NEW ORLEANS, Jan. 17, 2012 /PRNewswire/ -- Treaty Energy
Corporation (OTCQB: TECO) (www.treatyenergy.com), a growth-oriented
international energy company, today reported progress on its
projects to increase oil production on its Texas leases.
Treaty Energy's Co-CEO Bruce Gwyn
and CIO Lee Schlesinger recently returned from Texas where they were evaluating the Company's
operations there.
Mr. Gwyn stated, "Our goals were many: (1) view and analyze the
fifteen Treaty oil leases in Texas; (2) Evaluate current production and
revenue stream that all the leases are currently generating; (3)
meet with Treaty Energy President, Stephen
L. York, and review the time line for continuing lease
work-overs; (4) schedule and co-ordinate the drilling projects that
are coming on line; and (5) fully document the drilling equipment
acquired by the Company's subsidiary, Treaty Energy Drilling, Ltd,
over the last several months and to determine the market value of
each piece of drilling equipment that was purchased." After
completion of their stated goals Mr. Gwyn added, "We are pleased to
say that the findings from the evaluation are very
encouraging."
After struggling through one of the hottest summers in
Texas history, the leases are now
starting to respond to work-over and stimulation treatments and
yielding results. Because of the summer conditions production
schedules were pushed back by a few months. As of now over
half of the leases are producing 25-40% more than the previous 12
months average.
Mr. Gwyn stated, "The Texas
leases have now realized sufficient revenue stream from production
that all leases are continually being reworked and upgraded without
the need of second party financing, which will allow production to
steadily grow on a self-contained basis. We have reached this
current level of production after many months of well reworking
orchestrated by Mr. York. This has allowed Treaty Energy to
sell over 1000 Barrels of oil within the previous 30 days."
In addition, Mr. York commented, "Treaty remains on track to
achieve our previously stated goal of 1000 BOPD by end of June
2012. Current production from existing wells has stabilized
and with continuing work-overs we expect production to shortly
increase to 1500-2000 barrels per month."
The Shotwell Leases will be coming online in the next 7-10 days.
The wells have been re-worked with tubing, pressure tested,
and down-hole pumps rebuilt. The increased fluid volume has
resulted in the injection station not being able to inject the
daily water volume back into the formations. The injection
pump is currently being rebuilt and will be re-installed to bring
the lease back online. The increase across the board has
resulted in an increase in the water volume as well as the oil
volume. The water handling capabilities on these old leases
are not sufficient to keep pace with the oil production volume.
Once all the water handling capabilities are increased to not
only handle current production, but future production as well, then
production will increase and drilling projects can be initiated on
these leases.
Steve York and his crew recently
completed their first Gel Frack, a process of well stimulation
where highly pressurized "fracking fluid" is injected through the
well bore into the reservoir, on the Mac #4 well on the new
Mack Wooldridge lease. This
process stimulates the zone and increases production. At
present time the production on the Mac #4 well has tripled from
previous numbers. Mr. York anticipates that production on
this well should continue to increase over the next week or so when
a final reading of the increased production will be determined.
If the results are sufficient Mr. York plans to duplicate
this process on the other wells on this lease.
The Mack and Eula Wooldridge leases will also be where Treaty
Energy's first well drilling project will occur, for which funding
is already in place. The two leases hold a combined 280
acres. There are numerous virgin drill sites available for
Treaty to explore on these leases.
Treaty plans to drill a series of 12 new wells through a process
of "Infield Drilling". This is a process of drilling new
wells in a field of proven production on the perimeter of the
field. This process dramatically increases the percentage of
successful new wells. The geologist is scheduled to mark the
planned new drilling sites on Wednesday,
January 18th. The Texas RRC mandated survey depicting
the exact locations defined by GPS, fence lines, etc., will follow
immediately, thus allowing the Company to finalize the drilling
permits with the Texas RRC to obtain approval for the drill sites
and permission to drill.
Treaty has summarize two past well logs, showing the pay-zone
being produced and the Initial Production (IP) of two of the older
11 wells located on the Wooldridge leases. As shown in the
logs, these wells were drilled in 1985. The initial
production of the Mac #6 well was 31 BOPD and the Mac #3 well was
30 BOPD. There was 17ft of pay zone for the Mac #6 and 13ft
for the Mac #3 wells. Treaty will be drilling in between
these older wells and would anticipate the same
success.
You will find the "Woodridge Lease Well Logs" on the "Projects"
page of Treaty's website:
http://www.treatyenergy.com/flashsite/index-3
In the past Treaty has estimated its reserves to be around
900,000 barrels of recoverable oil on its leases, prior to the
addition of the Wooldridge leases. Treaty has researched the
Wooldridge lease and the data on the proposed 12 new wells would
indicate that each well could contain as much as 35,000 barrels of
oil in place. That would add an additional 400,000 barrels of
oil to the "estimated reserves". The estimated reserves are
based on a 25% recovery rate and only taking into consideration the
shallow 500-600 ft pay-zone.
This new 12 well drilling program is expected to yield an
additional 200-300 BOPD in oil production. Once drilling has
started the process should take 6-8 weeks to complete. Based
on other well data in this field these wells should have similar
characteristics to the earlier wells. Treaty believes that it
has the availability to drill up to 48 additional shallow wells on
its various leases in Texas.
Treaty has several pay zones at various depths on its
leases. We are currently planning to drill 9 new wells at a
proposed depth of 2,600 Ft. As with the earlier 12 wells we
will be Infield Drilling to minimize risk. Similar wells in
the area have produced initial flow rates of between 30 - 100 BOPD.
Treaty believes it has a substantial portion of the project
financing committed at this time and will be able to finalize the
structure over the next 30-45 days.
The equipment that Treaty Energy Drilling, Ltd has purchased
over the past several months has added great value to its drilling
assets. Treaty Energy Drilling has been able to add needed
and important pieces of equipment that make it a more efficient
company with minimal reliance on outside vendors. Most of
this equipment had been purchased at auctions which resulted in
reduced costs and allowed for the procurement of additional
equipment which otherwise might not have been currently
obtainable.
About Treaty Energy Corporation
Treaty, an international energy company, is engaged in the
acquisition, development and production of oil and natural
gas. Treaty acquires and develops oil and gas leases which
have "proven but undeveloped reserves" at the time of
acquisition. These properties are not strategic to large
exploration-oriented oil and gas companies. This strategy
allows Treaty to develop and produce oil and natural gas with
tremendously decreased risk, cost and time involved in traditional
exploration.
Forward-Looking Statements:
Statements herein express management's beliefs and
expectations regarding future performance and are forward-looking
and involve risks and uncertainties, including, but not limited to,
raising working capital and securing other financing; responding to
competition and rapidly changing technology; and other risks.
These risks are detailed in the Company's filings with the
Securities and Exchange Commission, including Forms 10-KSB, 10-QSB
and 8-K. Actual results may differ materially from such
forward-looking statements.
Contact:
Osprey Partners
Tel: 732-292-0982
Fax: 732-528-9065
osprey57@optonline.net
SOURCE Treaty Energy Corporation