Texas Oil and Minerals Inc. (OTC: TOMI) has acquired 25% working interest and 18.75% net revenue interest in leases in Live Oak County, Texas, from Tejones Operating Corp. for $1 million in cash and stock, the company announced on Oct. 8.
The leases are located on a 950 acre site known as the Sullivan Tract located in the east and northeast sections of the Maxine fields in Live Oak County. The field has 23 wells that have produced hydrocarbons out of 16 Wilcox Sands. Tejones has operated the Sullivan Unit for over 14 years. The latest geological report strongly support from the available data the existence of two down-to-the-coast faults transecting the Sullivan Tract northeast to southwest along the structural high.
The company will be testing in all the previously productive Wilcox Sands. The historical production of hydrocarbons as provided by the Texas Railroad Commission for the 16 Wilcox Sands for the Sullivan Tract was some 2.2 million barrels of oil and 77.1 billion cubic feet of natural gas. The geological report estimates that the company should be able to recover half of the previous production in the proposed new well sites. It is estimated that it will take a minimum of four wells to drain the faults of hydrocarbons once commercial production is found.
The company is currently in the process of completing the necessary financial and non-financial reporting requirements for OTC Markets to bring the filing status to current and have begun pursuing sources of financing for this project as well as renewing negotiations for a working interest and net revenue interest in a well located on the Dewitt property.
"With this first acquisition in the Sullivan Tract, TOMI has poised itself to come out of the blocks with a cash flow positive working and net revenue interest within a 950 acre site that has not been fully evaluated by the drill bit. This gives the company not only proven producing wells but the upside potential of commercial production in the Wilcox formation," Tom Gouger, TOMI president, said in the release.
Texas Oil and Minerals Inc. engages in the exploration, development, and production of natural gas, NGLs, and crude oil in Texas. The company is based in San Antonio.