Victory Energy CEO Kenny Hill said the company has started drilling operations on Chapman Ranch and Pinetop prospects.

"The Company now holds 10,859 gross acres with the potential to drill an estimated 45 gross wells," Hill added.

The company has spud the first test well in the Pinetop prospect located at the Lea County, New Mexico and depending on the result Victory Energy will spud eight more wells on the acreage.

Victory is estimating that a successful well in the Pinetop prospect has the potential of potential of around 420,000 barrels of oil equivalent (BOE) and IP rate of about 330 BOE per day (approximately 86% oil, 14% natural gas) to the 100% working interest.

Victory Energy expects drilling to the 11,700 feet target depth will take about four weeks to complete.

The company acquired 4% before payout working interest in the initial well and 3% After Payout (APO) and the other wells will be drilled at the APO working interest.

Victory Energy has successfully drilled the first of two planned wells on the Chapman Ranch prospect located at the Nueces County, Texas, to a depth 8,010 feet, and has run triple combo logs which have the targeted multiple pay zones.

The company has also analyzed the core samples and has started the completion operations to test for commercial flows, following which the second well will be drilled.

Victory owns a 5% working interest in the prospect.