Treaty Energy Corp. (OTC: TECO) announced May 22 that it signed an agreement for a four well farm-out drilling program with Houston-based Aquinas Energy Resources Inc. on the Belle Wisdom lease in Brazoria County, Texas.
New Orleans' Treaty will receive 80% of the net revenue from production, until initial investment payout, and then 70% of net revenues after payout of all costs, the company said.
Texas Sands Resources LLC will be the project’s operator, the company said. It will also apply for the first drilling permit, which will be based on a location that the company will choose with technical guidance from Aquinas' geologist, Treaty added. Prior to drilling, Aquinas will provide Treaty and Texas Sands Resources with seismic data, Treaty said.This initial agreement covers four well locations on the Belle Wisdom lease, which is just outside of Damon, Texas. The lease sits in the Damon Salt Dome area, the company said.
The four wells should be drilled into the Marge and Frio Attic pay zones and their depths will range from 4,000 feet to 5,000 feet, the company said. Based on historic well production data, anticipated IP rates for the wells are about 100 barrels per day (bbl/d) of oil per well, the company said. According to geological data, there are more than 440,000 bbl of recoverable reserves on the lease, the company added.
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