Viking Investments Group has announced that its wholly-owned subsidiary Mid-Con Petroleum has entered into an agreement to drill new wells on one of its existing oil leases in Eastern Kansas.
The agreement, effective December 30th, 2016, contemplates Mid-Con assigning a small portion (i.e. 2%) of its working interest in the ABC lease, located in Miami County, to an individual investor in exchange for the investor contributing capital to facilitate the drilling and completion of 6 to 7 new producing wells on the lease. Viking will retain a 93% working interest in the lease.
The investor will receive one hundred percent of the tax credits available in connection with the drilling investment. The agreement is conditional upon approval of Mid-Con's senior secured lender, CrossFirst Bank, releasing its security against the 2% working interest to be assigned to the investor.
Funds to cover the associated costs (approx. $150,000) have already been deposited by the investor and will be released upon the assignment being approved by the bank.
Mid-Con's operator, S & B Operating, LLC ("S&B"), will coordinate and supervise this development initiative. S&B is a subsidiary of Kansas Resource Development Company, and specializes in formulating and operating water-flood enhanced oil recovery programs.
The ABC lease represents one of Mid-Con's most prolific assets and these new wells are expected to significantly increase the company's oil production from the lease in the near term. The wells will be drilled at a depth of approx. 350 feet targeting the Peru formation. Wells similar to those to be drilled on this lease have demonstrated the ability to produce for 20 – 30 years.