Avalon Oil & Gas, Inc. (AOGN.OB) Has Numerous Oil & Gas Properties – Part 3

 @ibtimes on June 02 2009 7:45 AM

Avalon Oil & Gas Inc. is an independent domestic oil and natural gas producer. The company’s strategy is to use efficient reservoir maintenance and innovative technology to generate stable cash flows and production from a portfolio of oil and gas lease properties in Texas, Oklahoma, Louisiana and Arkansas.

Here is a brief overview of the rest of Avalon Oil & Gas properties:

Avalon has a 10% working interest in the New Diana Field, which is located in Upshur County, Texas. The property consists of thirteen wellbores, which include six producing oil wells, three salt water disposal wells and four shut-in or marginally producing wells. The working interest was purchased from an Oklahoma independent oil producer who continues to be a partner in the property.

These wells were originally drilled in the 1960s by various operators. This property produces significant volume of salt water and as a result has a self-contained salt water disposal system. This results in a very low unit cost of salt water disposal, which is important for the company. These mature wells have stable production and produce 25 barrels of oil per day.

Avalon also owns an undivided 15% working interest in the Janssen #1A property, which is located in Karnes County, Texas. This well has been flowing at an average rate of 330 thousand cubic feet of gas per day and producing 10 to 20 barrels of high grade condensate. At present, the well is flowing into the sales line without the need of a gas compressor.

Total reserves for the well are estimated to be 75,000 to 100,000 barrels of condensate and 3 to 4 billion cubic feet of gas. The company has a gas sales contract for the well that fluctuates with the Houston Ship Channel price index and the liquid condensate will be sold at the monthly spot price for product in the regional Texas area. Avalon received their initial revenue distribution for the products sold from the well in July 2008 and this well is expected to produce revenues for many years to come.

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