These assets are located in the San Andres play on the Northwest Shelf of the Permian Basin situated in eastern New Mexico and are contiguous with the Company’s Chaveroo field acquired in September 2018. The acquisition includes one producing horizontal well and several wells capable of producing that, with some remedial work, are expected to increase production from this asset to above 100 BOPD, as well as a salt water disposal well capable of satisfying the acquired asset’s intermediate-term development needs. Following closing, the Company plans to commence drilling a new horizontal well on this acreage before March 1, 2019 to satisfy a unit agreement, with results anticipated to be announced in Q2 2019.
The Company also announced today that it has reached total depth (TD) on the first four wells of its anticipated 16 horizontal well program in its Permian Basin asset and anticipates completing all four wells by the end of the Q1 2019, with initial results expected to be announced in early Q2 2019.
In addition, the Company is pleased to report that it has closed on $15 million in convertible debt funding from SK Energy LLC, an investment firm owned by Dr. Simon Kukes, the Company’s Chief Executive Officer, which debt is convertible into common stock of the Company at a fixed price of $1.50 per share. The Company intends to use the proceeds to complete the four new wells on its existing Permian Basin acreage, to fund the well to be drilled on the new acreage acquired as described above, and to fund Company operations and potential additional acquisitions and development opportunities in the Company’s Permian Basin and D-J Basin assets.
Dr. Simon Kukes, the CEO of the Company, commented, “Upon closing the planned acquisition announced today, we will hold over 45,000 leasehold acres in the Permian Basin, which, together with our existing 12,000 acres in the D-J Basin of Colorado, will transform our company into one of the most significant players engaged in horizontal drilling in the San Andres play and D-J Basin. We look forward to closing this acquisition, announcing the results of our initial horizontal wells in the coming months, and continuing to aggressively build the Company.”
Source: Company Press Release
