Tengasco, Inc. Announces Completion of 8-Well Drilling Program and First Quarter Kansas Operations Update
April 24 2006 - 8:51AM
Business Wire
Tengasco, Inc. (AMEX:TGC) today announced the completion of the
Company's 8-well drilling program on its oil producing properties
in Kansas by the drilling of the final two program wells. The
8-well drilling program proved to be highly successful, with 7 of 8
wells producing or expected to produce commercial quantities of
oil. The Company also announced that three of the wells in the
Company's 12-well drilling program in Kansas have also been drilled
to date, and the fourth program well, the Foster #10, is currently
being drilled. The last of the wells drilled in the 8-well program,
the Crofoot A-9 was finished in April 2006. CEO Jeffrey R. Bailey
said, "This well had an outstanding test, and we expect this to be
the best producer of the 8 program wells drilled. While the test
volumes for this well exceeded 450 barrels of oil per day (BOPD),
we anticipate that the initial and near- term actual production
rates will most likely be maintained in the range of 100 BOPD in
order to maintain the functionality of the well and to promote
maximum long-term recoverability of reserves. The structure of the
drilling program calls for the participants to receive all revenues
from their program interest until payout of their investment, when
the Company will begin to receive a management fee of 85% of
revenues from the participant's program interest. The Company will
continue to receive this management fee for the remaining life of
the wells. As a result of the expected overall production levels of
all the program wells, the Company anticipates that the payout to
the participants will occur and that the Company will commence
receiving these management fee revenues for all of these eight
program wells sometime in the third quarter of 2006." The Company
also announced that quarterly oil production volumes in Kansas
achieved another record level with 38,502 barrels of oil produced
in the first quarter of 2006. This is the highest first quarter
Kansas oil production level since 1997, the year Tengasco purchased
the Kansas oil properties. Mr. Bailey said, "In our historically
lowest quarter for production, it is a testament to the value of
our Kansas properties and our Kansas based employees, that we were
able to achieve these excellent results in the first quarter of
2006." The Company announced that it expects to file with the
Securities and Exchange Commission, its Report on Form 10-Q for the
Quarter Ended March 31, 2006 in early May, 2006. Forward-looking
statements made in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. Investors are cautioned that all forward-looking
statements involve risk and uncertainties which may cause actual
results to differ from anticipated results, including risks
associated with the timing and development of the Company's
reserves and projects as well as risks of downturns in economic
conditions generally, and other risks detailed from time to time in
the Company's filings with the Securities and Exchange Commission.
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