Exterra Energy, Inc., Aquires 3,100 Acres in the North West Corner of the Barnett Shale
Exterra Energy, Inc. (OTCBB: EENI) announced today that the company has acquired 3,100 acres of mineral leases in the North West corner of the Barnett Shale in the dual oil/gas window of Texas. There are currently 52 wells on the property, of which 44 are producing an average of 35 BOPD. The non-producing eight wells are scheduled to be worked over and put back online immediately. Post work over they are projected to produce 5 BOPD each. This will bring the total daily production to 72 BOPD. The estimated 72 BOPD would calculate to approximately $114,600.00 monthly cash flow post operations and $1,375,200.00 annually.
Additional plans are to develop 10 new oil wells at an estimated cost of $75,000.00 per well, totaling $750,000.00. These 10 new wells are projected, by a third party independent engineer, to produce an estimated 20 BOPD each initially, and decline an estimated 25% the first year. The additional initial production would calculate to an estimated 200 BOPD for the 10 new Oil Wells Developed. Monthly additional cash flow is calculated at an estimated $355,000.00 monthly and $4,260,000.00 annually. Conservative cost to create this additional annual cash flow is $750,000.00. As previously announced, Exterra has a $10,000,000 LOC with Happy State Bank, TX, which can be used for the purchase of producing oil and gas properties. It is management's intention to begin to use this line in order to bring this work over and drilling project to a producing state.
This 10 well program, after being successful, will be followed by another 80 well drilling program. These drilling locations were confirmed by an independent third party engineer familiar with the field. After successfully unlocking all of the minerals in this shallow region it is Exterra's intent to go after the deeper zones which would include the dual completion Barnett Shale proven successfully in the area by EOG.
This acquisition is very exciting for Exterra and it adds to our planned acquisition of the Woodbine properties previously announced and expected to close soon. We like both of these areas and think they both hold very low risk as they combine current production, work over opportunities and new drilling deepening opportunities with extremely productive proven reservoirs.
Todd R. Royal, CEO, commented, "The acquisition of this new property located in the Barnett Oil/Gas window lends to our business plan of acquiring strong producing assets with solid upside potential that are located in proven, tested reservoirs and continue to increase shareholder value."