Current production has been increased from 115 bbl per day in October 2009, when the original agreement to acquire was signed, to approximately 150 bbl per day. Production from these oilfields is subject to weather conditions and can vary plus or minus 20% during the months of December, January and February.
The Treaty Energy transition team will meet the previous operators, the company’s new operator and petroleum reservoir engineer in mid-January to arrange for an orderly transition to the new Treaty Energy operating team on February 1, 2010.
Following the transition, the company expects to increase production on these leases by approximately 20% through maintenance on the 481 producing wells and by increasing the use of water flooding on areas where this production improvement method has not yet been utilized. Based on the knowledge, experience and expertise of the reservoir engineer and consultants under contract, Treaty Energy expects production will double within 12 to 18 months.
Additionally, Treaty Energy plans to expand its Kansas and Missouri holdings by acquiring other leases that run adjacent to the acquired 6,700 acres, providing additional production and drilling opportunities, along with increased reserves.
Randall Newton, CEO of Treaty Energy, said: “Working with the sellers of the Kansas and Missouri leases has been a very positive experience. They’ve provided a vast wealth of experience and knowledge and we’re pleased they’ve agreed to stay on as consultants to Treaty Energy and our new operations team over the next few years.
“This consulting agreement will provide us a number of avenues to follow regarding the expansion of acreage and reserves with the goal of increasing production above our estimates from the initial 6,700 acres.”
