BHWX owns 100% of the leases within the prospect area and has an undivided 81.5% working interest in and to the oil and gas leases and their previous 10 shut-in oil and gas wells.
The lease acquisition includes a 100% interest in one shut-in oil/gas well, the #1 Baker, located on the Keith Baker lease. The purchase also consists of a 100% interest in nine other oil wells previously shut- in.
Black Hawk’s Oil 2011 program calls for re-working all 10 locations directly or in joint venture with Tiger Oil and Energy (TGRO) and returning all of them to cash flow production.
On 27 October 2010, Black Hawk entered into a co-development agreement with TGRO in which, after an investment of $400,000 by TGRO in a new well in Black Hawk’s Cowley County lease, TGRO will earn a 40% working interest in the # 1 Baker well, BHWX will receive a 50% interest in the new well and TGRO will have the right to participate in the nine well rework program at the Cowley Prospect.
BHWX will receive a 20% interest in any other new well TGRO drills on Black Hawk’s current or future Cowley County, Kansas leases and has the option to invest in each additional new well drilled by TGRO on a prorated basis up to an additional 30%.
In addition to the acquisition, Black Hawk Exploration entered into an agreement with Tiger Oil & Gas LLC, a Kansas limited liability company.
In the agreement, BHWX purchased oil and gas leases within Cowley County and Tiger LLC agreed to operate and participate in the development and exploration of additional oil and gas leases on behalf of BHWX.
