American Petro-Hunter has revealed the company's 2010 development plan for the Rooney Oil and Gas Project in Kansas. The 24-1 Double H well is moving forward with the start of commercial oil and gas production currently slated for January 1, 2010. The assembly of surface facilities including a large tank battery, pump-jack and installation of oil and gas lines is moving ahead as planned.
The company and operating partners plan to drill 10 wells in the upcoming year. The first offset development well is scheduled to spud on January 25 and following that, one additional well each successive month. This represents a $2.5m investment by the company which, if production rates are as anticipated, will be returned through revenue and cash flow on a very short payback, the company said.
A review of the Rooney engineering and seismic data has indicated that the newly discovered oil and gas reservoir has a potential aerial extent that exceeds in acreage the size of existing oil fields in the area that have produced in excess of 2.5 million barrels. If the company drills 10 wells, and should the entire seismically indicated target prove productive, Rooney has the potential to develop into a field containing approximately 3 million barrels of oil based on this comparative analogy.
In order to properly value the Rooney project, the ongoing development plan will include third party independent reservoir engineering. It is the aim of the company to establish, as soon as possible, the Proved Developed Producing (PDP) and Probable Undeveloped Producing (PUD) engineering report. The report will be critical in putting a valuation on any and all reserves established by the #24-1 Double H and future wells.
The Rooney project is located in southwestern Ford County, Kansas 20 miles due south of Dodge City and totals 5,120 acres adjacent to the north edge of existing Morrow Sand oil and gas production. The initial discovery well, #24-1 Double H is anticipated to begin production at rates over 200 barrels per day.
After a review of the 3D seismic data in conjunction with the electronic logs, the potential barrels of oil associated well and oil pool is currently estimated at 500,000 barrels. The company and partners have developed a minimum of five target locations to drill that could enable the company to add five additional wells to its portfolio by the end of the third quarter of 2010. The operator of the project is S&W Oil & Gas of Wichita, Kansas.