NEW ORLEANS, July 9, 2012 /PRNewswire/ -- Treaty Energy
Corporation (OTCQB: TECO) (www.treatyenergy.com), a growth-oriented
international energy company, today announced the acquisition of
four new Oil & Gas Leases in Eastern
Texas, and its plan to re-enter and re-complete the MADELEY
F1H well in Shelby County,
Texas.
Today Treaty Energy Chairman, Andrew V.
Reid, is pleased to announce that a major multi-stage
acquisition has been signed by Treaty Energy. Mr. Reid
believes that this acquisition, upon completion of the multiple
stages, will position the company for tremendous growth and allow
Treaty to move to a whole new level in the oil industry. (An
8-K will be filed on this acquisition.)
This acquisition involves three parties: Jimmy Jones, seller of the CHUMLEY LEASE; 3K Oil
Trust, seller of the ISAIAH HILL, MADELEY, and ELLORA LEASES; and
Treaty Energy, the purchaser. Total acreage of the four
Leases is 580 Acres.
Treaty Energy will start to re-enter the MADELEY F1H
(API#42-419-31028) well on Monday, July 9th. This well is
drilled vertically to the Fredericksburg Zone and initially had a
16ft lateral extension drilled. The driller on this well was
permitted by the RRC to go much farther laterally, but due to
unexpected increases in well pressure for which they were
unprepared lateral drilling was stopped far short of the potential
that this well held.
Production of this well was 161 BBLS of oil per day at that
point. Treaty Energy is permitted by the RRC to laterally
drill this well to 1770 ft, but will not necessarily drill that
entire length. Treaty currently is planning to drill to 1000
ft, but may drill farther if deemed prudent to do so. The
well planners and geologists involved with this well estimate
production to be up to 400 BOPD. Re-completion is estimated
to take one week. Update will be provided to shareholders
upon re-completion.
There will be at least two more wells drilled to the
Fredricksburg Zone with similar laterals on the 3K Leases with
estimated production by the well planners of up to 500 BOPD each
based on well logs of similar wells close to the areas to be
drilled.
The CHUMLEY LEASE contains one well that is producing at a
current rate of about 45 BOPD. This well was originally
drilled to 3380 ft at which time the well blew out causing complete
destruction of the drilling rig. The well was brought under
control by pumping cement down the hole up to the 1900 ft Saratoga
Zone. At that point the well started flowing and production
equipment was set in place to produce the well.
During the drilling and logging of the well four Pay Zones were
found: the Saratoga Zone at 1900 ft; the Annona Zone at 2185 ft;
the Tokio//Blossom Zone at 2500
ft; and the Fredricksburg Zone at 3380 ft.
The plan for the CHUMLEY LEASE, as per the Purchase Contract, is
to drill and produce each Zone separately. Initially, Treaty
will build four Two-Acre Pads on which four wells will be drilled.
Each of the four wells per Pad will be drilled to one of the
four Pay Zones previously mentioned. Each of the Two-Acre
Pads is estimated to have initial production of up to 1500 BOPD or
up to 6000 BOPD for the group of four Pads. The cost of
drilling these wells is estimated at $165,000 for each of the Saratoga Zone wells,
$190,000 for each of the Annona Zone
wells, $215,000 for each of the
Tokio/Blossom Zone wells, and
$240,000 for each of the
Fredricksburg Zone wells.
Treaty will pay for these wells from a combination of revenues
from oil sales and investments by some of the substantial new
investors that have taken equity positions in the Company during
the last six months. At least one of these groups will be
offered, and will likely accept, a seat on the Company's Board of
Directors in the near future. This will be a great moment for
the long holding supporters of the Company. Once the sites
for the Two-Acre Pads are selected and permitted Treaty expects to
complete the drilling program in 18 to 20 weeks.
The purchase price of these four new Leases is $7,375,000, and is structured follows:
$175,000 for the re-entry and
re-completion of the MADELEY F1H Well that will start on
July 9, 2012; $1,200,000 that will be paid within 75 days; and
the balance of $6,000,000 to be paid
in shares of Convertible Preferred Stock that will convert at
several different share price levels as the levels are achieved and
maintained for a required time as per the contract.
Mr. Reid stated, "I am overjoyed at the progress that is
occurring at Treaty Energy. There have been many programs
implemented in Texas and
Belize and all are coming to
fruition at the same time. To remind our shareholders, we
have drilling programs in West Central
Texas for 12 shallow wells (500 – 600 ft); we are moving
forward to drill 9 wells (2300 – 3000 ft); and we are currently
drilling a well to (1700 – 1900 ft) on the MC COMAS A LEASE."
Mr. Reid added, "We have drilled our first well in Belize, the San
Juan #2 well, which is showing promising results. We
are already in preparation of the site to start drilling our second
well in Belize and are seeking to
permit an additional six wells to properly outline and define our
oil play in the Stann Creek District of Belize. In addition,
we will soon outline our plans for the 1.4 Million Acre Paradise
Concession."
Mr. Reid concluded, "I am grateful to all Treaty Energy
shareholders and stakeholders for their abundant support over the
last couple years. I believe that we are all soon to benefit
from all our efforts and be richly rewarded for our success."
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