Victory Energy Corporation, through its partnership with Aurora Energy Partners, has acquired a 1.5% working interest in a 3,186 acre position in the Wolfberry resource trend located in Howard County, Texas for total up-front consideration of $90,298. The acquisition includes three wells of which two are on production. A third well has been drilled, fracture stimulated and is in final completion stages. The company has named this project "ClearWater".
Kenny Hill, Victory Energy's COO, stated, "The ClearWater project2 represents our first investment in a resource play, and it fits in nicely with our strategy of geologic diversification while also offering the company a multi-well drilling plan. These 10,000-11,000 foot Wolfberry wells are renowned for their consistent oil and gas production and their more than twenty five year life spans. The operator is a2 well known Permian Basin company with extensive experience."
The three wells drilled to date are the Sage No. 1, the Hamlin 26 No. 1 and the Hamlin 26 No. 2. The Sage No. 1 and The Hamlin 26 No. 2 have been completed and are producing approximately 150 BO and 800 MCF per day combined. The Hamlin 26 No. 1 has been drilled, fracture stimulated and is in final completion stages. A salt water disposal well has also been drilled on the acreage.
The operator, Clear Water, Inc., expects to drill seven additional wells and anticipates approximately one completion per quarter, depending on frac crew availability. Drilling and completion costs to the Company's 1.5% WI were between $23,000 and $28,000 for the first three wells, which management believes is a good estimate for the cost of future wells. Total estimated reserves per well are approximately 150,000 BO and 0.5 BCF of natural gas.
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