in the Grace-2 well and acquire working interests in four other producing wells in the East Chandler Field, the Grace-1, Grace-3, Grace-5A and Grace-6 wells. Avalon initially acquired a working interest in the Grace-2 well in June 2008.
Avalon is increasing its working interest in the Grace-2 from 2.5% to 7.5%; and increasing its net revenue interest in the Grace-2 to 11.95%. Avalon is also acquiring interests in four additional wells in the East Chandler Field.
The company is acquiring a 10% working interest and 13.825% net revenue interest in the Grace-1, Grace-3, Grace-5A and Grace-6 wells.
Avalon is also acquiring a salt water disposal well, and offset and development acreage in the two quarter sections of the East Chandler Field. In this transaction, Avalon will acquire total reserves of 90,000 barrels of oil and 559 million cubic feet of gas.
Kent Rodriguez, CEO of Avalon, said: We are extremely pleased with this expansion of our ownership in the Grace-2 and newly acquired interests in the four other producing wells in the East Chandler Field. This acquisition will increase our revenues nearly three-fold. Avalon will continue to expand our ownership in these wells in the coming months.
